HISTORY AND FRAMEWORK OF GEORGIAS TRANSPORTATION P3 LAW

Christopher Tomlinson, Esq.

Executive Director
State Road and Tollway Authority
Atlanta, Georgia

In 2003, the Georgia General Assembly enacted Georgias first Public-Private

Transportation Project legislation (Senate Bill 257). 1

Senate Bill 257 allowed for

unsolicited proposals to be submitted under what was then known as the Public Private
Initiative (PPI) program. As originally introduced, the bill intended to vest the power to
enter into unsolicited PPIs in the State Road and Tollway Authority (the Authority), but
these powers were shifted to the Georgia Department of Transportation (the
Department) when the Bill was passed to the House. In 2005, Senate Bill 270
amended the original legislation to allow for the Department to consider solicited as well
as unsolicited proposals.2
Under this initial P3 legislation, several unsolicited proposals were received by
the Department, including proposals for GA-316, GA-400, I-285W/I-20W and I-75/I-575.
Ultimately, only the I-75/I-575 project, also known as the Northwest Corridor project
moved forward. In 2006, the Department signed a preliminary agreement to develop

1 See O.C.G.A. 32-2-78 to -80 (2006), as enacted at 2003 Ga. Laws 905, 905-10, and
amended at 2005 Ga. Laws 902, 902-09.
2 Id.

concepts for the project, with a private entity known as Georgia Transportation
Partners.3

However, the law was changed again before the parties entered into a

contract for the actual construction of the project.

In 2009, the Georgia General Assembly passed Senate Bill 200 that revamped a
number of provisions in Chapter 2 of Title 32, which is the Georgia Department of
Transportation enabling statute. Section 10 of Senate Bill 200 contained a wholesale
repeal and re-write of Georgia Code Sections 32-2-78, 32-2-79 and 32-2-80, which
collectively comprise the PPI statutes.4
Senate Bill 200 passed the Georgia General Assembly and was signed by
Governor Sonny Perdue in 2009. Senate Bill 200 required that all P3 project proposals
be solicited proposals. This meant that projects must be specifically identified and
private sector proposals must be specifically requested by the Department through a
formal procurement process. Under the pre-2009 PPI program, the private sector had
the ability to suggest projects it thought the Department should pursue which, in some
cases, did not necessarily align with the States or the Departments priorities. With the
passage of Senate Bill 200, the Department controls the process of project
identification, selection, procurement and construction.

This revised statutory

framework is the basis for the Departments current alternative transportation project
delivery methodology now known as GDOTs Public Private Partnership (P3) program.
3 Georgia Transportation Partners was a joint venture comprised of Bechtel Infrastructure
Corp., Kiewit Infrastructure South Co., Dewberry and Davis LLC and STV Inc., with its
principal members being Bechtel and Kiewit.
4 O.C.G.A. 32-2-78 to -80 (2006), enacted at 2009 Ga. Laws 976, 984-87, became
effective upon approval by the Governor on May 11, 2009. It repealed and replaced in toto
former O.C.G.A. 32-2-78 to -80 (2006), as enacted at 2003 Ga. Laws 905, 905-10, and
amended at 2005 Ga. Laws 902, 902-09.

In light of the revised P3 legislation, the Department formally terminated

consideration of all unsolicited proposals received under the former statutory
framework, including Georgia Transportation Partners proposal for the Northwest
Corridor of I-75/I-575 in Cobb and Cherokee counties. The Department concluded that
with the fundamental shift in the P3 law, pursuit of any unsolicited proposals did not
make business sense.

In addition, the Department requested a formal Attorney

Generals Opinion as to whether they had the legal authority to continue forward had
they reached a different business conclusion.
On November 23, 2009, Georgias Attorney General issued Official Opinion 2009 - 7
which stated that,
[d]ue to significant procedural and substantive differences between [the
2003 PPI Law and the 2009 PPP law], it is [his] opinion that the
Departments legal authority to enter a binding contract under the former
PPI law was revoked by the 2009 PPP law, and those projects or portions
of projects which were not formalized by an executed contract before May
11, 2009, must be re-procured under the authority and procedures of the
2009 PPP law.5
With the revised P3 law in place and legal guidance from the Attorney General,
the Department proceeded to implement a revamped P3 program per the newly
enacted statutory framework.

