Volume 9, Issue 17 - April 26, 2017
Mary Scott Nabers, President/CEO, Strategic Partnerships, Inc.
Most companies, upon deciding to pursue opportunities with a specific governmental entity, develop a "Go-To-Market" strategy. One of the more interesting new strategies that allows companies to capture the attention of public officials today is to participate in a pilot or demonstration project. This is becoming extremely common...and it now appears to be a major trend. 

State officials in Iowa recently announced 12 pilot projects that will focus on conservation measures related to storm water. These demonstration projects will test methods of capturing and absorbing storm water into the ground. The projects will test bioretention cells, bioswales, native landscaping, permeable pavement, rain gardens, sedimentation basins, soil quality restoration and creation of wetlands. After evaluations are made, a more comprehensive plan for storm water will be developed. 

The city of Atlanta, Ga., is preparing for an autonomous vehicle demonstration project. A request for information (RFI) has been issued to solicit strategies that allow for the testing and deployment of autonomous vehicle systems in a future procurement.

In This Issue
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In 2016, about 4.08 trillion kilowatthours of electricity were generated at utility-scale facilities in the United States, according to the U.S. Energy Information Administration. About 65 percent of this electricity generation was from fossil fuels - coal, natural gas, petroleum, and other gases. About 20 percent was from nuclear energy and 15 percent was from renewable energy resources.

Renewable energy remains a small portion of our energy consumption, but these natural resources are still blowing strong, shining brightly and making waves in several states that have the ability to put these free resources to good use. Well-known renewable energy sources include: hydroelectric, biomass, ocean, hydrogen, geothermal, wind and solar. According to the U.S. Department of Energy, America is home to one of the largest and fastest growing wind markets in the world. According to the American Wind Energy Association, Texas is the undisputed leader in wind energy. It has approximately three times more wind generating capacity than any other state and hosts nearly a quarter of American wind jobs. At the end of 2015, there were 75,000 wind turbines across the 50 states, District of Columbia, Puerto Rico and the U.S. Virgin Islands. That's enough capacity to power more than 142,000 American homes. American wind power is on track to double our output over the next five years and supply 10 percent of U.S. electricity by 2020.

Upcoming contracting opportunities

Florida- Port Saint John's $205 million West Side Modernization Project officially started last week with engineering studies at the port that included environmental drilling. Some of the work being done for the project includes: deepening the main channel and berths alongside the port's container terminal, lengthening and strengthening the pier structure and constructing new Intermodal yard and improved truck access to the port. 

The project is receiving funding from both the federal and provincial government and the contract for design and engineering services was recently awarded to a local firm with experience working on marine infrastructure projects throughout major Canadian and American ports. The Port is planning to release the request for proposals (RFP) for the construction phase of the project this fall and will decide on a firm later this year or early 2018. It is expected that construction will take about three to four years. Once construction is complete, dredging of the main channel will begin. The improvements to the port, once completed in 2024, are estimated to bring about a $152 million uptick to New Brunswick's gross domestic product, $35.4 million in additional tax revenue, $109.6 million increase in labor income and a $84 million boost in consumer spending.
New Mexico- A company that offers detention services has unexpectedly decided to end operations with the Lincoln County Detention Center. The action has forced Lincoln County commissioners to seek interim management for the detention center until a formal request for proposals (RFP) can be issued and awarded. The county attorney expressed concern that since the jail only accommodates 161 beds, it is not ensured that the county will receive many proposals for interim management. 

During the interim period, the county will assume responsibilities for salary and benefits under the proper legal mechanism and the county will hold their current detention services provider in default of its agreement with the county. If the contract is not reassigned, there would be a gap between the current company's last day and the first day a new contract can be awarded through the RFP process. A request for proposals was developed and was to be published this week. Responses to the RFP would allow the evaluation committee to decide on a provider to present at the May 16 commission meeting and decide on an award that day. June 2 would be the date the successful proposer would begin operations.
Illinois- The Metra Board of Directors authorized request for proposals (RFP) for the design and production of new railcars and locomotives to replace its aging fleet. The RFP will provide for at least 25 new railcars, plus as many more additional railcars above that amount as possible. This exact number will depend on the responses to the RFP, the amount of funding available and whether Metra can use funding alternatives to help increase money available for the project. The RFP, which will be published during the third quarter of 2017, will provide for a base order of 10 locomotives plus as many more as possible. 

Metra currently has approximately $200 million programmed for rolling stock purchases over the next five years, although some of that money could be needed for Positive Train Control or other capital needs. Metra's 2014 modernization plan called for the purchase of 367 railcars and 52 locomotives. That plan, however, counted on Metra receiving $1.3 billion in funding, primarily from a new state bond program. Anticipated funding did not come through and Metra is depending on maximizing the funding alternatives through methods such as leasing. 

