Notice2026-04134
Evaluation of the Appropriateness of Public-Private Partnership Project Delivery, Including Value for Money or Comparable Analyses; Infrastructure Investment and Jobs Act
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 3, 2026
Issuing agencies
Transportation Department
Abstract
The Build America Bureau (the Bureau) and the Federal Highway Administration (FHWA) are issuing guidance to help the public understand statutory requirements to evaluate the appropriateness of using public-private partnerships (P3s) to deliver infrastructure projects. This guidance intends to inform project sponsors of the Bureau's implementation of the evaluation requirements when seeking Federal credit assistance through the Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA) and the Railroad Rehabilitation and Improvement Financing (RRIF) credit assistance programs and FHWA's implementation of the major project financial plan requirement to perform detailed value for money (VfM) analysis. The guidance does not contain any new criteria, does not impose any new legal requirements, and has no legal effect. This final guidance also addresses the comments received on the draft guidance published in the Federal Register on November 13, 2024.
Full Text
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<title>Federal Register, Volume 91 Issue 41 (Tuesday, March 3, 2026)</title>
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[Federal Register Volume 91, Number 41 (Tuesday, March 3, 2026)]
[Notices]
[Pages 10440-10446]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04134]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
[Docket No. DOT-OST-2026-0761]
Evaluation of the Appropriateness of Public-Private Partnership
Project Delivery, Including Value for Money or Comparable Analyses;
Infrastructure Investment and Jobs Act
AGENCY: Build America Bureau, Office of the Secretary (OST), and
Federal Highway Administration (FHWA), U.S. Department of
Transportation (DOT).
ACTION: Final guidance.
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SUMMARY: The Build America Bureau (the Bureau) and the Federal Highway
Administration (FHWA) are issuing guidance to help the public
understand statutory requirements to evaluate the appropriateness of
using public-private partnerships (P3s) to deliver infrastructure
projects. This guidance intends to inform project sponsors of the
Bureau's implementation of the evaluation requirements when seeking
Federal credit assistance through the Transportation Infrastructure
Finance and Innovation Act of 1998 (TIFIA) and the Railroad
Rehabilitation and Improvement Financing (RRIF) credit assistance
programs and FHWA's implementation of the major project financial plan
requirement to perform detailed value for money (VfM) analysis. The
guidance does not contain any new criteria, does not impose any new
legal requirements, and has no legal effect. This final guidance also
addresses the comments received on the draft guidance published in the
Federal Register on November 13, 2024.
FOR FURTHER INFORMATION CONTACT: Build America Bureau at
<a href="/cdn-cgi/l/email-protection#3c755252534a5d48554a597a55525d525f59687d7c585348125b534a"><span class="__cf_email__" data-cfemail="6c250202031a0d18051a092a05020d020f09382d2c080318420b031a">[email protected]</span></a> or call Jennifer Hara, Strategic
Partnerships Program Manager at 202-839-0199.
SUPPLEMENTARY INFORMATION:
Contents
1. Introduction
2. Definitions
3. Principles of P3 Analysis
4. P3 Analysis Requirements
5. Compliance Guidelines
A. Early Phase P3 Evaluation (Stage 1)
B. Progressive P3 Procurement (Stage 1A)
C. Subsequent P3 Evaluations (Stage 2)
D. Auditing and Public Information
6. P3 Post-Implementation Review Requirements
1. Introduction
A public-private partnership (P3) is an infrastructure project
delivery method in which a public owner and project sponsor (called the
public sponsor) leverages private sector resources and methods through
a long-term contract that finances the project and typically includes
design, construction, maintenance, and/or operations. A mutually
beneficial P3 aligns public and private interests through the
commercial and financial terms of a project agreement, herein referred
to as the concession agreement.
