Public-Private Partnerships

The federal government, with a portfolio of nearly 435,000 buildings and half a billion acres, is one of the world's largest property owners. Most of the government's holdings are national parks, forests, and military facilities. In an era of budgetary constraints, federal agencies are increasingly interested in managing their buildings and facilities in a more businesslike manner. Many agencies have explored the formation of partnerships with the private sector. Known as public-private ventures, these arrangements typically involve contracts with private sector firms to renovate, build, operate, or manage facilities that provide services to the public. This report identifies the key elements of partnerships between the federal government and the private sector that were formed to help the government acquire and operate federal real estate and facilities more efficiently and effectively. GAO describes key elements and related experiences from six federal partnerships involving the following agencies: the National Park Service, the Department of Veterans Affairs, and the U.S. Postal Service.

GAO noted that: (1) there was a catalyst for change that led each of the three agencies to form a partnership with the private sector; (2) for example, community pressure and fiscal constraints were the catalyst in the two Park Service projects GAO reviewed, in which the Park Service decided to enter into public-private partnerships mainly to obtain partners that could finance needed preservation efforts; (3) for all six projects GAO reviewed, Congress enacted legislation that provided a statutory basis for the agency to enter into the partnership and keep the revenues it received from that partnership; (4) the agencies GAO reviewed also told GAO that they established organizational structures and acquired the necessary expertise to interact with private-sector partners to ensure effective partnership implementation; (5) for example, VA established an Office of Asset and Enterprise Development to promote the partnership concept within VA, design and implement public-private partnership projects, and be a single point of contact with VA's private-sector partners; (6) the office was staffed, VA officials said, with professionals experienced in portfolio management, architecture, civil engineering, and contracting; (7) in all six projects reviewed, asset management officials used business plans or similar documents to make informed decisions and protect the government's interests; (8) according to USPS officials, the development and execution of a business plan, which included information about the division of risks and responsibilities between USPS and its private-sector partner, was critical to its success in implementing its large-scale real estate development projects; (9) for each of the projects reviewed, business plans were drafted jointly between the public- and private-sector parties to help ensure close involvement of both parties in the design and implementation of the project; (10) support from project stakeholders was an important factor in developing and implementing the public-private partnerships; and (11) in all of the projects reviewed, agencies had the support of the local community and other stakeholders to create the partnership.