Tuesday, July 19, 2011

How to Develop P3 Clients

In the industry, you never know if there will be stiff competition for a P3 project… or, surprisingly, none at all!

From a business development perspective this situation is both the best and worst imaginable. Here’s why:

◦ If you were successful at identifying the "lead" early enough and become part of a development team, you may find yourself in a situation with very little, if any, competitors.

◦ If, on the other hand, you missed the "lead" as many often do in P3 developments, you’ve lost a project opportunity.

So, how do you avoid losing the project opportunity? Take the time to understand an agency’s or jurisdiction’s policies related to P3 development. For many, enabling legislation provides a framework of what must be done to utilize the delivery method. But, it stops short of recommending policy and procedures for each agency or jurisdiction. It becomes incumbent on you to know the policies and procedures for selection in order to effectively position your firm for inclusion.

You will also need a network of P3 partners. Not every project is able to be profitably monetized from a P3 perspective. As a result you need that network of P3 partners and you must understand their "sweet spots". But remember, P3 partners are unique. Here are several scenarios you might encounter:

◦ In some cases, but not many, they are general contractors able to finance projects.

◦ In other cases, they may be commercial real estate developers who have expanded their practice to offer public-private development services.

◦ However, in most cases, these are third party development entities who have historically offered this method of delivery for projects such as health care or transportation.

What you must understand is that their decision to pursue (or not pursue) a project is based on a number of factors, including, but not limited to:

◦ Clearly developed performance criteria,

◦ Mitigated or manageable risk versus reward, and

◦ The ability to achieve a certain pro forma or return on investment.

What does that mean to you from a business development perspective? Simple. Your inclusion on a public-private partnership team can no longer just be based on the depth of your portfolio. Rather, it needs to contribute to a firm’s ability to address one or more "sweet spots" or factors. From their perspective, that’s real value.

Public-private partnership projects do not have to result in the pursuit of the precarious. P3 projects are not, however, for the faint of heart. Invest in studying enabling legislation, and policies and procedures, since this knowledge will provide you with the basic guideposts for the process. Engage your leadership team in identifying and understanding the firms who have a track record and history in public-private partnership development and in learning their "sweet spots". As the name implies, a P3 is a partnership. If well thought out and executed, a P3 can lead to a valuable relationship for many years (and projects) to come.

Want to learn more about the complicated world of P3? Join PSMJ on Tuesday, July 19 at 1:30 pm for our LIVE webinar, P3 for BD: What Business Development Needs to Know. Join PSMJ consultant, Karen Compton, CPSM for this 90-minute webinar that will help you understand what type(s) of projects can be monetized under this delivery, how to adapt your business development approach in light of P3 delivery, and how to develop your firm’s strategy for pursuing public-private-partnerships. Remember, if you are a PSMJ newsletter subscriber, you can save $100 off the regular webinar price…and if you aren’t already a subscriber, you can purchase a 1-year subscription to our A/E Marketing Journal just in time to enjoy these incredible savings!

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