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New P3 Law to Jump-Start Road Construction Projects in PA

July 11, 2012

Pennsylvania Governor Tom Corbett is expected to sign legislation adopting "public-private partnerships," commonly known as P3s, for transportation projects. On Saturday, June 30, 2012, state lawmakers approved a bill that allows public entities to enter into transportation development agreements with private firms to propose, design, finance and build road projects. When the law goes into effect, it will allow consideration of the "best value" approach to contract awarding - taking into account such factors as speed of delivery, cost, financial commitment, technical, scientific, technological or socioeconomic merit, financial strength and viability. A seven member state panel would approve projects. The legislature would then have twenty days to overrule the panel. Until now, Pennsylvania has awarded transportation contracts on the long standing requirement of competitive sealed bidding with a mandatory award to the lowest responsible bidder, pursuant to Pennsylvania Procurement Code, 62 Pa. C.S. §§ 511, 512(g).

The new law is expected to jump-start projects that have long been shelved due to budgetary constraints and to create new jobs in the construction and engineering industries. Examples of projects contemplated by advocates of the P3 legislation include creating express toll lanes for drivers to avoid traffic congested lanes and the creation of more high occupancy vehicle lanes.

Those lawmakers who voted against Pennsylvania's adoption of P3s felt that awarding contracts to non-Pennsylvania private companies without local ties would shortchange Pennsylvania residents and workers. A proposed amendment, which would have required companies to give preference to Pennsylvania workers and Pennsylvania manufactured steel, failed in the state House of Representatives. When Governor Corbett signs the law, Pennsylvania will become the 33rd state to allow public-private partnerships.