Public-Private Partnership Policy Casebook/Prince George's County Schools Blueprint Program

This chapter was written by Patrick Morrison, Katy Nicholson and Iqbal Safi for Dr. Jonathan Gifford's Public-Private Partnership Policy class at the George Mason University Schar School of Policy and Government.

Introduction

Like others around the nation, Prince George’s County Public Schools (PGCPS), located in suburban Maryland, faces aging infrastructure and dire needs to return assets to a state of good repair. One of the nation's largest school districts, PGCPS’ over 200 school buildings were 50-60 years old, on average. This backlog totaled $8.5 billion; a total deemed insurmountable through traditional public funding. Consultants recommended a public-private partnership (P3) delivery model to improve school facilities.[1] For this project, a Design-Build-Finance-Maintain (DBFM) model was selected, transferring most risks to the private sector. Thus, PGCPS paved the way for the Alternative Construction Financing Program (also known as the Blueprint Program). The Maryland General Assembly passed legislation for the project in 2018 and 2019, with the Request for Proposals (RFP) opened in 2019.[2]

The development team, Prince George's County Education and Community Partners (PGCECP) selected in October 2020 started construction in June of 2021 and completed five of the contracted six new schools in July 2023. The development team selected for Phase I included Gilbane Building Company (Design-builder), Stantec (Architect and design), Honeywell (Services), and three local county minority-owned architect and construction businesses. Phase I’s first six schools were written into contract on the same balance sheet and with the same timeline expectations. According to initial projections, this bundling would save the government $175 and $400 million on design and construction costs.[2] As of October 2023, PGCPS has recently selected a new development team for Phase II, which will include eight more schools.[5] PGCPS' bundling of schools within the DBFM P3 delivery model is unprecedented in the United States.

Policy Narrative

Establishing Legislation and Support:

In 2018, PGCPS, Prince George’s County Government, County Council, and the County’s delegation of the Maryland General Assembly approved legislation to set the Alternative Construction Finance (ACF) program, a P3 model. Later that year, they established a working group from county stakeholders, and in 2019 passed additional legislation to support the ACF program.[2]

Financial Challenges:

PGCPS does not have the authority to issue bonds. And alone, they could not finance a project of this scale. The school district generally relies on the State of Maryland for assistance with school construction funding, but the traditional funding methods were not sufficient to address the school district's backlog of deferred maintenance. PGCPS and Prince George's County Council signed a memorandum of agreement in September 2020 that promises $15 million per year from the county government to the school district to help pay for Phase I of the P3.[3]

Under the Built to Learn Act of 2020, PGCPS is entitled to receive $25 million annually for 30 years for availability payments for Phase II of its P3 program. This state funding is distributed by the Interagency Commission on School Construction and is provided by bonds issues by the Maryland Stadium Authority.[10] The school district plans to use this state funding, along with PGCPS and county funding, to pay for Phase II.[4]

Risk Allocation:

The project's financial, operational, and construction risks are firmly on Gilbane and their equity partners. While the project's financial structure is expected to save costs compared to developing the buildings with public finance, PGCPS has little influence in the development phases, and can only defer payments if construction KPIs are not met.  

Unpaid and Misclassified Labor Lawsuits:

While five of Phase I’s six schools were completed on schedule, Gilbane reached a $78,000 settlement from unpaid and misclassified labor with one worker. The laborer also alleges that up to 40 other workers also did not receive payment and were misclassified, affecting taxes. The developer was not selected for Phase II for the project,[5] although they did submit a proposal.[6]

Sustainability:

As set out in the governing contract, the buildings meet the green building guidelines of Leadership in Energy and Environmental Design (LEED), including solar panels, smart sensors for energy efficiency, and other sustainable construction practices.

