Florida Public-Private Partnership: Proposals, Selection, and Agreements

Florida public-private partnership requirements are set out in Section 255.065 of the Florida Statutes, which lets counties, municipalities, school districts, special districts, and other political subdivisions contract with a private company to design, build, finance, operate, or own qualifying public infrastructure. Before any procurement begins, the government side has to complete an independent analysis showing the partnership is cost-effective and serves the public interest. From there the parties follow either a competitive solicitation or an unsolicited-proposal path, and they close with a comprehensive agreement that must contain a specific set of provisions the statute won’t let you skip.¹

Who Can Be a Party

The statute uses the term “responsible public entity” (RPE) for the government side. An RPE can be a county, municipality, school district, special district, any other political subdivision of the state, a public body corporate and politic, or a regional entity that serves a public purpose and is authorized to develop or operate a qualifying project.¹

On the other side, a single private company or a consortium of private entities can be the partner. The private partner absorbs work that would otherwise sit with the government: construction, long-term operations, part of the financing, or some combination.

Projects That Qualify

The definition is deliberately broad. Qualifying projects include transportation facilities such as roads, bridges, ports, airports, rail, and mass transit, along with water treatment, wastewater, and surface water management facilities, public buildings, educational facilities, medical and nursing care facilities, recreational and cultural venues, and parking structures. Equipment upgrades to buildings used by a public entity or the public are also covered.¹

Two categories carry an extra step. For hospital or health care system facilities operated by a county, district, or municipal governing board, and for facilities run by a municipal electric utility, the governing board must specifically designate the project as a qualifying project before the P3 rules apply.¹

The Independent Analysis That Has to Come First

Before initiating procurement or awarding a contract, the RPE must perform an independent analysis demonstrating that the partnership is cost-effective and provides an overall public benefit.¹ The analysis has to show that the P3 structure delivers better value than traditional public procurement, and it needs to account for risk transfer, life-cycle costs, and delivery timeline.

The RPE must also confirm the project includes safeguards so the public isn’t stuck with extra costs or service gaps if the private entity defaults or the deal is canceled.¹ When design work is involved, the RPE has to have a licensed architect, landscape architect, or engineer prepare a design criteria package and keep that professional on through the completion of design and construction.

How the Private Partner Is Selected

The standard route is a two-phase competitive process. First, the RPE issues a Request for Qualifications to identify firms with the experience, technical ability, and financial capacity to deliver the project, then short-lists the strongest submissions.

Second, the RPE issues a Request for Proposals to the short-listed firms and asks for detailed technical and financial proposals. Evaluation runs against predetermined criteria for technical merit, financial viability, cost, and team qualifications. The RPE then negotiates with the top-ranked proposer to finalize the comprehensive agreement.¹

Parties can also enter an interim agreement before or during comprehensive-agreement negotiations. It lets the private entity begin compensated preliminary work like planning, design, environmental analysis, surveying, and financing exploration, and it sets the schedule for negotiating the final deal. An interim agreement does not commit the RPE to a final contract, and the parties may skip it and go straight to the comprehensive agreement.¹

Bringing an Unsolicited Proposal

A private entity can also bring a project to an RPE without waiting for a solicitation. The unsolicited proposal has to include a thorough description of the project, a financial plan, and cost estimates, and the RPE may charge an application fee to cover its evaluation costs.¹

The RPE then chooses one of two paths. Under the competitive-challenge path, the RPE publishes notice of the proposal and accepts competing proposals for at least 21 days but no more than 120 days, with the exact window set by the RPE based on the project’s complexity and public benefit.² Under the alternate path, the RPE holds two publicly noticed meetings where the proposal is presented and the public may comment, and at the second meeting the RPE must determine that the proposal serves the public interest before moving forward.¹

The 2021 Public Records Change

Anyone considering an unsolicited proposal needs to weigh a significant statutory change. The statute originally exempted unsolicited proposals from Florida’s public records laws until the RPE announced an intended decision. That exemption carried a sunset provision and stood repealed on October 2, 2021, after the Legislature did not reenact it.³ Proprietary information, trade secrets, and innovative project concepts submitted in an unsolicited proposal may now be subject to public records requests, and companies deciding whether to submit one need to account for that exposure.

What the Comprehensive Agreement Must Contain

Before the private entity can develop or operate the project, both sides must execute a comprehensive agreement. The statute mandates specific provisions, and leaving any of them out creates real legal risk.