Where appropriate, P3 delivery could provide more value for
projects as compared to conventional public delivery. However, in some
cases, P3 delivery also creates complexities and limitations for the
public sponsor. Public sponsors can analyze these complexities,
including project risks, and consider how best to manage them before
choosing a P3 with its long-term partnership obligations. The general
term for the process of analyzing and comparing advantages and
disadvantages of P3 versus conventional public delivery options is
value for money analysis (VfM). The analysis demonstrates whether
delivering a project using a P3 would yield more or less value to the
public sponsor than the most suitable public delivery option. The
analysis also documents the goals, objectives, and underlying
assumptions for the project delivery. The intent of VfM is not to
analyze the benefits of the project itself but to document the analysis
underlying the public sponsor's chosen delivery option based on
expected benefits to the public.
Federal surface transportation statutes require public sponsors to
conduct a VfM or comparable analysis for certain projects, as described
below and shown in Exhibit 1. A VfM or comparable analysis is required
for:
<bullet> Any project type using any delivery method where the
project cost is over $750 million, the project sponsor is a public
entity seeking Federal credit assistance, the project is in a state
with transportation P3 authorizing laws, and the project generates
revenue or user fees;
<bullet> Any surface transportation project receiving Federal
financial assistance under title 23, United States Code, in which the
project sponsor intends to carry out the project through a P3 delivery
method with an estimated project cost over $500 million; and
<bullet> Any project type using a P3 delivery method and seeking
Federal credit assistance.
On November 15, 2021, the Infrastructure Investment and Jobs Act
(IIJA) was signed into law.\1\ Section 70701 of IIJA requires that
certain projects with an estimated total cost of more than $750,000,000
conduct a VfM or comparable analysis. Additionally, section 11508 of
IIJA requires that Major Projects \2\ under section 106(h) of title 23,
United States Code, for which the project sponsor intends to carry out
the project through a P3 include a detailed VfM or similar comparative
analysis. In addition, many states' P3 laws require public sponsors to
conduct due diligence analysis, such as VfM, to determine whether the
P3 delivery method would provide more value and benefits to the public
sponsor than other delivery methods.
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\1\ Public Law 117-58 (2021).
\2\ A Major Project is a project funded with Federal financial
assistance under title 23, United States Code, with a total
estimated cost of $500 million or more and such other projects as
identified by the Secretary of Transportation pursuant to 23 U.S.C.
106(h).
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This final guidance addresses the comments on the draft guidance
posted in the Federal Register (89 FR 89692) on November 13, 2024. The
public comment period closed on December 31, 2024. The American
Federation of State, County and Municipal Employees (AFSCME) suggested
including ``to enhance worker and community prosperity and well-being,
deliver value and serve the public interest, and address transparency
and accountability'' in the use of VfM data. The Florida Department of
Transportation (FDOT) suggested tightening the meaning of ``generate
user fees or other revenues'' and recommended clearer definitions in
Exhibit 2. The Virginia Department of Transportation (VDOT) suggested
adding analysis of the public contribution that would be required to
cover all costs in excess of private financing as another step in the
detailed Stage 2 evaluation and that any VfM not place an undue burden
on the public agency. An anonymous commenter suggested that any user
fees or other revenues generated be material.
This guidance is not intended to build the capacity or capability
of entities to develop and deliver infrastructure projects through P3s.
Entities that want to build their capacities and capabilities
[[Page 10441]]
may access Bureau and FHWA educational and technical assistance
resources.\3\ Bureau and FHWA subject matter experts are available upon
request to conduct targeted workshops and provide training materials
for project sponsors.
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\3\ <a href="https://buildamerica.dot.gov/buildamerica/">https://buildamerica.dot.gov/buildamerica/</a>and <a href="https://www.fhwa.dot.gov/ipd/p3/toolkit/">https://www.fhwa.dot.gov/ipd/p3/toolkit/</a>.