Contract Add-ons:

As tax dollars will ultimately fund this endeavor, PGCPS has included stipulations in its procurement documents and contracts to ensure that the P3 program serves the greater community:

• Disadvantaged Business Enterprises (DBE’s): 35% of contract dollars went towards DBE’s, surpassing the Phase I requirement of 30% of contract dollars awarded to DBEs. Approximately half of these DBE contract dollars were awarded to Prince George's County businesses.[2] Phase II will require that 40 percent of the labor is conducted by local companies.[5]
• Internships: The PGCECP is required to provide mentorships and internships to career and technical students throughout the 30-year contract.
• Minority Equity: Phase II requires the project company to include a Minority Business Enterprise as a 20 percent (minimum) equity partner.[4]
• Community Equity: Phase II also requires the project company to develop a program that allows county residents and businesses to invest 10 percent of the total equity in the project.[12]

Annotated List of Actors

Public:  

• Prince George’s County Board of Education: The governing body for PGCPS, which ultimately votes on the school district’s P3 policies and contracts. The school district owns the schools and the property on which they sit.
• Prince George’s County Schools Administration: School district staff that handles the administrative aspects of the program, e.g. issuing recommendations, developing RFQs, RFPs and contracts, communicating with contractors.
• Prince George’s County Council: The governing body for the county, which has encouraged the Board of Education to pursue the P3 delivery model and is helping to fund the project.
• P3 Alternative Financing School Infrastructure Work Group: Established by the County Council to investigate the public-private partnership option for school construction projects. Work group includes members of County Council and employees of PGCPS and County Executive’s office.
• Maryland General Assembly: The state legislative body, which has passed legislation in recent years to help facilitate the development of P3s in Maryland. This includes the 2020 Built to Learn Act, which earmarks $25 million per year for 30 years for Phase II of PGCPS's P3.
• Interagency Commission on School Construction: The agency that allocates Maryland state funding for the construction of schools. The 2020 Built to Learn Act authorizes the commission to provide PGCPS $25 million per year for 30 years for Phase II of its P3. The funding will be raised from bonds issued by the Maryland Stadium Authority specifically for school funding.[10]

Private:  

Project Companies/Special Purpose Vehicles:

• Phase I: Prince George County Education & Community Partners, LLC (PGCECP)
  • Fengate Asset Management (Development and Financing member – 75% equity partner)
  • Gilbane Development Company (Development and Financing Member – 25% equity partner)
  • Gilbane Building Company (Lead Design-Builder)
  • Stantec (Architect & Design Lead)
  • Honeywell (Lead Services Provider) [7]

• Phase II: PGC Education Collective
  • Plenary Americas US Holdings Inc. (Equity)
  • Ellis Don Capital Inc. (Equity)
  • Phoenix Infrastructure Group Investments LLC (Minority Business Enterprise Equity)
  • MCN Build Inc. (Lead Contractor)  
  • US Facilities Inc. (Lead Service Provider)  
  • Ellis Don Facilities Services (Lead Service Provider)
  • RSC Electrical & Mechanical (Lead Service Provider) [6]

Technical and Financial Advisors (Contractors for PGCPS):  

• Jones Lang LaSalle (Phases I and II – financial)
• K. Dixon Architecture, PLLC (Phase II – technical and financial)
• Kutak Rock, LLP (Phase II – legal)[8]
  

Community Stakeholders:

Prince George’s County Public Schools Students and Parents: The community, particularly current students and their parents, have been advocating for new schools due to the deterioration of the district’s older schools.

Timeline of Events

Spring 2018

Prince George’s County Council adopts a resolution forming a P3 Alternative Financing School Infrastructure Work Group to investigate the public-private partnership option for school construction projects. The Work Group includes members of County Council and employees of PGCPS and the County Executive’s office.

Spring 2019

Based on the Work Group’s recommendations, PGCPS issues Request for Qualifications: Public-Private Partnership for the Design, Construction, Financing, and Maintenance of Prince George’s County Public Schools Alternative Construction Financing Package 1.

Fall 2019

• The Board of Education passes a resolution approving PGCPS Chief Executive Officer’s recommendation to procure six schools as Alternative Construction Financing Package 1.
• PGCPS issues the RFP for Alternative Construction Financing Package 1 to four shortlisted project companies.[9]

Spring 2020

The Maryland General Assembly passes the Built to Learn Act of 2020. The Act includes $25 million annually for PGCPS to be used for availability payments for Phase II of its P3 program.[10]

Fall 2020

• All four project companies submit proposals in response to the RFP.
• PGCPS issues a recommendation that the school district enter into an agreement with Prince George's County Education and Community Partners LLC.  
• Prince George’s County Council adopts a resolution in support of the project.
• Prince George’s County Council and PGCPS enter a memorandum of understanding providing $15 million per year of county funding for the PGCPS P3.  
• The Board of Education passes a resolution approving PGCPS’ entry into an exclusive negotiating agreement with Prince George's County Education and Community Partners.