The Department established a new Public-Private

Initiatives Division (commonly referred to as the P3 Division) 6 and promulgated

Administrative Rules pursuant to the statute. 7 The administrative rules set forth the
5 See 2009 Op. Att'y Gen. 2009-7 (Ga.2009)
6 O.C.G.A. 32-2-41(b)(6).
7 See O.C.G.A. 32-2-80(a)(6) and Ga. Comp. R. & Regs. r. 672-17-.01 et seq.
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Departments policy goals for the P3 program; establishes their solicited proposal
procurement process; and, establishes protest procedures to ensure proper due
process for potentially aggrieved parties. Through its new Administrative Rules, the
Department established a two-step procurement process as a key best practice
solicitation approach for awarding complex P3 transportation projects.
Two-step versus one-step procurement processes
Under the P3 programs administrative rules, the Department has developed a
two phase procurement process to identify technically qualified, financially capable
entities that are capable as serving as prime contractor for a P3 project and then select
the best value proposal submitted by a pre-determined short list of Proposers. In the
first step, the Department issues a solicitation document known as a Request for
Qualified Contractors (RFQC). The RFQC is a qualifications based evaluation and
selection of a list of prospective proposers. Cost is not a factor in this first step. The
process is similar to the qualifications based selection process typically used for the
selection of certain architectural and engineering professional services for vertical
construction projects under Georgia law.8 Under the Departments process, qualification
statements are evaluated to determine a short list of no less than two and no more than
five proposers, who are then invited to receive and respond to the Request for
Proposals (RFP) where price will be a factor (but may not be the sole factor).
The second and final step in the P3 programs procurement process is the RFP.
The RFP process allows for multiple one-on-one meetings 9 with each short-listed
8 See O.C.G.A. 50-22-1 et seq.
9 See Ga. Comp. R. & Regs. r. 672-17-.04.
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proposer where each proposer separate from one another is able to comment on the
RFP document, technical requirements and legal contract prior to submitting their final
proposals. Through feedback received in these meetings, the Department can consider
modifications to the project requirements, contract terms, etc. This results in a form of
negotiated discussions as part of the procurement process and is consistent with the P3
statute.10 This approach has been critical for conveying complex ideas, as well as
minimizing actual and perceived risks that could easily increase cost to the project.
During the second step of the procurement process, Proposers may also be
invited to submit Alternative Technical Concepts (ATCs). ATCs allow proposers to
suggest technical variations that are designed to enhance the performance of the
project, reduce capital costs or lower long term life cycle costs such as future operations
and maintenance costs. This level of flexibility is one of the key features of the P3
project delivery approach and does not exist in the Departments other project delivery
methods.
Once proposals are submitted in response to the RFP, actual proposal evaluation
is typically done on a Best Value basis where a predetermined weighting of price vs.
technical factors is used to determine the apparent successful offeror. This approach
differs from the Departments typical public procurement approach of low bid, though it
shares some similarities to the Departments procurement evaluation approach under its
separate design-build statute.11 Once an apparent successful proposer is identified, the
P3 statute and rules require public comment and public hearing periods before a
10 See O.C.G.A. 32-2-80(a)(4).
11 See O.C.G.A. 32-2-81.
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contract can be approved by the State Transportation Board and ultimately awarded to
the successful proposer.12
Use of innovative project delivery methods
Under the P3 program, the Department has the flexibility to use innovative
project delivery methods, such a Design-Build; Design-Build-Finance; Design-BuildFinance, Operate and Maintain; Availability Payments; Concession Agreements, etc.
Based on the funding specifics for a project as well as the States desire to shift risk, a
variety of these delivery methods may be used for future projects. The Northwest
Corridor Project was originally contemplated as a P3 Concessionaire agreement, but
ultimately went forward as a Design-Build-Finance project.
Additional Statutory Aspects
1. Department flexibility to update the P3 Program. Through the promulgation of
administrative rules, the Department has broad flexibility to update its P3
program to incorporate best practices, as long as those rules are consistent
with existing state and federal law. However, the P3 statute did contain a
specific check on this authority. Unlike the Departments other administrative
rules, which simply require the State Transportation Board's approval, both
the State Senate and House Transportation Committees must approve rules

12 See O.C.G.A. 32-2-80(a)(3), which only requires the Department to hold at least one
public hearing not later than the conclusion of the period for public comment and does
not specify any location requirements. Whereas, the State Senate and House Transportation
Committees required GDOT to amend their proposed Rules to mandate that GDOT shall
conduct at least one public hearing in each county in which a project, or any portion
thereof, is located. See Ga. Comp. R. & Regs. r. 672-17-.04(3)(g).

regarding the P3 program before the State Transportation Board 13 can adopt
them.14
2. Flexibility regarding performance and payment security. The P3 statute gives
the Department the discretion to determine the appropriate amount and type
of performance and payment security for each P3 project. In most public
works construction contracts, Georgia law requires 100% performance and
payment bonds.15 The Departments P3 statute allows for alternative forms of
security as well as for a lesser amount as determined by GDOT.16 This can be
very important as many of these projects can cost hundreds of millions of
dollars and obtaining 100% performance and payment bonds can be cost
prohibitive for most companies or otherwise seriously impair a companys
ability to obtain future bonding for other projects in which it may wish to be
engaged.
3. Additional Statutory Requirements. While the P3 statute gives the Department
broad authority to shape the P3 program, it does impose a series of
requirements17 on the Department. Some of the most pertinent include:

