Dive Brief:

• Accelerated Construction Services, LLC, and other unnamed companies, including developers and architects, are suing West Virginia University amid claims that the university is using public-private partnerships (P3s) to get around state bidding requirements for publicly funded projects, the Dominion Post reported. The project in question is the $70 million mixed-use development University Place, which was reportedly awarded to Turner Construction with no bidding.
• The suit claims the university is using P3s to take advantage of public entity benefits, such as not having to adhere to city zoning rules, pay taxes or submit to inspections. It claims the university also enjoys private industry benefits, such as not having to comply with state-mandated competitive-bidding rules and prevailing-wage statutes.
• The Accelerated Construction lawsuit refers to state code, which states that projects greater than $25,000 must be competitively bid, the Post reported. Accelerated Construction alleges that by not being able to bid on the project, it and the other plaintiffs lost millions of dollars because its bid would have been the lowest, although the company did not state what their bid would have been. The lawsuit also asks for an injunction to halt any construction not competitively bid.

Dive Insight:

This story is an interesting twist in the P3 narrative, as the project structure has been widely touted as the solution to government red tape and overspending on public projects, as a private company does the work and assumes most of the risk. If the lawsuit is successful, this could change the way public entities contract work.

However, according to the Dominion Post, the claims in this suit are similar to a 2014 lawsuit brought by builders involved in Accelerated Construction against Morgantown, WV, University Place developers, and now West Virginia University.

The Associated Builders and Contractors recently published a scorecard, which grades states on policies that create a supportive environment for construction, and P3 regulations were indicators of a high-performing state. According to the scorecard results, more than half of all U.S. states have enacted laws allowing P3s.

P3s are gaining in popularity in the U.S. but are currently more popular in countries like Canada, where government officials have hailed their budgetary benefits. However, Texas has seen some success with P3s, and the Texas Rangers are even considering a P3 for a proposed $200 million mixed-use development near the club’s ballpark.

In addition, Brendan Bechtel of the Bechtel Group recently wrote an op-ed piece in USA Today urging federal and state agencies to adopt P3s as a way of refurbishing the country’s aging infrastructure.

The university told the Dominion Post it had no comment, as it does not comment on pending litigation.