Winter 2020

PGCPS Board of Education enters an agreement with Prince George's County Education and Community Partners LLC for the design, construction, financing and maintenance of six schools.[9]

Spring 2021

PGCPS approves the advancement of schematic design documents to the “develop and refine” phase. Prince George's County Education and Community Partners LLC works with PGCPS staff to incorporate the school district’s desired changes to the plans.

Summer 2021

• The designs for the six schools undergo the Mandatory Referral process and ultimately are approved by the Prince George’s County Planning Board with the board’s recommendations.  
• PGCPS hands over the construction sites to Prince George’s County Education and Community Partners LLC; students from three of the six schools are relocated to accommodate construction.
• The school district holds groundbreaking ceremonies for each of the six Phase I schools.[11]

Fall 2021

• The County Council adopts a resolution encouraging the creation of a work group to study the potential Phase II Alternative Construction Financing Program, as well as a task force to help select the Phase II schools.
• PGCPS issues an RFQ, Public-Private Partnership for the Design, Construction, Financing and Maintenance of Prince George’s County Public Schools Blueprint Schools Phase II.

Fall 2022

The Board of Education approves the eight schools that have been recommended for Phase II of the Alternative Construction Financing Program.

Spring 2023

April 2023: PGCPS issues an RFP for Phase II with proposals due in July 2023.[12]

Summer 2023

Five of the six Phase I schools open.

Fall 2023

• After delaying its decision due to concerns about the labor requirements in the contract, the Board of Education votes to move forward with Phase II, selecting PGC Education Collective, a different concessionaire from the one that is handling Phase I.[13]
• Colin Powell K-8 Academy (the last school for Phase I) is slated to open in November 2023.

Risk Matrix

Risk type	Public	Private	Shared
Scope changes (owner requested)	X
Corrections of non-conforming work		X
Permits and Approvals		X
Design (errors & omissions)		X
Changes in educational specifications (service period)		X
Changes in law	X
Reforestation		X
Unknown land conditions			X
Removal of underground storage tanks	X
Site availability	X
Construction cost/schedule overruns		X
Labor disputes		X
Minority Business Enterprise/Community-Based Business Requirements		X
Quality assurance/control		X
Equipment warranties		X
Unavailability events/performance failures (maintenance phase)		X
Wear and tear (maintenance phase)		X
Vandalism (maintenance phase)	X
Financing (up-front)		X
Unused schools (e.g. Covid)			X
Force majeure	X

Contract Type

Alternative Construction Financing (ACF) or Public-Private Partnership

The PGCPS, in line with its 20-year Educational Facilities Master Plan, aims to ensure that it can adequately cater to the educational needs of its 134,000 students and a workforce of nearly 22,000 employees. Through the ACF program established in 2019, PGCPS, the County, and the Working Group share a common goal to employ a Design-Build-Finance-Maintain framework to efficiently deliver a predefined set of schools. This approach aims to achieve optimal cost-effectiveness and timely completion. Some of the primary objectives for these parties include the following:

