4808.1Generally: If the DC OP3 selects a Preferred Bidder through either a solicited or unsolicited procurement process, the Owner Agency will negotiate with the preferred proposer to enter into a P3 agreement as the Owner Agency will be the designated public entity for all agreements.
4808.2Requirements for the Public-Private Partnership Agreement: Each P3 agreement must include the following elements:
(a) An agreement term length clearly defined to include the estimated construction and operational period, as needed, not to exceed 99 years from the date of full execution of the agreement; (b) A complete description of the P3 facility to be developed and the functions and responsibilities to be performed by the District and the private entity;(c) Risk mitigation plans and responsibilities for facility operations and maintenance for both the private entity and the Owner Agency; (d) Type of property interest, if any, that the private entity will have in the project facility during both the construction and operations phases; (e) Terms regarding the planning, acquisition, financing, development, design, construction, reconstruction, rehabilitation, replacement, improvement, maintenance, management, operation, repair, leasing, and ownership of the P3 facility; (f) The rights that the District and the private entity have, if any, in revenue generated as a result of the agreement; (g) The minimum quality standards, technical requirements, and key performance indicators applicable to the P3 project, including performance criteria, reporting requirements, incentives, cure periods, performance points systems, monitoring rights of the Owner Agency and the DC OP3, and penalties for failure to achieve these standards; (h) A maintenance plan for the full life cycle of the P3 project; (i) A hand-back plan that includes requirements regarding state of good repair of the facility;(j) Any compensation and/or revenue structure of the private entity, including the extent to which, and terms upon which, the private entity may charge fees to individuals and entities for the use of the P3 facility. Under the P3 Act, no new fees may be imposed nor may existing fees be amended unless authorized by a subsequent act of the Council;(k) A schedule for an annual independent audit report to be furnished by the private entity to the DC OP3 and Owner Agency covering all aspects of the agreement and the financial condition of the private party; (l) A requirement that the private entity maintain or cause to be maintained performance and payment bonds, letters of credit, or other acceptable forms of security in compliance with title VII of the Procurement Practices Reform Act of 2010, effective April 8, 2011 (D.C. Law 18-371; D.C. Official Code §§ 2-351.01 et seq.);(m) Insurance requirements for any facility to be operated by the private entity. The insurance must be in an amount that ensures coverage of tort liability for the District and the private entity, and its employees; (n) Grounds for termination of the P3 agreement by the Owner Agency or the District government in general and the financial impact of that termination;(o) Grounds for termination of the P3 agreement by the private entity and the financial impact of that termination;(p) Procedures for amending the P3 agreement;(q) Provisions for the termination of the P3 agreement and the disposition of the P3 facility upon termination; (r) All rights and remedies available to the District government for material breach of the agreement by the private entity, up to and including material default; (s) Identification of funding sources to be used to fully fund the capital, operation, maintenance, and other expenses under the P3 agreement;(t) Certification of compliance with applicable District and federal laws;(u) A plan for the sharing of refinancing gains between the private entity and the District in the event that the private partner generates a large financial benefit from the refinancing or restructuring of the P3 project; and,(v) Any additional provisions determined to be appropriate by the DC OP3 and Owner Agency.4808.3Negotiation: After the issuance of a notification that a preferred bidder and a secondary bidder have been selected as described in §§ 4804.8 or 4807.15, the DC OP3 and Owner Agency will commence negotiations with the preferred proposer.
4808.4Engagement of Secondary Bidder: If negotiations with the preferred bidder fail to result in a P3 agreement after a reasonable period of time and good faith efforts by all parties as determined by the DC OP3 and Owner Agency, the DC OP3 and Owner Agency, in joint agreement, may terminate the negotiation with the Preferred Bidder and choose to begin negotiations with the secondary bidder or to terminate the solicitation.
4808.5Facilities Plan Approval: The DC OP3 and the Owner Agency have the right to review and approve the private partner's plans for the development, operation, maintenance, and financing of the P3 project facility before entering into a P3 agreement. Those plans, once approved, will become part of the P3 agreement. A material change in any of these aspects of the facility during the term of the agreement will require approval by the DC OP3 and the Owner Agency.
4808.6Prohibition Regarding Non-Compete Provisions: The P3 agreement may not contain a non-compete provision that would prevent or inhibit any public entity from performing its government function.
4808.7Access and Right to Inspect: During the term of the P3 agreement, the DC OP3 and Owner Agency shall have the right to access and inspect the P3 project facility at any time upon reasonable notice.
4808.8External Funding: The DC OP3, with the Owner Agency, may apply for and accept funds from the District or federal government, as well as other sources of financial support to fund P3 projects or otherwise advance the cause of innovative project delivery in the District.