Performance and payment bonds, letters of credit, or other security acceptable to the RPE, with construction components complying with the bonding requirements of Section 255.05.²
The RPE’s right to review the project design and inspect the private entity’s work throughout construction to confirm it meets the agreement’s standards.¹
A public liability insurance policy filed with the RPE, in an amount sufficient to cover tort liability to the public and employees and to keep the project operating. Self-insurance is allowed if the RPE approves the form and amount.²
RPE monitoring of the private entity’s maintenance practices.¹
Periodic financial statements from the private entity related to the project.¹
Termination and default procedures spelling out each party’s rights and responsibilities during construction and operation, and what happens if the agreement is terminated or the private entity materially defaults. The procedures must include conditions for the RPE or a project lender to assume the private entity’s duties and for the RPE to acquire the private entity’s property interests.²
Notice of default and cure rights, including provisions addressing unavoidable delays.¹

Handback Condition

The statute requires the agreement to provide for transfer of property interests at the end of the term but leaves the specific condition standards to the parties. Language like “satisfactory condition” invites disputes 30 or 40 years down the road. Better drafting specifies measurable condition standards, remaining useful life requirements, and an inspection timeline leading into the handback date. Where handback requirements are undefined, the general expectation is that the asset should be returned in comparable condition to a similar facility of the same age, with no immediate capital repairs needed by the RPE.

User Fees and Revenue Sharing

A comprehensive agreement can authorize the private entity to charge the public for using the facility. “Fees” are defined as charges imposed by the private entity for use of all or part of the project. They must be uniform for people using the facility under the same conditions and must not materially discourage use of the project.²

Fee revenue can supplement or replace service payments from the RPE. The statute also requires that a negotiated share of revenue from fee-generating uses be returned to the RPE over the life of the agreement.² Once the comprehensive agreement is executed, the fee structure within it is treated as conclusive evidence of compliance with the statute, which limits later challenges to fee levels.

Financing Limits

The private entity can arrange its own financing through private sources. Any liens on the property or facility must be paid off when ownership or operation transfers back to the RPE at the end of the agreement term.¹ The RPE can also lend its own funds to the private entity and may contribute capital or operating budget from any legally permissible source, including bond proceeds.

The statute encourages innovative financing techniques and references federal loan programs under Titles 23 and 49 of the Code of Federal Regulations, commercial bank loans, and inflation hedges. There are hard limits, though. A financing agreement cannot require the RPE to indemnify the lender, place liens on RPE property in violation of state law, or create a mortgage or security interest that could result in the RPE losing fee ownership of its property. Any such provision is void.¹

For transportation-related P3s, the federal Transportation Infrastructure Finance and Innovation Act (TIFIA) program offers loans, loan guarantees, and lines of credit. Eligible projects must have costs of at least $50 million, or $10 million for rural infrastructure projects. TIFIA financing can cover up to 49 percent of eligible project costs, and repayment can extend up to 35 years after substantial completion. The project’s senior debt obligations must carry an investment-grade credit rating, and the TIFIA loan must be supported at least in part by user charges or other dedicated non-federal revenue.⁴

Default, Termination, and Sovereign Immunity

If the private entity materially defaults, compensation otherwise due to it goes first to satisfy financial obligations to investors and lenders, as long as ordinary operating and maintenance costs are being covered. Revenue above those costs can be applied to lender and investor payment obligations.¹ The RPE can terminate the agreement with cause and pursue any remedies available under the contract.

Two protections stay with the public side. The RPE’s full faith and credit cannot be pledged to secure the private entity’s financing, and if the RPE takes over operation of the project after a default, it isn’t obligated to pay the private entity’s debts from sources other than project revenues unless the comprehensive agreement specifically says otherwise.¹

The statute also preserves sovereign immunity for the RPE, the local jurisdiction where the project is located, and their officers and employees. Participation in or approval of any part of a P3 project does not waive sovereign immunity, and that includes the project’s design, construction, and operation.¹

1
Online Sunshine. Florida Statutes 255.065 – Public-Private Partnerships
2
Florida Senate. Florida Statutes 255.065 – Public-Private Partnerships
3
Florida Senate. Florida Statutes 255.065 – Public-Private Partnerships
4
Federal Highway Administration. Transportation Infrastructure Finance and Innovation Act (TIFIA) Fact Sheet