• Accelerated Delivery and Schedule Risk Mitigation: PGCPS sought to expedite the construction and commissioning of a package of 6 schools within a maximum three-year period from the initiation of the P3 Agreement. The intention is to transfer schedule risk to the Developer, aligning payments with facility availability. This approach ensures timely delivery.
• Asset Stewardship and Life-Cycle Asset Management: Recognizing the critical importance of educational facilities, PGCPS is committed to maintaining the Facilities at specified standards throughout the P3 Agreement's lifespan. The developer will be held accountable for life-cycle asset maintenance, with potential deductions from availability payments for performance shortfalls. This strategy guarantees enforceable performance standards throughout the asset's life.
• Cost-Effectiveness and Budget Predictability: To safeguard taxpayer funds, PGCPS plans to maximize economies of scale by bundling multiple schools into a single package. This approach aims to capitalize on life-cycle cost efficiencies through innovative solutions and bundling design and construction with long-term operations. Furthermore, by securing life-cycle maintenance, PGCPS aims to offset budget volatility caused by emergency repairs due to deferred maintenance.
• Community Benefits and Control: PGCPS intends to leverage the Project not only for public education but also for the community. This involves linking the DBFM agreement to various community benefits, such as workforce development, mentor-protégé programs, apprenticeship initiatives, MBE/CBB (Minority Business Enterprise/Community Business Benefit) opportunities, and more. Additionally, PGCPS retains control over critical matters, including output standards, to ensure the overall success of the project.
  

DBFM (Design, Build, Finance, and Maintain)

Design and Construction Scope

The Developer has been responsible for designing and constructing the Project. The Developer's responsibilities encompassed standard design and construction tasks, including project management, engineering studies, project design, permits, development activities, finalizing design, construction, subcontracting, commissioning, testing, and so on.

Financing Scope

The Developer has had the exclusive responsibility of securing all the required funds for the Project, which involved equity. PGCPS has been flexible regarding the private financing structure proposed, as long as the financing has not held Prince George's County or PGCPS liable.  

Maintenance Scope

The Developer is responsible with overseeing significant maintenance of the Project, ensuring it complies with the Technical Requirements outlined in the Project Agreement, as well as adheres to relevant laws, regulations, and policies. This maintenance encompasses the long-term care of essential components built or installed by the Developer, as well as any other elements specified in the Project Agreement.

Local Contracting and the Use of MBE and CBB  

Prince George's County and PGCPS has been dedicated to establishing and upholding a world-class environment for local and minority business enterprises, ensuring equal access for qualified and certified businesses to engage in local procurement opportunities. Consequently, PGCPS expected the RFP to mandate that the Developer exert their best efforts to ensure that a minimum of thirty percent (30%) of the Project was carried out through subcontracts with certified MBE and CBB. While PGCPS didn't require Respondents to specify local and minority business enterprise subcontractors in their SOQ, these requirements were considered by Respondents in developing their organizational approach. This included various opportunities for CBB and MBE involvement, encompassing areas such as accounting and legal services, engineering, bonding, insurance, permit expediting, construction management, site work, including excavation and hauling, concrete work, foundations, welding, electrical, plumbing, window and door installation, drywall, painting, carpeting, tiling, interior design, asphalt, landscaping, property and program management, signage, marketing, maintenance, and cleaning. It's worth noting that PGCPS did not anticipate MBE and CBB to be bound by exclusivity arrangements with individual Respondents.

Procurement Process

Part One: RFQ

Contents of Response to RFQ

Volume 1: Experience & Capabilities

• Part 1 – General Information
• Part 2 – Organization and Management
• Part 3 – Technical Experience and Capabilities
• Part 4 – Financial Capabilities and Experience

Volume 2: Financial Information

Evaluation Criteria:  

Organizational Competence:

PGCPS evaluated respondents organization and management capacity based on their ability to coordinate and deliver all Project components, considering size and complexity. Higher scores were given for clear and logical management structures, alignment of interests among Major Participants, and demonstrated teamwork on similar projects. The suitability of the Offeror's organization structure was assessed regarding team structure, prior experience working together, key personnel, and experience with MBE and local businesses/community benefits. Factors included roles and responsibilities, decision-making efficiency, risk management, and realistic approaches to project challenges and opportunities.

Technical Approach:

The evaluation of technical proposals for the Project has been completed, assessing Respondents based on a range of criteria. In the "Design-Build Capabilities and Expertise" category (25 points), the evaluation considered the Respondent's experience in comparable projects, design excellence, construction, and related factors. For "Maintenance Capabilities and Expertise" (20 points), the assessment examined their experience in maintaining similar projects and expertise in areas such as life-cycle maintenance and customer service. In "Project Understanding and Technical Approach" (10 points), the evaluation determined how well the Respondent's approach aligned with PGCPS goals. Lastly, "Financial Qualifications and Capability" (30 points) gauged the Respondent's financial capacity to secure financing without contingencies and maintain the Facilities throughout the agreement term. This process provided a comprehensive evaluation of Respondents' capabilities in delivering the Project.

