Recognizing that the nation’s infrastructure includes buildings, a bipartisan group of House lawmakers has introduced legislation aimed at spurring private investment in our nation’s public buildings infrastructure. The bill, H.R. 5361, would enable the use of public-private partnerships, or P3s, to facilitate the design and construction of public buildings. The bill’s original cosponsors include Reps. Mike Kelly (R-PA), Earl Blumenauer (D-OR), Lee Zeldin (R-NY), Richard Nolan (D-MN), Alcee Hastings (D-FL), and Ron Kind (D-WI).
P3s leverage private sector funds for public projects that otherwise might have trouble being financed.
The use of P3s to deliver public buildings has historically been limited because, unlike in the transportation sector, public buildings are not eligible for exempt facility bonds. This results in a significantly higher cost of financing for municipalities and cities, and imposes an unnecessary hurdle. H.R. 5361 would eliminate this barrier and create a new category of exempt facility bonds for qualified government buildings, such as public hospitals and courtrooms.
H.R. 5361 is delivery method “neutral,” and deals only with the financing side of projects. The AIA is working with local, state and federal policymakers to ensure that P3 projects employ longstanding, commonsense procurement practices – such as the use of qualifications-based selection, two-step selection procedures rather than one-step, stipends for detailed proposals, and a cap on the number of offerors shortlisted.
Private financing has for years only been accessible for the funding of horizontal projects (i.e., roads and bridges). This legislation is significant for the way it shifts how policymakers think about “infrastructure” by including vertical construction as well as horizontal. Although its prospects for passage this year are relatively slim as the 2016 elections loom, the AIA continues to work with its allies to identify and support innovative financing tools to help rebuild vertical infrastructure.
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Alex Ford, Manager, Federal Relations