Navigating Risk Allocation In P3 Agreements

As public infrastructure in the U.S. continues to age, public-private partnerships have become an increasingly popular procurement vehicle for state and local governments. In the right circumstances, a P3 may be a valuable tool to assist the public sector in delivering critical transportation and other public infrastructure projects--perhaps years, if not decades, ahead of schedule.

While early project delivery is attractive to the construction industry, the risk profiles and allocations of a P3 often differ significantly from a traditionally-procured project. Understanding the contractual framework and principal risk items is essential to any construction firm interested in dipping its toe into the P3 waters.