Financial Capacity:

The evaluation of Respondents' financial capabilities for the Project was completed, focusing on their ability to secure financing without contingencies and maintain facilities. PGCPS assessed each respondent's financial qualifications based on specific criteria. This included evaluating Financing Members' experience in obtaining financing commitments for similar projects, their success in bringing projects to completion, and the overall financial strength of the Respondent team. Factors like Funding Letters and the expertise of the Respondent's Financial Advisor in securing non-recourse financing were considered. Projects involving controlling ownership interest, financial close, DBFM structure, and performance-based payments scored higher. The overall financial capability of the Respondent was assessed based on financial statements, credit ratings, bankruptcy/insolvency information, and other financial details provided in the SOQ.

Part Two: RFP

As a result of the RFQ evaluation, below respondents advanced to the RFP stage and were permitted to submit a proposal:

1. Community Academic Partners

1. Edgemoor-Star-HB Education Partners

1. Preston Hallow Capital / Provident Resource Group / SB Ballard Construction / Hess Construction / Aramark

1. Prince George’s County Education and Community Partners  

Evaluation Procedure:

In the evaluation process, there was a two-phase approach. Initially, PGCPS assessed Proposals to determine their responsiveness based on the evaluation factors outlined in the RFP. After this initial review, all responsive Proposals underwent further evaluation as detailed as follows:

The evaluation criteria for the P3 project proposal reflects a comprehensive approach that balances technical and financial aspects. The division of points allows for a fair and thorough assessment. The Technical Proposal, worth 300 points, is structured into six sections, covering various crucial aspects of the project. The emphasis on organization, local community benefits, design, construction, and services approach demonstrates a holistic evaluation of the bidder's capabilities and commitment to the project's success.

In the Financial Proposal, the split between the Cost Score (200 points) and the Finance Plan Score (100 points) ensures that cost-efficiency is a significant factor while also considering the financial sustainability and planning of the project.

This criteria setup promotes a competitive yet balanced evaluation process. It encourages bidders to not only offer competitive financial terms but also emphasize a well-thought-out project management, local community benefits, design excellence, and construction efficiency. Overall, the criteria seem well-structured to select a bidder that not only meets the financial expectations but also aligns with the broader project goals, including local community engagement and technical excellence.

According to the Board Action Summary of the PGCPS for Approval of Contract Award the evaluation process for the RFP was thorough and transparent, prioritizing fairness and independence. It involved various committees and subcommittees, each comprising experts in specific fields, such as project management, design, construction, financial advisory, and more. The Technical Proposal was assessed based on five major criteria, while the Financial Proposal underwent a separate evaluation by the Financial Advisory Team. Importantly, these evaluations occurred independently to ensure no influence between the technical and financial assessments. The process strictly adhered to predefined criteria and procedures outlined in the RFP and Evaluation Manual. This dual-phase, segregated evaluation approach aimed to maintain fairness and prevent bias, ultimately resulting in a comprehensive assessment of both technical and financial aspects of the proposals.

PGCPS’s General Obligations:

Under this agreement, PGCPS has several key responsibilities. They are obligated to make payments to the Developer as specified in the agreement, provided the Developer meets the necessary payment requirements. PGCPS is also responsible for providing the Sites required for the Project. It's important to note that PGCPS holds full ownership of the Land. Furthermore, PGCPS has the sole authority to make decisions regarding the operation and use of the Schools, ensuring they align with the terms of the Agreement.

