1. The Oregon Approach to Innovation in Infrastructure

2. Oregon Needs Significant Investment
Infrastructure needs over the next 20 years:
$2.8 billion for drinking water
$3.8 billion for wastewater
$2.5 billion for schools
Address 135 high-hazard dams
Repair 433 structurally deficient bridges
Improve 1,341 functionally obsolete bridges
And More……
Portland metro area alone needs $20 billion more infrastructure investment than what we can accomplish using traditional financing and procurement

3. Einstein was right
Doing the same thing over and over again and expecting different results simply will not work.
Oregon must innovate to get more value for our infrastructure dollars if we are to preserve our quality of life and have a sound and resilient economy.

4. The West Coast Infrastructure Exchange
Strategies to Create Higher Value for Money and Attract Private Capital
Innovative procurement based on performance outcomes and highest life-cycle value
For some projects, forms of public-private partnership may offer higher value for public dollars
Transfer risks of design, construction, financing cost, and long-term performance to private partners
Use innovation and life-cycle design to reduce total cost of asset and increase value for dollars invested, improve climate change resiliency
Collaboration to establish a best- practices marketplace
The West Coast Infrastructure Exchange
Establish a functioning regional market for private capital investment in public infrastructure
A forum for best practices and inter-jurisdictional cooperation
Regionally-driven solutions in the absence of federal action

5. Improving Outcomes
Implement proven P3 procurement methods, including Performance-based, life-cycle procurement when the methods create a net public benefit
Invite private sector competition to achieve innovation and performance outcomes
Transfer risk for on-time, on-budget delivery and quality to the private providers
Assure performance by placing private capital at risk with penalties for non-performance
Stretch public dollars by leveraging private capital
Achieve higher value for money because projects are designed to reduce long-term costs, not just to achieve least cost of construction
Public sector owns infrastructure and enforces performance metrics

8. Procurement Models and Range of Risk Transfer to Private Sector
Source: US DOT-FHA

9. Drivers of Value for Money Differences

10. Chosen as Oregon’s strategic partner, provides services in Oregon through intergovernmental agreement with DAS
Established in 2002 as center of expertise for innovative procurement and finance. Operates as independent corporation, sole shareholder is Ministry of Finance
Serves governments and public sector agencies through the planning, delivery and oversight of major infrastructure projects
40+ projects to date: $17.5B+ in value with $7B+ private capital at risk
Projects have generated significant benefits for taxpayers:
Greater value for money
Reduced risk for taxpayers
Certainty of project cost and schedule—on time and on budget
Sectors include transportation, public buildings, energy, education, water
Uses several procurement methods depending on rigorous analysis to determine best structure for highest value for money for public owners (DB, DBM, DBFM, DBFOM)

11. Design Build Finance Maintain (DBFM) and similar methods are not privatization
Public owner transfers risk to private team that provides design, construction, some amount of financing, and long term maintenance through a single integrated contract for payments that are capped and scheduled for entire term of contract.
Payment deductions apply if performance requirements not met.
Encourages high quality, allows for highest teamwork and innovation in design and construction.
Partnerships BC results: 100% delivered before or on due date, no cost increases except for owner requests.
Overall Canadian Results from P3 methods
Overall 13% higher value for money
83% on time and 95% within 6 months of scheduled delivery

12. Surrey Pretrial Services Center Expansion
Examples of outcomes: -Lower Costs -Improved Performance -On time and on budget
Surrey Pretrial Services Center Expansion
216-bed renovation and expansion of high-security inmate facility
Provides maintenance for new and existing facility, to return entire facility in fully-maintained condition at end of life-cycle contract
$148 million in traditional procurement, $133 million cost in DBFM
Significant safety improvements because of private innovation
As almost all DBFM projects, delivered on time and on budget

13. Examples of Outcomes: - $131M in Additional Value through Innovation -Long term costs guaranteed
Sea-to-Sky Highway
$600 million improvement of Highway between Vancouver and Whistler Ski Area
Ministry could afford 60 km of passing lanes, 20 km of median barrier, and reflective markings for only most dangerous areas.
With DBFM innovation, project delivered 80 km of passing lanes, 36 km of median barrier, and reflective safety material for the entire length
Private innovation added $131 million in additional value.
Contract includes long term performance monitoring and penalties for failure to achieve requirements

14. Public Contracting Values Preserved
Projects are publicly owned. High-road contracting provisions such as prevailing wage apply because projects are public works.
Taxpayer risk is reduced through long-term performance contracts.
Higher value for money means we close the gap to achieve the infrastructure Oregon needs for a sound and resilient economy.

15. Current Activities West Coast Infrastructure Exchange
Collaboration among Oregon, Washington, California, and British Columbia
Best practices
Public Infrastructure Commission
Examining project-level innovation and
Fund-level innovation
Technical Assistance for major projects