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To improve readability, clarity, and brevity, this guidance
describes the requirements with words that might differ from statute
and regulation. The guidance does not contain any new criteria, does
not impose any new legal requirements, and has no legal effect. The
contents of this document do not have the force of law and are not
meant to bind the public in any way. This document is intended only to
share information with the public on existing requirements under the
law or agency policies and is not intended to modify any Major Projects
requirements under Section 106(h) of title 23, United States Code or
IIJA. Accordingly, please refer to the applicable statute and
regulation for appropriate context. Below is a schematic that explains
when a VfM is required and when it is not (Exhibit 1).
Exhibit 1: Decision Schematic for VfM Requirements
[GRAPHIC] [TIFF OMITTED] TN03MR26.002
2. Definitions
For purposes of this guidance, the definitions in Exhibit 2 apply.
If the exhibit does not specifically define a term, or there is not a
definition in the legislation, industry standard definitions apply.
Exhibit 2--Definitions of Terms in This Guidance
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Term Definition
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Public-private partnership (P3). A long-term arrangement between a
public sponsor and a private entity
for delivery of a project that
includes at least the following
elements: design, construction,
financing, and either operations or
maintenance or both of the project
over a term specified in a concession
agreement (as defined below).
Agreement types:
[[Page 10442]]
Concession Agreement........ An agreement between a public sponsor
and private entity (e.g.,
concessionaire or developer) signed
after a preferred bidder is selected
or contract price is agreed upon.
Other names for such agreements
include P3 agreement, project
agreement, project development
agreement, and comprehensive project
agreement. IIJA section 70701(a) uses
the term ``Project Development
Agreement,'' which the Bureau
interprets as a concession agreement.
Pre-Development Agreement... An agreement between a public sponsor
and private entity to develop and
design the project further and
finalize a committed proposal.
Contract types:
Long-Term Contract.......... A contract between a public sponsor
and a private entity to deliver a
project, including some or all
elements for design, construction,
financing, operations, and
maintenance over the concession term.
Short-Term Contract......... A contract between a public sponsor
and private entity to deliver a
project that does not include
operations, maintenance, or
financing.
Evaluation types:
Initial Evaluation.......... An evaluation that sets high-level
criteria based on the public
sponsor's project goals and
objectives. For progressive P3
procurements before detailed project
scope, cost, and schedule are
available, an evaluation that
compares advantages and disadvantages
of all practical delivery options,
including P3 delivery. The public
sponsor documents the process for
selecting the preferred delivery
option based on the project's
characteristics, feasibility, policy
goals, and objectives.
Detailed Evaluation......... An evaluation that compares all
practical delivery options to select
the most suitable public delivery
option and most suitable P3 delivery
option and then estimates the likely
quantitative outcomes of public and
P3 options. Detailed evaluation may
account for non-financial benefits
such as differences in service levels
for the public and costs to the
public and society at large by use of
benefit-cost analysis methodology.
For example, if one delivery method
results in an earlier start of
operations than the other, the public
will benefit earlier from higher
service levels, which can be
quantified in economic terms.
Federal financial assistance.... Includes grants and loans from the
Federal government to support
infrastructure investment, not
including private activity bond
allocations and grants for technical
assistance.
Major Project................... A project funded with Federal
financial assistance under title 23,
United States Code, with a total
estimated cost of $500 million or
more and such other projects as
identified by the U.S. Secretary of
Transportation pursuant to 23 U.S.C.
106(h).
P3 procurement types:
Conventional P3 procurement. Public sponsor seeks competitive,
fixed price, and certain schedule
bids from qualified bidders after the
public sponsor completes a limited
preliminary design of the project.
Progressive P3 procurement.. Through a competitive process early in
project development, the public
sponsor selects a qualified private
entity to develop a project without a
bid price.