The contract relies on availability payments and the agreement defines “Availability Payments” as follows:

Availability Payment means the fee to be paid by PGCPS to Developer, which together with any applicable Progress Payment, Milestone Payments, Relief Payments or Delay Payments, compensate Developer for Developer’s performance of the Design-Build Work and Services, as set forth and calculated in accordance with Section 14.4 (Availability Payments) and Exhibit X-1 (Payment Calculations).[9]

Cost

The total cost of Phase I for PGCPS will be $1.24 billion, which includes a $15 million milestone payment (to be paid when the design/construction phase was 50 percent complete), progress payments of $5 million per school due when each school is completed, and availability payments paid monthly during the 30-year service period. The total amount that PGCPS pays is subject to change due to delay or relief payments based on the KPIs written into the contract.[7]

For Phase I, PGCPS will share the project costs with Prince George's County government, which will provide $15 million per year.[3] PGCECP's Phase I costs were estimated to be $485.8 million during the design/construction period and $306.5 million during the services period.[7] Fengate (75-percent equity partner for Phase I) is funding its portion of the project using its Core Infrastructure Fund III [15], which focuses on U.S./Canada alternative energy, social, transportation, and digital contracted projects with a net IRR between 11 percent and 13 percent and a minimum yield of 5 percent.[16]

PGCPS estimates that using the traditional financing model, design/construction of the Phase I schools would have cost a total of $868.8 million and and taken 16 years. The total design/construction cost using the P3 model was $485.8 million. The school district also emphasizes the value of the service plan, which it anticipates will prevent deferred maintenance costs later on. Additionally, building the schools more quickly has resulted in cost savings as PGCPS has not needed to maintain the old school buildings any longer. PGCPS has estimated that it will save a total of $170 million during the 30-year contract.[2]

For Phase II, PGCPS plans to pay the project company $11.25 million per school upon the completion of each school, followed by availability payments for the following 30-year service period.[12] PGCPS anticipates covering its Phase II first-year availability payment with $25 million in state funding (courtesy of Maryland Stadium Authority bonds provided by the 2020 Built to Learn Act), $10 million from Prince George's County government, and $15 million of its own funds, for a total of $50 million.[14]

Financial Structure

The Program follows an availability payment model where the District and the County dedicate funding to support the 30-year life cycle of the program as opposed to a revenue risk model where funding would depend on revenue generated by end-user payments for use of the building like rent, retail, etc.

In this arrangement between PGCPS and the developer, the public and private sectors share responsibilities and benefits. The developer, as the private entity, has invested significantly in the construction of six schools, amounting to approximately $500 million. Over the next 30 years, they will be responsible for maintaining the schools as well and in exchange will receive about $290 million in service payments. This investment is aimed at providing quality educational facilities to the community. The private contractor stands to profit from this partnership through the availability payments they receive, which are set to increase over time. The private sector benefits from a steady and predictable income stream, while PGCPS benefits from having the infrastructure developed and maintained without shouldering the entire financial burden upfront. It's a collaborative approach that allows the public sector to provide essential services while mitigating financial risk and provides the private sector with a revenue-generating opportunity over an extended period.

Institutional Structure

The institutional structure of the Public-Private Partnership (P3) project for school construction and maintenance in Prince George's County is a complex web of stakeholders, each playing a crucial role in ensuring the success of the endeavor. At the core of this partnership is the Public Partner, Prince George’s County Public Schools (PGCPS), which owns the schools and the property they are built on. PGCPS is joined by the Private Partner, PGCECP, a consortium comprised of Fengate Asset Management (financial/equity), Gilbane Development Company (financial/equity), Gilbane Building Company (lead design-builder), Stantec (lead architect-design), and Honeywell (lead service provider). This SPV, operating under the DBFM P3 Agreement, is the entity responsible for the design, construction, financing, and maintenance of the schools.

Regulatory Authorities, such as the Prince George's County Board of Education and County Council, provide the necessary approvals and support for the P3 model, ultimately shaping the project's policies and contracts. Additionally, the Schools Administration handles the administrative aspects of the program. The P3 Alternative Financing School Infrastructure Work Group, established by the County Council, plays a pivotal role in exploring the P3 option.

Furthermore, Technical and Financial Advisors, contractors for PGCPS, including Jones Lang LaSalle, K. Dixon Architecture, and Kutak Rock, provide critical expertise in financial, technical, and legal aspects. Finally, the community, represented by Prince George's County Public Schools Students and Parents, advocates for new schools due to the deteriorating condition of the district's older schools.

This multi-faceted institutional structure is designed to maximize the efficiency and effectiveness of the P3 project, ensuring that it meets the educational and infrastructural needs of the community while also managing the financial and operational aspects with private sector expertise.