Identify and report to the State Transportation Board, by July 31 of each

odd numbered year, a list of P3-eligible projects

Evaluate P3-eligible projects to determine desirable levels of state, local

and private participation

13 The State Transportation Board is the governing board of the Georgia Department of
Transportation. It is a constitutionally created board consisting of 14 members (one for each
of Georgias Congressional Districts.) It has various enumerated powers including the power
to select and appoint the Commissioner. See Ga. Const. Art. IV, IV, Para. I.
14 Id.
15 Pursuant to O.C.G.A. 13-10-40 and 32-2-70, GDOT public works construction contracts
in excess of $100,000 must have performance and payment bonds equal at least to the
contract value to be paid by the department (Note: a contract for more than $100K, but less
than $300K can substitute a Letter of Credit for the bonds). The P3 statute provides an
exception to this general requirement.
16 O.C.G.A. 32-2-80(e).
17 O.C.G.A. 32-2-80.

Provide

quarterly

reports

updating

the

Legislative

Transportation

Committees on the progress of all P3 projects

Hold a 30 day public comment period with respect to responsive

proposals, which shall include one public hearing 18

Affirmative duty to protect a proposers proprietary information from

disclosure to the public and to competitors

4. P3 Sources of Funding. The Departments P3 statute recognizes that funding

for P3 projects may come from a multitude of sources including but not limited
to the private sector. It contemplates that funds may come in the form of
grants, loans, tolls, tax increments or other user-based fees. 19 The statute
recognizes that in order to access these fund sources the Department may
have to enter into agreements with other entities such as the federal
government, state authorities such as the State Road and Tollway Authority
and/or local entities (e.g. local development authorities). As such, the statute
authorizes the Commissioner to contract with such entities and to delegate
duties and responsibilities under the PPP law as he or she deems
appropriate; provided however that the State Transportation Board retains
final approval authority over any P3 contract awarded pursuant to the
statute.20
Its worth noting that although the statute does recognize the use of toll
revenue as a funding mechanism,21 the statute does not grant the Department
the power to actually establish, collect and enforce tolls, as those state-level

18 See O.C.G.A. 32-2-80(a)(3), which only requires the Department to hold at least one
public hearing not later than the conclusion of the period for public comment and does
not specify any location requirements. Whereas, the State Senate and House Transportation
Committees required GDOT to amend their proposed Rules to mandate that GDOT shall
conduct at least one public hearing in each county in which a project, or any portion
thereof, is located. See Ga. Comp. R. & Regs. r. 672-17-.04(3)(g).
19 O.C.G.A. 32-2-80(b).
20 O.C.G.A. 32-2-80(c).
21 O.C.G.A. 32-2-80(b).

powers are granted exclusively to the State Road and Tollway Authority.22 Not
only does the Department not have such authority; it is not a power that can
be delegated by the Department or the Authority to a private concessionaire.
5. Other Contracting Limitations Remain in Effect. Finally, it should be noted that
while the Departments P3 statute grants it the authority to enter into contracts
with entities such as the federal government, nothing in the statute alters
limitations placed on the Departments contracting authority 23 or ability to
pledge the full faith and credit of the state. 24 As such, each P3 project will
require a careful review of the funding mechanisms; the timing and availability
of funds; and, the legal, contractual and financial obligations required, in order
to successfully structure and implement the project under Georgia law. This
review will almost certainly require an examination of applicable provisions
beyond those contain in the Departments P3 statutes and its related
administrative rules, regulations and guidelines.
Conclusion
With proper planning and due diligence, Georgia now has a P3 framework that
can be leveraged to:

Attract new capital for projects and leverage existing funding

Capture private sector innovation

Accelerate project delivery

Provide greater cost certainty

Encourage life cycle costs efficiencies and quality facility performance

22 O.C.G.A. 32-10-65.
23 See O.C.G.A. 32-2-61 which, with limited exceptions, prohibits the Department from,
making or contracting any debts or entering into any contract for which it does not have
sufficient funds appropriated at the time of making said debt or entering into said contract
to enable it to meet such debt or contractual obligation.
24 See generally Ga. Const. Art. VII, IV, Para. IV

Shift risks from the State to the private sector when and where appropriate

Award based on best value, not simply price

Realize competitive tension to drive value

GENERAL REFERENCE MATERIALS

SP3 REGULATORY HIERARCHY FRAMEWORK

Legislation: Senate Bill 200 (2009) codified as O.C.G.A. 32-78 to -80.

Administrative Rules: See Ga. Comp. R. & Regs. r. 672-17-.01 to -.07

Guidelines: Available online at http://www.dot.ga.gov/doingbusiness/p3/Documents/P3Guidelines.pdf

Solicitation Documents (RFQs and RFPs): Varies from project to project

GDOT P3 Website: http://www.dot.ga.gov/doingbusiness/p3/Pages/default.aspx

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