------------------------------------------------------------------------
3. Principles of P3 Analysis
If a VfM might be required, the appropriateness of P3 delivery as
an option should be evaluated early in the project life cycle (such as
during project identification and delivery option screening) and as the
project progresses during project development and procurement. If a VfM
is not required, Bureau encourages, but does not require, a VfM for
projects likely to cost over $500 million to help inform decision
makers. The Bureau encourages, but does not require, public sponsors to
study delivery methods that may be outside their existing authorities
to document and communicate how new authorities could increase public
benefits. With better and more information available later in the
project life cycle, and as the commercial and financial terms or
assumptions change, the public sponsor should update the P3 evaluation
by conducting detailed VfM to ensure a P3 model is still appropriate
and in the public interest.
To ensure compliance with statutory VfM or comparable analysis
requirements, the Bureau expects public sponsors to evaluate the
appropriateness of, and value to be generated from, P3 project delivery
at two decision points in the project lifecycle: (1) after project
identification and before the project development phase, and (2) after
the P3 procurement and before entering into a concession agreement
between the public sponsor and private developer at commercial close.
Exhibit 3 below shows these two decision points in a simplified P3
project lifecycle.
[[Page 10443]]
Exhibit 3: Simplified P3 Project Lifecycle
[GRAPHIC] [TIFF OMITTED] TN03MR26.003
The project life cycle presented in Exhibit 3 also applies to Major
Projects under section 106(h) of title 23, United States Code, with an
estimated total cost above $750 million that meet the other criteria
under IIJA section 70701. Additionally, under IIJA section 11508, the
Major Project financial plan for Major Projects being carried out
through a P3 must include a detailed VfM or similar comparative
analysis. This analysis is submitted as part of the initial financial
plan, or subsequent financial plan annual update, where appropriate.
For requirements applicable to Major Projects that do not meet these
criteria, see FHWA's Major Projects guidance documents, available at
<a href="https://www.fhwa.dot.gov/majorprojects/">https://www.fhwa.dot.gov/majorprojects/</a>.
Observing principles derived from lessons learned and best
practices helps public sponsors objectively analyze the advantages and
disadvantages of delivering an infrastructure project through a P3.
Following these principles also helps public sponsors communicate to
the public the basis of their decisions. The next paragraphs describe
principles public sponsors should incorporate into their analyses to
support requests for DOT Federal financial assistance.
A. Establish Delivery Option Goals. VfM provides insights to
support decision-making, when the public sponsor defines goals related
to the delivery method. Examples of delivery goals include maximizing
use of innovative approaches and technologies that enhance value and
efficiency for the public good, preserving flexibility for future
improvements, promoting economic well-being and broad-based
opportunity, creating high quality jobs, and minimizing the taxpayers'
financial burden in subsidizing the project. Delivery goals may be
different than project goals. Whether a project is likely to achieve
project goals is better analyzed through techniques such as benefit-
cost analysis or environmental or economic impact analysis, rather than
VfM.
B. Identify Practical Delivery Options. After setting project
delivery goals, public sponsors can consider which delivery methods are
likely to fulfill the identified goals. Sponsors can then narrow their
choices by screening out impractical ones. For example, a public
sponsor might have authority for some delivery methods and not others.
Documenting the basis for rejecting a delivery method or benefits that
unavailable delivery methods could generate with new authorities
enhances the credibility of the public sponsor's process and provides
useful information and insight to decision makers. Also, to the maximum
extent practicable, public sponsors should solicit from the private
sector and the public input and feedback on innovative funding,
financing, and delivery solutions that could deliver better value for
the public.
C. Inform Subsequent Decisions. VfM analyzes tradeoffs between
delivery options to identify the most suitable delivery option. The
public sponsor can then determine whether the public or P3 option
provides the most value relative to the established delivery option
goals. The purpose of VfM is to inform selection of the project
delivery method based on a transparent and factual process, not to
justify project delivery decisions public sponsors previously made.
Using VfM as intended, public sponsors will be able to show how the
analysis preceded, and directly contributed to, the decision to advance
the project with a P3 or other delivery approach.