Metra estimates that the contract for new railcars will be rewarded in the first quarter of 2018. Delivery of the first cars will be part of the negotiations and dependent upon the manufacturer's capacity to build. The last time Metra received new railcars for lines other than the Metra Electric was in 2006. Metra expects to award the contract for new locomotives later in 2018, with delivery of the first locomotive in 2020.
Arizona- The City of Chandler is issuing a request for qualifications (RFQ) from development firms interested in purchasing and developing 53.6 acres of city-owned property. The city is seeking to generate both immediate revenue and long-term economic benefit through the sale and development of the property. Following this RFQ process, the city will issue a request for proposals (RFP) that will seek detailed information about the proposed development project, development team members, timeline, impacts and benefits as well as proposed purchase price. Sale of the property will ultimately be contingent upon city council approval of the proposal and a purchase agreement. 

 The city's expectation is that the site will be developed primarily as a business park for corporate offices of major employers and knowledge-based industries. The City envisions a minimum of 2-3 story office buildings along Loop 202 to maximize use of the property with the greatest potential for high-value employment. Manufacturing and research uses are also desirable on the northern portion of the property while conditional limited warehouse, distribution and support retail may be considered. No residential uses of any type will be considered on the site. The city would like to see construction start on at least one building on the property within one year of close of sale.
Massachusetts- The Department of Information and Innovation of Boston recently released a request for proposals (RFP) offering a 20-year contract for a broadband provider to connect 100 city buildings, 73 public schools and 24 family housing units to a fiber network. The network will also be used to help public safety communications for first responders. Responses to the RFP for the $10 million project are due June 6. The project is part of the city's long-term plans to develop the Boston Fiber Network and its Imagine Boston 2030 citywide plan for growth. This project is an effort to provide digital access for low-income residents, encourage equitable economic growth and prepare the city for the next generation of smart city services.

The procurement strategy for this project is unique in that networks in different areas of the city could be built by different companies. The city will issue awards to the network in chunks through something called an indefeasible right to use. The reason for this is that awarding contracts to multiple companies for different areas could spur competition and result in the best possible service for consumers. There is not an exact timeline of when the network will be deployed, but it is expected that some of the new broadband network can be utilized within the next year and full deployment may be a possibility in about two or three years.
Mississippi- Mississippi recently received approval from the Gulf Coast Ecosystem Restoration Council for nearly $50 million to be used to restore areas affected by the 2010 oil spill in the Gulf of Mexico. The state plans to allocate $45 million to improve the quality of water along the Gulf Coast, $3.5 million to enhance oyster reefs near Pascagoula and $1.3 million for restoration planning. 

The money was sourced from a part of the Clean Water Act penalties paid by those who were responsible for the Deepwater Horizon spill. The spill was caused by millions of barrels of oil spilling into the gulf after the offshore rig caught fire and exploded. British Petroleum, which was found primarily responsible for the spill, has paid billions in cleanup costs, settlements and penalties.
News about public-private partnerships (P3s)

Florida- The number of passengers at Fort Lauderdale-Hollywood International Airport increased 23.4 percent in the past five years and this number is expected to grow. The airport has very little outside space for expansion, so improvements would need to be around the facility. The airport will need additional airplane gates, a way to connect its four terminals, decreased congestion in the terminal and to provide a larger cell-phone parking lot for people waiting for planes to arrive. 

Another addition would be to demolish the four-level Palm Garage and replace it with a nine-level structure that includes a hotel. One thing the airport hasn't had is convenient lodging for travelers. Planners haven't figured out the details of a hotel, but it will probably be built through some type of public-private partnership. The cost of improvements won't be paid for by taxpayers, but will come from grants and airport revenues - such as ticketing, landing and car rental fees.
Wisconsin- Wisconsin Rep. David Steffen is interested in a privately built, state-run prison to replace the aging and overcrowded Green Bay Correctional Institution (GBCI). This new prison would improve safety for staff and inmates at the maximum-security prison, provide tax revenue for the host community and put Allouez land back on the tax roll. Because it would be privately-owned, the prison would pay property taxes, saving taxpayers about $150 million over a decade. Wisconsin's other prisons are not taxable because they are government-owned. 

Steffen said a new prison would ultimately need considerably fewer employees than GBCI because it would be more efficiently designed. The proposal calls for a new prison that would house about 1,300 inmates and open by November 2022 at a location in or near Brown County. The Green Bay-Luxemburg corridor could be a good spot because it is near a major highway, State 54/57, and would not need water and sewer lines added. GBCI would be sold to a developer or another interested party by Nov. 1, 2018, then leased back to the state until the new prison is ready. Inmates would remain at GBCI until they could safely be transferred to a new facility. At least 100 beds in the prison would be set aside for overflow inmates from crowded jails in Brown and Kewaunee counties. 

