What is Performance-Based Infrastructure?
Performance-Based Infrastructure (PBI) is a project delivery method that keeps assets in public ownership and consolidates responsibility for the key phases of a project’s full lifecycle–design, construction, and maintenance–into a performance-based contract with a private partner. This consolidation of responsibility, with its emphasis on payment for performance, can create additional public benefits when compared with traditional procurement methods: design and construction innovations; shorter design and construction timelines; improved cost and schedule certainty; lower total lifecycle costs; and long-term performance guarantees. PBI procurements can also include elements of private sector financing and operational responsibility.
Why Use the WCX Screening Tool?
Project sponsors should utilize this screening tool to obtain a preliminary indication of whether the PBI approach could produce a project at better value than traditional procurement methods. The tool indicates whether to proceed with additional PBI analysis such as market testing and/or a full business case study which carefully models project costs and risks quantitatively and qualitatively. These business case analyses determine which project delivery method–PBI or more traditional means–ultimately provides the public with the best long-term value. Please see below for key topic areas to consider when exploring a PBI procurement.
If you are interested in obtaining the complete project screening criteria, please contact Scott Boardman at (503) 477-9259 or firstname.lastname@example.org
Complexity – The more complex a project, the more value the PBI approach can offer.
Design and Construction Costs – The larger the project, the more opportunity it provides for cost efficiencies and more attractive it will be to potential private sector partners. For projects with lesser hard and soft costs, project aggregation can create the overall scale necessary for PBI procurement.
Renovation – The less that construction costs involve renovation, the better suited the project is as a PBI procurement.
Maintenance and Rehabilitation Costs – The greater the maintenance and rehabilitation costs during the potential contract term, the better suited a project is for PBI.
Performance Specification – The more that a project’s outcomes and outputs can be clearly specified, the better suited it is for the PBI delivery method.
Performance Term – The longer the potential “pay-for-performance” contract, the more suited a project is for the PBI delivery method.
Timeline – PBI projects are typically delivered on-time or ahead of schedule, provided that performance requirements are clearly described.
Legislative and Legal Framework – As a threshold matter, a project must have a clear, legal pathway to utilize the PBI method under federal, state, and/or local law.
Financing – The risk transfer from the public to private sector created by the PBI approach is achieved most effectively when a project includes private investment in a first-loss position.