D. Analytical Framework and Data. VfM involves predictions,
projections, and assumptions. Public sponsors should (a) use actual,
verifiable data, if possible, (b) where predictions, projections, and
assumptions are necessary, provide the methodology and basis for the
inputs, and (c) utilize public agencies or independent entities with no
conflicts of interest.
E. Transparency and Accountability. To the maximum extent
practicable, public sponsors should make information available to the
public, including (a) the project's delivery goals, (b) the information
used in the VfM, (c) how the VfM was employed in the decision-making
process, and (d) the decision makers charged with selecting the final
delivery method.
4. P3 Analysis Requirements
Several provisions in legislation established or amended statutory
P3 evaluation requirements. Applicability of these requirements depends
on project size, source of funding or financing, phase of the project
life cycle, and other attributes. In 2005, the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users
defined the term major project, reduced the financial plan requirement
threshold to $500 million, and required submission of project
management
[[Page 10444]]
plans.\4\ In 2012, the Moving Ahead for Progress in the 21st Century
Act established the requirement to assess the appropriateness of a P3
for delivering major projects.\5\ The 2015 FAST Act established the
requirement that public sponsors receiving credit assistance from the
Bureau conduct VfM or comparable analysis before deciding to advance
projects as P3s.\6\ Enacted November 15, 2021, IIJA established new,
and amended prior, statutory P3 evaluation requirements.\7\ IIJA:
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\4\ Public Law 109-59, sec. 1904(a) (2005), amending 23 U.S.C.
106(h).
\5\ Public Law 112-141, sec. 1503(a)(4)(B) (2012), amending 23
U.S.C. 106(h).
\6\ Public Law 114-94, sec. 9001(a) (2015), adding 49 U.S.C.
116(e)(3).
\7\ Public Law 117-58, secs. 11508 and 70701 (2021).
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<bullet> establishes a P3 evaluation requirement for projects with
total estimated costs of more than $750 million. Sponsors of these
projects are required to conduct VfM if they are in a State in which
there is a State law authorizing the use and implementation of P3s for
transportation projects, intend to seek TIFIA or RRIF credit
assistance, and the project is anticipated to generate user fees or
other revenues that could support project capital and operating
costs.\8\ This provision of IIJA further specifies the level of detail
and specific elements to be included in this detailed P3 evaluation;
\9\
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\8\ Public Law 117-58, sec. 70701 (2021).
\9\ Public Law 117-58, sec. 70701(a) (2021).
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<bullet> amends the requirements of section 106(h) of title 23 to
require public sponsors of projects with an estimated cost of $500
million or more, receiving title 23 assistance, and intended to be
delivered as a P3 to conduct a detailed VfM or similar comparative
analysis; \10\
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\10\ Public Law 117-58, sec. 11508(d)(1)(C) (2021), adding 23
U.S.C. 106(h)(3)(D).
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<bullet> stipulates reporting and transparency requirements
throughout project delivery and after key project delivery milestones;
\11\ and
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\11\ Public Law 117-58, secs. 11508(b), (c), and 70701(c), (d)
(2021).
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<bullet> adds VfM as a TIFIA eligibility criterion for projects to
be carried out through P3s.\12\
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\12\ Public Law 117-58, sec. 11508(d) (2021), adding 23 U.S.C.
602(a)(11).
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Exhibit 4 summarizes the statutory requirements for projects
required to conduct a VfM and the expected evaluation type based on the
project delivery type.
Exhibit 4--P3 Evaluation Requirements by Project and Delivery Type
----------------------------------------------------------------------------------------------------------------
Required public sponsor P3 evaluation *
Project type Delivery type --------------------------------------------------------------
Stage 1 Stage 1A Stage 2
----------------------------------------------------------------------------------------------------------------
All transportation projects All delivery Initial............ n.a................ Detailed.
costing more than $750 types, except ................... ................... ...................
million carried out by progressive P3. Initial............ Initial............ Detailed.
certain public agencies in Progressive P3...
states with P3 authorizing
authority for transportation,
seeking TIFIA or RRIF credit
assistance, and generate user
fees or other revenues \13\.
