Boundaries & Interface 

Many public owners are exploring adding Express Lanes to existing corridors. Typically, the design-build scope includes:

1. Installation of tolling infrastructure.
2. Widening or adding pavement and structures to the inside/outside or above.
3. Shifting lanes.
4. Reconfiguring barrier walls.
5. Upgrading sign gantries.
6. Installing flexible plastic delineators to separate the Express Lanes from the general-purpose (“GP”) lanes.

In these circumstances, the final project is usually a mix of new and existing assets. For the operating period, the public owner must consider whether the developer’s O&M limits should include fence-to-fence (including GP lanes) or only the Express Lanes. Based on the market, some Developers are willing to take on both additional inventory and the risk of a fence-to-fence approach. The following advantages and disadvantages should be considered when defining the optimal limits.

1. Fence to Fence:
   1. By including the GP lanes, the cost per lane mile often decreases. Developers have an appetite for more extensive inventories and can provide certain economies of scale when managing a more extensive inventory. The public owner can incentivize the developer to take on more risk by providing relief in the contract, such as reduced performance specifications and reduced residual life requirements at Handback for existing assets.
   2. When a corridor is split longitudinally, it requires duplication of resources from the developer and the public owner. For example, a 20-mile corridor would need duplicate resources for operational activities such as litter removal, incident and emergency management, patrols, surveillance, inspections, etc. These items usually scale easily for the developer. By including GP lanes, there could be an overall cost reduction of operations.

• By handing over an entire corridor, the asset can potentially be removed from the public owner’s general maintenance budget, clearing up resources and personnel for other programs in the state.

1. Developers build flexibility into their long-term plans, allowing for the assumption of certain risks that may not be feasible under a traditional DBB. The developer often addresses early interventions or other unplanned maintenance due to the long-term view and approach. They may also tap into financial resources related to project revenue to better manage the corridor as a whole.
2. Express Lanes only:
   1. An incident along the delineator poles, whether in the Express Lanes or GP lanes, would likely require a response from both the developer and the public owner. Over 50 years, this can add significant costs for the public owner.
   2. P3 requirements have become more prescriptive than statewide O&M requirements and even performance-based maintenance contracts in other states. By splitting the corridor, the public users may observe a higher level of service in the Express Lanes, which could have a negative perception for the public owner.

• In certain configurations, in order to add Express Lanes, the GP lanes are widened to the outside, and the Express Lanes become a mix of existing and new assets. This complicates the rehab program for the developer and adds certain interface risks for shared structures maintained by both the developer and the public owner.
• Inconsistent maintenance schedules between developer assets and public owner assets could lead to additional closures, traffic, and reduced levels of service for the public, which in turn may also affect revenue.

Social Projects and Vertical Infrastructure

When considering P3s for buildings and vertical infrastructure, it is important for Owners and their advisors to (a) delineate boundaries around the facility; (b) to set a clear interface between the Owner’s and the Project Company’s responsibilities in the provision of O&M Services; and (c) to address any potential or perceived overlap between the services to be provided by the Owner and the Project Company. Defining boundaries and interfaces, and addressing potential overlaps in the O&M Services during the early stages of the process helps Owners with:

• Risk Allocation and Management: Clearly defined boundaries around the facility help in allocating responsibilities and corresponding risks appropriately to the party that is best positioned to manage that risk;
• Accountability and Transparency: Establishing boundaries ensures that responsibilities and expectations are clearly outlined by commercial and financial close, allowing the Project Company to develop a clear work plan;
• Efficiency and Performance: With well-defined boundaries around the facility, the Project Company can leverage their expertise to implement efficiencies during the execution of O&M services;
• Conflict Resolution: Defining boundaries around the facility provides clarity on where the Owner’s responsibilities end and the Project Company’s begin, which helps mitigate potential conflicts and disputes by ensuring both parties have a clear understanding of the division of responsibilities.

Physical Boundaries

Many buildings delivered under a P3 structure are situated on well-defined, stand-alone parcels with clear boundaries, such as property lines or adjacent streets and sidewalks. However, in some cases, the facility may be located within a campus setting where such boundaries are not as clearly defined. This is often the case for campuses that house multiple facilities, such as colleges and universities, healthcare facilities, military bases, and county or municipal campuses. In these situations, it is crucial to delineate and define the project’s limits before executing the project agreement.

Since the O&M Services are the longest phase of these contracts, the boundaries around the facility should be based on easily identifiable geographical features, such as parking lots, pedestrian walkways, internal circulation streets, or fences. In some cases, it might be as simple as establishing a perimeter of a specified width around the facility. These boundaries should be documented and included in the project agreement with a formal survey.

Operational Interfaces

Another key consideration of the provision of O&M Services under a P3 structure is the interface between the Owner’s staff, the users of the facility, and the Project Company’s staff. While the ultimate goal of P3s is to transfer the operational and maintenance risk from the public to the private sector, there are instances in which Owner’s may elect to retain certain operational responsibilities such as, for example, security (in the case of secure buildings), information technology services, or custodial. In such cases, it is important for Owners and their advisors to develop a list of “Excluded Services,” or services which the Owner will retain during the O&M Period.

The list of Excluded Services should clearly define the responsibilities and/or services to be retained by the Owner and clearly address the interface and boundaries between the Project Company’s and the Owner’s activities. In many instances, this could be in the form of a “responsibility matrix.”

Scheduling of O&M Services

The goal of the Project Company in the provision of O&M Services under a P3 structure is to be able to maintain the facility and provide the O&M Services in a discrete manner without causing any impacts to the normal operations to be conducted within the premises. To that end, O&M Services are often classified into three (3) distinct types:

• Scheduled Services: Scheduled services consist operational, maintenance, or rehabilitation activities that have been planned outside of normal operating hours or during times of reduced activity. Scheduled services are submitted by the Project Company to Owners through an “O&M Workplan” for review and acceptance and to ensure that there are no conflicts with regular or special activities scheduled by the Owner. Examples of scheduled services may include custodial activities and regular maintenance activities of building systems (HVAC, plumbing, lighting, elevators, etc.),
• Unscheduled Services: Unscheduled services result from failures in building elements or systems that if not addressed either immediately or in a timely manner, may impact the normal operations of the facility or may cause accessibility issues such as stalled elevators, water leaks, heat or HVAC issues during times of extreme outdoor temperatures, etc.
• Demand Services: Demand services are operational or maintenance activities triggered by a user request through the Project Company’s helpdesk. Similar to unscheduled services, demand services are not originally included in the O&M Workplan, and may generally include housekeeping and/or cleaning requests or information technology support.