Solution or Problem: PDAs, Exclusive Negotiation & Accelerated Contracting

Pre-development agreements (PDAs) have been commonly used in the transportation sector – typically, private developers are selected on a competitive basis to help develop project design or progress environmental permitting, followed by a right of first refusal to develop the project. Variations on the PDA approach include negotiating PDAs with more than one proposer before selection, followed by exclusive negotiations with the selected proposer to enter into the full development agreement, as was the case in the Purdue University Third Street North and Meredith South Student Housing transaction, or selection of a developer following an RFQ and RFP phase, followed by exclusive negotiations with the selected developer of the full development agreement, as was the case in the Denver International Airport’s Great Hall Project. Higher education owners are also increasingly using qualification-based selection, followed by exclusive negotiations, to procure and contract for campus and housing needs.

The rationales that drive a public owner to use PDAs or exclusive negotiations include a desire to leverage private sector innovation, expertise and resources earlier in the process to help develop a project to sufficient maturity so as to be bankable, as well as a desire to accelerate the project development, procurement and contracting process. This session will explore the perceived pros and cons of PDAs and exclusive negotiations to gain a deeper understanding of the actual trade-offs that can occur and the circumstances under which these approaches can used most effectively.

• To what extent can PDAs and similar methods of procurement:
  • Assist public authorities in choosing between and developing innovative solutions.
  • Create opportunities for collaboration with the private sector in undertaking the development process in a way that promotes innovation and problem solving.
  • Provide a vehicle for accelerating procurement and project delivery. 
• What types of projects would benefit most from these methods?
• How do the advantages of PDAs and similar types of procurement compare to the disadvantages—both as perceived and as actually experienced?
• How can public authorities balance the quest for innovation with prescribed procurement requirements?