Lessons Learned/Takeaways

Public sector agencies without upfront funding or the capacity to issue bonds can still complete P3 projects and solicit competitive bids from the private sector, if the governing authorities can coordinate on the presiding statues and desired project outcomes. While PGCPS was in the process of procuring Phase I and securing county funding for the project, the Maryland General Assembly passed legislation to provide substantial funding for Phase II using Maryland Stadium Authority bond funding. This policy solution provides a special financing solution to public actors seeking P3s with limited assets on their balance sheet or a constrained capacity to issue bonds themselves.

When briefing the County Council on Phase I in September 2020, PGCPS staff noted the importance of a strong contract to ensure that the school's objectives were met. Based on its lessons learned from Phase I, PGCPS was able to craft a Phase II contract that is more likely to bring about its desired results. For example, labor issues surfaced during Phase I, and PGCPS ended up including a labor agreement in its Phase II contract. Because the P3 model affords the private sector more autonomy than traditional delivery models, an airtight contract is essential.

One of the ongoing concerns about PGCPS’ P3 project is transparency. During the September 2020 County Council briefing, several Council members expressed their concern about the ambiguity of the information they had received. In our research, we encountered numbers and figures that sometimes seemed contradictory, and we struggled to identify the source of public funding for the payments to the developer. This may be due to the large number of entities involved and the fact that the project has proceeded in fits and starts. The scope of the project changed during the planning stages, and state legislation has been evolving throughout the process. Local and regional media have covered the project at the surface level, but they have not delved into the details.

Public-private partnerships can be a solution for communities that do not have the up-front funding to provide much-needed infrastructure. In this case, the P3 model undoubtedly delivered six schools in a fraction of the time it would have taken using the standard delivery model, thanks to the design/construction bundling and the private sector financing. However, the P3 model does not negate the need for public funding; it is important to remember that PGCPS and Prince George's County will continue to pay for the project for the next 30 years. The school district will continue to finance other schools using the traditional delivery model while it engages in these P3 projects, so it will have ample opportunities to compare the different approaches and analyze the value-for-money. Because this type of project is unprecedented in the United States, PGCPS will serve as a test case for the many other communities grappling with a backlog of aging schools and a lack of public funding.

Phase I and Phase II Schools

Phase I Schools:

School	City/Town	Completion Date
Sonia Sotomayor Middle School at Adelphi	Adelphi	Summer 2023
Drew-Freeman Middle School	District Heights	Summer 2023
Hyattsville Middle School	Hyattsville	Summer 2023
Kenmoor Middle School	Landover	Summer 2023
Walker Mill Middle School	Capitol Heights	Summer 2023
Colin L. Powell K-8 Academy	Fort Washington	November 2023 (scheduled)

Phase II Schools:

School	City/Town	Completion Date
Margaret Brent Elementary School	New Carrollton	July 2026 (scheduled)
Templeton Elementary School	Riverdale Park	July 2026 (scheduled)
Brandywine Area K-8 School	Brandywine	July 15, 2027 (scheduled)
Fairwood Elementary School	Bowie	July 15, 2027 (scheduled)
James E. Duckworth Elementary School	Beltsville	July 15, 2027 (scheduled)
Robert Frost Area K-8 School	New Carrollton	July 15, 2027 (scheduled)
Hyattsville Elementary School	Hyattsville	July 15, 2028 (scheduled)
Springhill Lake Elementary School	Greenbelt	July 15, 2028 (scheduled)

Discussion Questions

• From the perspective of Prince George’s County, has Phase I been successful so far?
• What should PGCPS and PGCC look for in the vendor selection for Phase II?
• What are some of the potential pros and cons of PGCPS’ decision to engage in this innovative form of school construction financing?
• Do you think the P3 delivery model is appropriate for school construction?

