Public–Private Partnership Project Performance Analysis Compared to Design-Build in Highway Projects

Abstract

While public-private partnership (PPP) is not an entirely new development in US procurement, the public and private sectors have adopted and applied it slowly, placing the United States behind the PPP global transportation market. Despite research efforts made in different aspects of the PPP delivery method, it is not yet clear whether the PPP delivery method can lead to better performance compared to the widely used design-build (DB) delivery method, particularly when applied to US highway projects. For this paper, the cost and schedule performance of 22 PPP and 122 DB highway projects were statistically compared to determine whether the performance of PPP highway projects was significantly better than DB highway projects. For comparison purposes, two scenarios were created based on the project’s completion date. The first included highway projects completed between 1995 and 2020 (22 PPPs and 122 DBs), and the second included all PPP projects and DB projects completed by 2007 (22 PPPs and 25 DBs). For the first scenario, the study shows that the mean construction intensity of PPP projects was significantly higher (about fivefold) than that of the DB projects ($1,300,000/day versus $267,000/day). This finding also applies to the second scenario; however, the difference was found to be reduced to threefold. In addition, the cost growth of PPP highway projects was significantly lower than DB highway projects in the second scenario (−0.04% versus 2.84%). Regarding schedule performance, no significant difference was found in either scenario. This study seeks to determine that the PPP delivery method fast tracks the design and construction of highway projects, as well as saves the overall project costs compared to the DB method. The main contribution of this study to the body of knowledge is that the PPP delivery method outperforms DB in terms of construction intensity and cost growth. This study will also assist US highway agencies and industry practitioners in better selecting an appropriate delivery method based on their key objectives and priorities for future projects.