Indiana has established itself as a national leader in leveraging private sector capital and innovation to finance, construct and maintain major transportation infrastructure projects.
Indiana statute allows INDOT and/or the Indiana Finance Authority (IFA) to contract with a private entity to manage all or part of a transportation project. Unlike INDOT’s traditional procurement process of Design-Low Bid-Build, innovative delivery determines the best mix of project elements, which could include the development, planning, design, construction, maintenance, repair, rehabilitation, expansion, financing, and/or operation of a transportation project through a public-private agreement (PPA).
Indiana has two P3 statutes for transportation projects – IC 8-15.5 (IFA projects) and IC 8-15.7 (INDOT projects). The statutes define which projects have to be procured using the INDOT vs. IFA statute. Both P3 statutes are very similar in terms of procurement and contracting requirements.
Any P3s that involve tolling, long-term contract terms (greater than 2 years), financing, or projects on Interstate 69 must be procured under the IFA statute. The contract will be between the IFA and the contractor, and INDOT provides technical expertise and oversees execution of/compliance with the contract. The contract is funded through INDOT appropriations: INDOT transfers money to IFA and IFA pays the expenses under the contract with those funds.
INDOT’s P3 Guidelines define the process for evaluating and selecting which projects to pursue as P3s, as well as a process for evaluating potential conflicts of interest. Some of the factors taken into consideration include: project complexity, opportunities for private sector innovation, need to accelerate project development, potential efficiencies through risk transfer, ability to transfer risk or responsibility, funding requirements, and ability to raise capital.
A Design-Build-Best Value procurement is one form of P3 and an alternative to the traditional design- low bid-build model traditionally used for project delivery. Best value procurements allow INDOT to establish the RFP evaluation criteria based on project priorities and select a winner based on that criteria.
The winning proposal will provide the best value to taxpayers as opposed to just the lowest cost.
Major Projects Delivery Director