--------------------------------------------------------------
Title 23 projects costing $500 All P3........... Detailed **
million or more \14\.
--------------------------------------------------------------
All projects proposed for P3 Conventional P3.. Initial............ n.a................ Detailed.
delivery and seeking TIFIA or Progressive P3... Initial............ Initial............ Detailed.
RRIF credit assistance \15\.
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Notes:
* Stage 1: early in project development before starting the procurement process.
Stage 1A: for a progressive P3, before signing a pre-development agreement.
Stage 2: before signing a concession agreement with a private P3 entity, if a P3 delivery method is selected in
Stage 1.
n.a.: not applicable.
** The Major Project financial plan for Major Projects being carried out through a P3 agreement must include a
detailed VfM or similar comparative analysis. This analysis is submitted as part of the initial financial
plan, or subsequent financial plan annual update, where appropriate. Project sponsors of Major Projects under
23 U.S.C. 106(h) should consider whether their projects are also subject to additional VfM requirements
detailed in this guidance.
5. Compliance Guidelines
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\13\ Public Law 117-58, sec. 70701 (2021).
\14\ Public Law 117-58, sec 11508(d)(1)(C) (2021).
\15\ 49 U.S.C. 116(e)(3) and 23 U.S.C. 602(a)(11).
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This section details and clarifies aspects of the P3 evaluation
requirements. Public sponsors and their projects often have unique
attributes and circumstances that require in-depth analysis and review
that might differ from the general descriptions herein. We encourage
you to discuss your projects and applicable requirements directly with
the Bureau and FHWA staff. Email us at <a href="/cdn-cgi/l/email-protection#115364787d75507c746378727051757e653f767e67"><span class="__cf_email__" data-cfemail="4507302c2921042820372c262405212a316b222a33">[email protected]</span></a> or
<a href="/cdn-cgi/l/email-protection#ffb9b7a8beb29e95908daf8d90959a9c8b8cbf9b908bd1989089"><span class="__cf_email__" data-cfemail="71373926303c101b1e0321031e1b1412050231151e055f161e07">[email protected]</span></a>.
A. Early Phase P3 Evaluation (Stage 1). Outlining strategies for
the business case early in the project lifecycle, i.e., project
identification and screening, is critical for successful project
delivery selection. During project identification and screening, public
sponsors should engage relevant stakeholders through brainstorming and
risk assessment workshops and may use any tool for qualitative or high-
level quantitative analysis to compare the most suitable public project
delivery option and the appropriate P3 option.
Project sponsors seeking credit assistance under TIFIA and RRIF for
all projects procured as P3s (regardless of size) are required to
complete VfM or comparable analysis prior to deciding to advance the
project as a P3.\16\ Because the decision to advance a project as a P3
is made at Stage 1, public sponsors that anticipate seeking either
TIFIA or RRIF credit assistance directly or that TIFIA or RRIF might be
part of their preferred bidder's financing package, must conduct VfM at
Stage 1. Information available at Stage 1 is often limited, so the
Bureau anticipates VfMs conducted at this stage would comprise an
initial analysis for P3s and any project required to perform detailed
VfM under IIJA Section 70701.
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\16\ 49 U.S.C. 116(e)(3) and 23 U.S.C. 602(a)(11).
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If the public sponsor cannot define a workable public delivery
option (e.g., in a transit-oriented development project for which a
private entity already owns the land or has secured development
rights), VfM or comparable analysis might not be feasible. In such
cases, the public sponsor can demonstrate compliance with statutory
requirements by documenting before signing a concession agreement why
it cannot complete a meaningful VfM or
[[Page 10445]]
comparable analysis and why it decided to use a P3 delivery option.