Officials in Brown are considering a jail expansion that would likely cost the county more than $10 million. Part of the prison has been designated as a historic place. Steffen said he has met with a local preservation group, and that they would need to be partners in any redevelopment of the site.
Missouri- The U.S. Department of Transportation has given preliminary approval to the city of St. Louis' request to explore the privatization of St. Louis Lambert International Airport. The airport's preliminary application was approved under a 1996 law that allows the Federal Aviation Administration to approve up to 10 airport privatization projects. The city's next steps include choosing a private operator for the privatization of the airport and negotiating an operations agreement. Any agreement must also be approved by the airlines and city boards. 

The city of St. Louis had submitted a preliminary application to the FAA's Airport Privatization Pilot Program. This could free up millions of additional dollars from the airport that would help the city invest in its public projects like a north-south MetroLink expansion. The city, which owns the airport, currently receives about $6 million from the facility per current law. Travis Brown of Grow Missouri Inc., the nonprofit that is partnering with the city on the project, said that this figure could increase by four to 10 times under a public-private partnership. St. Louis would be the second major U.S. airport to operate under private management, following San Juan, Puerto Rico.
Delaware- Earlier this month, recommendations were submitted to Delaware Gov. John Carney by business leaders and state officials for a public-private partnership that would take over many of the economic development activities currently handled by the public sector. The report outlines a plan to shift economic development programs from public agencies, such as the Delaware Economic Development Office (DEDO), the Delaware Economic Development Authority and the Council on Development Finance to a public-private model. 

Titled the Delaware Prosperity Partnership, tasks would include attracting investment, marketing the state as a business center, recruiting fresh talent and researching economic trends. The partnership will also work with the county governments and other business groups, such as the Delaware Business Roundtable and the Delaware Chamber of Commerce. Some public programs, such as small business support, workforce development and neighborhood grants will remain the DEDO's mission. Furthermore, under this plan, DEDO will also continue to administer the Delaware Strategic Funds, which offers low-interest loans and grants to businesses for redevelopment, relocation and job creation. 

The report highlights the need for transparency, metrics and investment from both the private and public sides of the partnership. The Delaware Prosperity Partnership would be structured as a nonprofit, led by 15 board members and two co-chairs, one being the governor and the other a prominent business leader. The estimated budget is $2.5 million, with $1.5 million in state funding and a million in private funding. DEDO will retain oversight responsibilities for the new group. Carney said he would like to see legislation creating the group as soon as possible, with the report setting the goal of having a bill ready by the second quarter of 2017.
John Porcari
New York/ New Jersey- The Gateway Development Corporation, a non-profit made up of current and former federal, Amtrak, New Jersey Transit and Port Authority officials, is considering a public-private partnership for its proposed Gateway Program. The program would add a second rail tunnel under the Hudson River and upgrade rail infrastructure in New York and New Jersey. The project's price tag, an estimated $24 billion, needs the federal government to cover 50 percent of the cost. 

John Porcari, the interim head of the Gateway Development Corp., recently said that if the government doesn't provide the money, the agency will seek funding from a public-private partnership. Pocari said that under a partnership, the project might even be completed earlier. The current tunnel is more than a century old and in critical need of repair. The new tunnel would double capacity under the river. Planning for the $24 billion project is underway, and construction was scheduled to begin later this year. The project would rebuild the portal bridge over the Hackensack River and add two tunnels under the Hudson, allowing Amtrak to repair the existing tunnels damaged by Superstorm Sandy. Federal funding for the tunnel would come from the New Starts program, which funds $2.3 billion in transportation projects each year.
Calendar of Events 

June 18-20
The 2017 SelectUSA Investment Summit will be held June 18-20 at the Gaylord Hotel - National Harbor in Washington, D.C. The summit's theme "Grow with US" will highlight the
innovative business climate in the United States and feature investment opportunities from every corner of the country. Keynote speakers and panelists will lay out a clear roadmap of how businesses of any size, and any industry, can benefit and contribute to the U.S. economy. Register for the event here.
June 25-28
The Smart Cities Connect Conference and Expo will take place June 25-28 at the Austin Convention Center. This Internet of Things technology trade show will include hands-on workshops and smart technology demonstrations. Areas of focus include connected buildings, urban mobility, advanced networks, governance, infrastructure, energy, resiliency, technology and data and citizen life. Register for the event here.
About Government Contracting Pipeline

Note to media: Need expert commentary on procurement issues relating to public-sector entities, public-private partnerships (PPPs/P3s), state agencies or decision-makers? Give us a call at (512) 531-3900, and we'll arrange an interview for you with one of our experts.

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