Notice on Policy on Management of Real Property - November 12, 2013

Date modified: 2013-11-12

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Policy Amendment Notice – 12/11/2013 – Requirements to screen investments for public-private partnership (P3) potential

The Policy on Management of Real Property has been amended, effective November 12 2013, to incorporate a requirement to screen large investments in infrastructure in order to assess if they are suitable for consideration of a public-private partnership (P3) delivery model. Departments are required to complete the screen in consultation with PPP Canada.

The requirement to screen large investments in infrastructure for P3 potential was established in Budget 2011, which stated:

"Going forward, federal departments will be required to evaluate the potential for using a P3 for large federal capital projects. All infrastructure projects creating an asset with a lifespan of at least 20 years, and having capital costs of $100 million or more, will be subjected to a P3 screen to determine whether a P3 may be a suitable procurement option. Should the assessment conclude that there is P3 potential, the procuring department will be required to develop a P3 proposal among possible procurement options.

Departments will also be encouraged to explore the potential of P3 approaches for other types of projects and procurements of services."

Please note the following specific changes to the Policy on Management of Real Property:

  • Section 4.1 is amended to change "Appendix A" to "the Appendix."
  • Section 6.1.4 is amended to include the following new requirements: "To ensure the effective consideration of all suitable options, including a public-private partnership (P3), all infrastructure investments creating an asset with a lifespan of at least 20 years, and having capital costs of $100 million or more, will be subjected to a P3 screen, in consultation with PPP Canada. Should the assessment conclude that there is P3 potential, departments will be required to develop a P3 option among possible options."
  • Section 6.1.4 is amended to change "Long Term Capital Plan" to "Investment Plan"
  • Section 8.7 is amended to change "Indian and Northern Affairs Canada" to "Aboriginal Affairs and Northern Development Canada"
  • A reference to PPP Canada is added to Section 8.11 as follows: "PPP Canada provides advice and expertise on the use of public-private partnerships, in accordance with its mandate established in its enabling Order-in-Council."
  • Section 9 is amended to add: "Guideline to Implementing Budget 2011 Direction on Public-Private Partnerships"
  • "Appendix A - Definitions" is changed to "Appendix – Definitions"
  • A new definition was added to Appendix – Definitions as follows:

    "Public-Private Partnership (partenariat public-privé)

    A long-term contractual relationship between a public authority and the private sector that involves:

    • The provision of capital assets and associated services to meet a defined output specification (i.e., defines what is required rather than how it is to be done);
    • The integration of multiple phases of the life cycle of an asset (e.g., design, build, maintain and/or operate) and related financing into a single agreement;
    • The allocation of risks between the public and private sectors;
    • Private sector capital at risk throughout the duration of the contract; and
    • A performance-based payment mechanism."

Note that the Policy on the Management of Projects and the Policy on Investment Planning – Assets and Acquired Services have also been amended to reflect the requirement for departments to screen large investments in infrastructure in order to assess if they are suitable for consideration of a public-private partnership (P3) delivery model as well as to report on the results of the screen as appropriate.

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