B. Progressive P3 Procurement (Stage 1A). In a progressive P3
procurement, the public sponsor selects a private developer and
executes a pre-development agreement to design and de-risk the project
collaboratively. Then, the private developer negotiates and submits a
firm price proposal for delivering the project. If the public sponsor
accepts the proposal, the parties sign a concession agreement.
The Bureau expects public sponsors using a progressive P3
procurement to conduct an initial VfM before signing a pre-development
agreement and a detailed VfM prior to signing a concession agreement.
Similar to the discussion of Stage 1 above, the Bureau expects the
evaluation at Stage 1A will be an initial VfM with limited information
available regarding the project. After the private developer submits a
committed bid price pursuant to the pre-development agreement, the
Bureau expects the public sponsor to update and finalize the VfM based
on the terms and conditions of the proposed P3 agreement. At this
point, the Bureau expects the public sponsor to conduct a detailed P3
evaluation prior to signing a concession agreement.
C. Subsequent P3 Evaluations (Stage 2). The Bureau expects this
Stage 2 detailed analysis to be done when the project sponsor has
additional details on project cost, funding, financing, and risk
allocation and before signing the concession agreement. If the Stage 1
analysis resulted in the selection of a non-P3 delivery method, a Stage
2 analysis is not required.
The detailed Stage 2 evaluation must include:
i. the life-cycle cost and project delivery schedule;
ii. the costs of using public funding versus private financing for
the project;
iii. the public contribution, if any, that would be required to
cover all costs necessary for the development and/or operation of the
transportation facility in excess of financing available;
iv. a description of the key assumptions made in developing the
analysis, including--
a. analysis of any Federal grants or loans and subsidies received
or expected (including tax depreciation costs);
b. key terms of the proposed P3 agreement, if applicable,
(including the expected rate of return for private debt and equity),
and major compensation events;
c. discussion of the benefits and costs associated with the
allocation of risk;
d. determination of risk premiums assigned to various project
delivery scenarios;
e. assumptions about use, demand, and any user fee revenue
generated by the project; and
f. any externality benefits for the public generated by the
project;
v. forecast of user fees and other revenues expected to be
generated by the project, if applicable; and
vi. any other information the Secretary of Transportation
determines to be appropriate.\17\
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\17\ Public Law 117-58, sec. 70701(a) (2021).
Project sponsors may choose any tool that provides analysis of
items (i), (ii), and (iii), and items (iv)(a) through (f), above to
meet the requirements for detailed VfM. The Bureau recommends public
sponsors document the basis for the analysis, project goals and
objectives, and the underlying assumptions and rationale, and then make
such analysis and documentation available for public review. Any
enhancements or adjustments, such as risk premiums, should be based on
actual data, to the extent possible, and reasonably verifiable. The
Bureau recommends using assumptions that are supported by empirical
data. Where empirical data is unavailable, the absence of this data
should be directly expressed.
The Bureau strongly encourages public sponsors of P3 projects that
anticipate seeking TIFIA or RRIF credit assistance to undertake both
(a) an initial analysis at Stage 1 or Stage 1A and (b) a detailed VfM
or comparable analysis at Stage 2. The Bureau will evaluate the type of
VfM conducted at each stage to determine whether a public sponsor has
satisfied all applicable requirements. In doing so, the Bureau will
seek to ensure the public sponsor used information appropriate for the
stage at which the analysis was conducted and that the VfM was
thorough. The Bureau therefore expects to see a bifurcated analysis as
described above and that public sponsors of P3 projects seeking Bureau
credit assistance \18\ conduct a detailed VfM that includes evaluation
of the elements in IIJA Section 70701. The Bureau is unlikely to find a
public sponsor satisfied these requirements if a P3 project of any size
or a project with an anticipated cost of more than $750 million in a
State with P3 laws and that generates user fees or other revenues did
not undergo an initial VfM at Stage 1 (or Stage 1A for a progressive
P3) and, for projects selected for delivery as a P3 as a result of
Stage 1 analysis, a detailed VfM at Stage 2 that evaluates the elements
in IIJA Section 70701. The Bureau interprets ``generates user fees or
other revenues'' as having the potential to generate more than a de
minimis amount.