4808.9Projects of Regional Scope: The DC OP3 and the Owner Agency may enter into P3 agreements with other local and state government agencies that are regional in scope as long as that regional aspect of the project is expressed in the request for proposal submitted to the Council pursuant to § 4803.3.
4808.10Sovereign Immunity: In no way shall a P3 agreement or any element of a P3 agreement be construed as a waiver of the sovereign immunity of the District government, nor will a P3 agreement be viewed as a grant of sovereign immunity to any private entity.
4808.11Remedies: A provision may be included in a P3 agreement providing that, in addition to any remedy available to the District, and any cure provisions within the agreement, in the event of a material default by the private partners, the District may elect to assume the responsibility and duties of the operator in the P3 project in partial or full capacity, and, in such instance, the District or a designated public entity shall succeed to all of the rights, titles, and interests in the P3 project.
The District Government may terminate, with cause, the P3 agreement and exercise any other rights and remedies that may be available to it under the law or in equity. If the District or a designated public entity elects to assume the responsibility and duties of a P3 project pursuant to this section, the District may develop or operate the P3 project, impose previously approved user fees, impose and collect lease payments and comply with any service contracts as if it were the operator.
The assumption of the operation of the P3 project shall not obligate the DC OP3 or the District government to pay any obligation of the operator from sources other than revenue from the project.
4808.12Compliance with Federal and District Laws: Under a P3 agreement, the private sector partner will be required to comply with all applicable federal and District laws governing infrastructure projects. Some of these applicable laws include, but are not limited to, the following:
(a) §§ 202 (Council contract review), 415 (anti-collusion), title VII (bonding) and title X (appeals) of the Procurement Practices Reform Act of 2010, effective April 8, 2011, (D.C. Law 18-371; D.C. Official Code §§ 2-351.01 et seq.); (b) The First Source Employment Agreement Act of 1984, effective June 29, 1984 (D.C. Law 5-93; D.C. Official Code §§ 2-219.01 et seq.); (c) The Living Wage Act of 2006, effective June 8, 2006 (D.C. Law 16-118; D.C. Official Code §§ 2-220.01 et seq.), or the rate established by the use of a project labor agreement, notice of which must be provided by the DC OP3 and Owner Agency before soliciting bids or proposals for a P3;(d) The Small, Local, and Disadvantaged Business Enterprise Development and Assistance Act of 2005, effective October 20, 2005 (D.C. Law 16-33; D.C. Official Code §§ 2-218.01 et seq.); (e) Subchapter II of Chapter 28 of Title 47 of the D.C. Official Code (Clean Hands Before Receiving a License or Permit);(f) The Green Building Act of 2006, effective March 8, 2007 (D.C. Law 16-234; D.C. Official Code §§ 6-1451.01 et seq.);(g) The Anacostia Waterfront Environmental Standards Act of 2008, effective March 26, 2008 (D.C. Law 17-138; D.C. Official Code §§ 2-1226.31 et seq.); (h) The Davis-Bacon Act of 1931, approved March 3, 1931 (46 Stat. 494; 40 U.S.C. §§ 3141 et seq.); (i) The Hotel Development Projects Labor Peace Agreement Act of 2002, effective April 2, 2003 (D.C. Law 14-266; D.C. Official Code § 32-851 ); and(j) The District Anti-Deficiency Act of 2002, effective April 4, 2003 (D.C. Law 14-285; D.C. Official Code §§ 47-355.01 et seq.).4808.13Repayment of Fees Paid by the Original Unsolicited Proposer: If a P3 agreement is entered into with a proposer who is not the original unsolicited proposer, the DC OP3 may require, as a condition of entering into the P3 agreement, that the "winning" proposer repay the preliminary evaluation and comprehensive evaluation fees as well as any stipend authorized under § 4804.11 to the original unsolicited proposer. The District will not pay, or provide for the payment of, any additional proposal costs of the original unsolicited bidder.
4808.14Monitoring of P3 Agreement Performance: The DC OP3 and Owner Agency will provide a performance monitoring plan for the agreement. The performance monitoring plan will provide detail on how the Owner Agency, with assistance from the DC OP3 as needed, will monitor the performance of the private entity for the full term of the agreement. This plan will include required skills and resources for monitoring, monitoring schedules, and performance schedules with possible performance-points systems.
D.C. Mun. Regs. r. 27-4808
Final Rulemaking published at 63 DCR 13119 (10/21/2016); amended by Final Rulemaking published at 65 DCR 6037 (6/1/2018)