References

1. Smith, Carl. “Prince George’s County Saves Big by Bundling School Construction.” Governing. September 12, 2023. https://www.governing.com/finance/prince-georges-county-saves-big-by-bundling-school-construction#:~:text=But%20PGCPS%20decided%20to%20do,and%20one%20K-8%20facility

2. PGCPS. “News Release: First-of-Its-Kind Public-Private Partnership Delivers New Schools for 8K+ Students.” September 18, 2023. https://www.pgcps.org/offices/communications-and-community-engagement/newsroom/news/newsroom-archives/2023-2024/news-release-first-of-its-kind-public-private-partnership-delivers-new-schools-for-8k-students

3. Prince George’s County. “Memorandum of Understanding With Respect to the Public-Private Partnership for the Design, Construction, Financing, and Maintenance of Prince George’s County Public Schools Alternative Construction Financing Package 1.” September 23, 2020. https://princegeorgescountymd.legistar.com/LegislationDetail.aspx?ID=4657905&GUID=8E927F21-8501-4234-A4D1-6B4EFC5F8F67&Options=&Search=

4. PGCPS Board Item. “Approval of the Blueprint School Phase II Package and Resolution of General Terms for Blueprint Schools Phase II Package (Alternative School Construction Financing Package II) under a Public-Private Partnership Model.” September 22, 2022. https://go.boarddocs.com/mabe/pgcps/Board.nsf/Public#

5. Asbury, Nicole. “Pr. George’s school board approves next phase of public-private partnership for new buildings.” The Washington Post. September 30, 2023. https://www.washingtonpost.com/education/2023/09/30/p3-prince-georges-school-construction-partnership/

6. JLL News Release: Prince George’s County Schools Names Blueprint Schools Phase II Shortlist of Proposers. March 13, 2023. https://www.us.jll.com/en/newsroom/pgcps-names-blueprint-schools-phase-ii-shortlist

7. PGCPS. PGCPS Alternative School Construction Financing Briefing. Presented at October 13, 2020 County Council Meeting. https://princegeorgescountymd.legistar.com/LegislationDetail.aspx?ID=4667489&GUID=07FADC24-3D2F-4213-BEE0-3AC2B4898D00&Options=&Search=

8. PGCPS Procurement Opportunities: Awards. https://offices.pgcps.org/purchasing/awards.aspx

9. Project Agreement for the Design, Build, Finance, and Maintenance of Prince George’s County Public Schools Alternative Construction Financing Package 1 by and Between the Board of Education of Prince George’s County and Prince George’s County Education & Community Partners, LLC. December 2020. https://pgccouncil.us/DocumentCenter/View/6172/Project-Agreement?bidId=

10. Maryland Stadium Authority Built to Learn Revenue Bonds Series 2022A. Official Statement Dated. February 23, 2022. https://emma.msrb.org/P21552069-P21199299-P21618902.pdf

11. PGCPS. Blueprint Schools Program Quarterly Report #2. July 2021. https://www.pgcps.org/globalassets/featured-pages/blueprint/docs---blueprint/quarterly-reports/2021-quarter-2-report_july-2021.pdf

12. PGCPS Request for Proposals: Public-Private-Partnership for the Design, Construction, Financing, and Maintenance of Prince George’s County Public Schools Blueprint Schools Phase 2. April 28, 2023. https://offices.pgcps.org/uploadedFiles/Cards/capital_programs/procurement/Bids/PGCPS%20Blueprint%20Schools%20Phase%202%20RFP%20DCP001-23-RFP.pdf

13. Domen, John. “After fiery Meeting, Prince George’s Co. Board Moves Forward With School Construction Plans.” WTOP. October 3, 2023. https://wtop.com/prince-georges-county/2023/10/pgc-school-board-listens-to-parents-and-will-build-the-beep-schools/

14. PGCPS. Blueprint Schools Phase II Project Update. October 2022. https://www.pgcps.org/globalassets/featured-pages/blueprint/docs---blueprint/blueprint-schools-phase-ii-public-memorandum---final.pdf

15. Fengate. "Commercial and Financial Close Reached for Prince George’s County Public Schools Alternative Construction Financing Project." January 11, 2021. https://fengate.com/news/commercial-and-financial-close-reached-for-prince-georges-county-public-schools-alternative-construction-financing-project/

16. Fengate. Infrastructure Insight: Core+ Funds. https://fengate.com/infrastructure-insight/