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\18\ Including where the public sponsor is not directly seeking
TIFIA or RRIF credit assistance but anticipates that its preferred
bidder might do so.
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If the public sponsor cannot define a workable public delivery
option, the public sponsor can demonstrate compliance with statutory
requirements by documenting before signing a concession agreement why
it cannot complete a meaningful VfM or comparable analysis and why it
decided to use a P3 delivery option.
D. Auditing and Public Information. Transparency is an integral
part of proper public sector decision making, particularly for long
term commitments. The Bureau recommends public sponsors conduct an
independent audit for projects subject to this guidance prior to
signing contracts. An entity that has no ties to the project and no
conflicts of interest should conduct the audit and should ensure all
processes have been followed and all major risks are properly
identified, documented, and shared with decision makers and
stakeholders. It should also ensure all local and Federal approvals
needed prior to execution of the concession agreement are in place and
execution of the agreement will not impose any undisclosed major risks
to the public.
In addition to the foregoing, Section 116(e)(3) of title 49, United
States Code, requires public sponsors to make the analysis and key
terms of the concession agreement publicly available at an appropriate
time. Also, IIJA Section 70701 requires public sponsors to post the
results of the analysis on the project's website. The Bureau believes
the appropriate time is as early as possible and before signing the
concession agreement, subject to any statutory or other binding
limitations on a public sponsor's ability to make this information
public.
6. P3 Post-Implementation Review Requirements
The FAST Act and IIJA require project sponsors to conduct post-
implementation reviews of the private partners' compliance with
concession agreement terms, as a condition for receiving TIFIA and RRIF
credit assistance.\19\ IIJA directs the Secretary to require the public
sponsors of title 23 P3 projects costing $100,000,000 or more that
receive Federal financial assistance, including Bureau credit
assistance, not
[[Page 10446]]
later than three years after the date of opening of the project to
traffic, to:
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\19\ 49 U.S.C. 116(e)(3)(A)(iii) and (iv) and Public Law 117-58,
sec. 11508(b) (2021).
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<bullet> Review the project, including the private partner's
compliance with the terms of the concession agreement;
<bullet> Certify to the Secretary that the private partner is
meeting terms of the concession agreement for the project or notify the
Secretary about the private partner's non-compliance, including a brief
description of each violation of the concession agreement; and
<bullet> Make publicly available the above certification or
notification without disclosing proprietary or confidential business
information.\20\
Section 116(e)(3)(A)(iii) of title 49, United States Code,
establishes a similar review requirement for any P3 project receiving
TIFIA or RRIF credit assistance and further requires the public sponsor
to provide a publicly available summary of total Federal financial
assistance in the project. To satisfy these statutory review and
disclosure requirements, the Bureau will expect a public sponsor to
sign, prior to closing on Bureau credit assistance, a direct agreement
(or other enforceable commitment) with the Bureau that memorializes the
public sponsor's obligation to conduct and disclose the results of such
review.
A public sponsor should incorporate into its concession agreement
the public sponsor's obligation to evaluate the concessionaire's
performance and report as the law requires. A public sponsor can find
the requisite statutory basis for his or her obigations at <a href="https://www.govinfo.gov/content/pkg/PLAW-117publ58/html/PLAW-117publ58.htm">https://www.govinfo.gov/content/pkg/PLAW-117publ58/html/PLAW-117publ58.htm</a>
(Public Law 117-58, 11508 and Public Law 117-58, 70701).
Morteza Farajian,
Executive Director, Build America Bureau.
[FR Doc. 2026-04134 Filed 3-2-26; 8:45 am]
BILLING CODE P
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</html>Indexed from Federal Register on March 3, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.