Maryland county school board approves $1.2B school P3

Dive Brief:

Maryland's Prince George's County Public School system has entered into a $1.24 billion public-private partnership (P3) with its selected partner Prince George's County Education & Community Partners to design, build and maintain five middle schools and one K-8 school. The deal is expected to close on Jan. 19.
The P3 ownership group's members will be Fengate Asset Management and Gilbane Development Co., and Gilbane Building Co. will serve as the design-builder. Stantec is the lead designer for the project and Honeywell is set to provide maintenance and operations for 30 years.
The target completion date for four of the schools is no later than July 2024, and the two remaining schools are scheduled to be open for occupancy no later than Dec. 30, 2023. This is a time savings, according to the county, of 13 years. The school board also estimated that it will save $383 million in design-build and construction costs; $236 million in deferred maintenance; and $174 million in total payments, including financing costs.

Dive Insight:

PGCPS said that 40% of its buildings that were constructed 60 years ago need either total renovation or replacement. The price tag to modernize the system would be approximately $8.5 billion over 20 years, but PGCPS has only $210 million annually to spend on the initiative. This is the first system in the U.S., according to PGCPS, to fast-track construction of a group of modernized public K-12 school facilities through a P3 model.

In 2016, the state signed on to another P3 to build the $5.6 billion, 16-mile Purple Line light-rail system in Maryland's Washington, D.C., suburbs of Prince George's and Montgomery counties. The project was held up in court for almost a year because of local activists' lawsuits and further delayed by other construction and scheduling challenges that put the Fluor-led Purple Line Transit Partners about two years off the project's original timeline.

The state and PLTP also reportedly disagreed about who would cover the estimated $755 million in cost overruns. Ultimately, the construction joint venture brought on to build the project, Purple Line Transit Constructors (Fluor, Lane Construction Corp. and Traylor Bros.) notified the Maryland Transit Administration that it intended to pull out of the project because the lawsuits and other issues, like delayed right-of-way acquisitions, made its involvement in the Purple Line "unsustainable."

Not long after, PLTP also withdrew from the project, leaving state transportation officials to either find another company to take it on or manage it themselves.

As part of the school modernization award, the P3 must provide a package of community benefits such as workforce development, mentor-protégé and apprenticeship programs, minority and county contractor business set-asides and scholarships.

The group has already identified 10 contractors that meet the 30% minority business enterprise requirement, which translates to approximately $229.7 million worth of MBE contracts. The consortium must direct 20% of MBE contracts to county-based businesses.