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Privatizing Governmental Functions. - Product Image

Privatizing Governmental Functions.

  • ID: 2130349
  • January 2011
  • Region: United States
  • 400 Pages
  • ALM Media, LLC

How can a public employee workforce be transferred to a private enterprise? Can tax-free public financing still be used? Privatizing Governmental Functions is the first work to provide both a broad conceptual framework and detailed, practical guidance for handling any legal issue in the fast-growing field of privatization. This essential book from a team of leading experts is the single source to turn to for the legal and practical techniques involved, both generally and in specific industries.

You'll find thorough discussion and analysis of: the procurement process and its political setting; strategies for contractors; and financing issues. Individual chapters are devoted to such topics as correctional facilities, waste disposal, telecommunications, military support, public land and amenities, health care, schools, and surface transportation. Whether you are an attorney, contractor, government official, consultant, or scholar, this unique, comprehensive treatment will help you structure pragmatic solutions for virtually any situation.

Chapter 1
Overview
Patrick M. McGeehan

Chapter 2
How to Privatize: the Government Perspective
Phil Bomersheim
- 2.01 Introduction
- 2.02 Privatization Defined
- 2.03 Competitive Sourcing
- 2.04 A Process Guide to Competitive Sourcing
[1] Step One: The Competitive Environment
[2] Step Two: Competitive Sourcing Selection
[3] Step Three: Selecting the Competitive Framework
[4] Step Four: Evaluation and Contract Award
[5] Step Five: Monitoring
- 2.05 The Privatization Environment: Another Reason Competitive Sourcing
[1] The Political Champion
[2] Implementation Structure
[3] Reliable Cost Data
[4] Legislative and Resource Changes
[5] Strategies for Work Force Transition
[6] Monitoring and Oversight
- 2.06 Public/Private Partnerships
[1] Defining Goals
[2] Defining the Project
[3] Two Step Proposal Process
[4] Contract Negotiation
[5] Implementation
[6] Continuing Post-Implementation Review
- 2.07 Private Activity Bonds
- 2.08 Competitive Sourcing and the Federal Government: OMB Circular A-76
- 2.09 Stakeholders and Effective Communications
[1] Working with Legislative Groups
[2] Working with Government Agencies
[3] Working with Local Constituencies
- 2.10 Source Materials
[1] Office of Management and Budget Circular No. A-76
[2] Office of Management and Budget Circular No. A-76 Revised Supplemental Handbook
[3] The Commonwealth of Virginia Commonwealth Competition Council COMPETE Cost Analysis Program
[4] Overview of Governmental Accounting Standards Board Statement No. 34, Basic Financial Standards-and Management's Discussion and Analysis-for State and Local Governments
[5] Revenue Procedure 97-13

Chapter 3
The Contractor's Perspective on Privatization
William B. Bierce
- 3.01 Introduction
- 3.02 Differences Between Privatization and Outsourcing
[1] Privatization
[2] The Appeal of Outsourcing for Competitive Government
[3] Outsourcing
[4] Interplay of Privatization, Regulation, Outsourcing, and BOT/BOOT Concessions
- 3.03 Statutory Compliance
[1] Competitive Bidding Process
[2] Sunshine Act and Open Government
[3] Acquired Rights of Government Workers
- 3.04 The Political Process
[1] Uncertainty
[2] Delays
[3] Timing in Relation to Elections
[4] Costs
[5] Waste
[6] Hidden Agendas
[7] Accountability: Ongoing Governmental Review of Privatized Operations
- 3.05 Contracting and Procurement
[1] Contract Terms
[2] Enabling Legislation and Regulations
[3] Cancellation Compensation
[4] Due Diligence by Contractor's Attorney
[5] Competition in Contracting Act
- 3.06 Financing Privatization
[1] Tax-Exempt Financing
[2] Conventional Financing
- 3.07 Construction Issues
[1] Wage Rates
[2] Micro-Management Prerogatives
[3] Cost accounting
[4] Zoning and Building Codes
- 3.08 Insurance and Indemnity Issues
[1] Limited Authority to Insure or Indemnify
[2] Environmental Damage
[3] Valid Title
- 3.09 Reporting and Accounting
[1] Wage Rates
[2] Cost Accounting: Competitive Information
- 3.10 Other Federal Issues
[1] Freedom of Information Act
[2] Federal Activities Inventory Reform (FAIR) Act
[3] Price Benchmarking Under OMB Circular A-76
[4] State and Local Legislation on Competitive Government
[5] Inventions and Intellectual Property
[6] International Standards of Privatization
- 3.11 Potential Governmental Reacquisition After Privatization
[1] Restrictive Covenants in Enabling Legislation
[2] Public-Private Policy Conflicts Arising Out of Restrictive Covenants in Enabling Legislation
- 3.12 Contractor and Investor Strategies
[1] Contractors as Investors
[2] Ongoing Governmental Involvement Absent Complete Unfettered Spin-Off
[3] Ongoing Public Policy Interests
[4] Anticipating the Politicization of Cost-Cutting Processes
[5] Remedies for Investors in Case of Reacquisition
[6] Public Capital Markets
[7] Private Equity Markets
[8] Rationale of Applying Principles of Private Equity Finance
[9] Potential Remedies for Investor/Contractor
[10] Tax Policy
- 3.13 Conclusion
- 3.14 Source Materials
[1] "Public-Private Partnerships, Key Elements of Federal Building and Facility Partnerships," GAO/GSD-99-23 (United States General Accounting Office, Feb. 1999)
[2] "Public-Private Partnerships, Terms Related to Building and Facility, Partnerships," GAO/GGD-99-71 (United States General Accounting Office, Apr. 1999)

Chapter 4
Privatization: What Works and What Doesn't
James Dobbs
- 4.01 Hallmark of a Successful Project
[1] Keep To What You Know
[2] Know Your Customer
[3] Economics and Efficiency
[4] The Challenge of Procurement Systems
[5] Closing the Deal
[6] Try Try Again
- 4.02 Pitfalls and How to Avoid Them
[1] Why Isn't It Easier?
[2] Phantom Projects
[3] Structural Barriers
[4] Institutional Barriers
[5] Smoke and Mirrors
[6] Change in Law or Conditions
- 4.03 Conclusion

Chapter 5
Financial Restrictions in Privatization Projects
Mary Gassmann Reichert & Derek Rose
- 5.01 Introduction
- 5.02 Repayment of Federal Grants in Connection with Privatization
[1] Common Rule
[2] Executive Order 12803
[3] Water Resources Development Act of 1996
[4] Repayment Obligation Example
[5] Summary
- 5.03 Management Contracts and Privatization
[1] Pre-1997 Rules
[2] Current Rules
- 5.04 Conclusion

Chapter 6
Surface Transportation:"Tools" in the Privatization "Tool Box"
The Infrastucture Practice Group Nossaman, Guthner, Knox & Elliott, LLP
- 6.01 Background: Trends and Forces at Work in Surface Transportation
- 6.02 The "Unprivatized Norm"
- 6.03 Design-Build Contracts
[1] The "Tool" Defined
[2] Potential Benefits to Owners
[3] Statutory Obstacles
[4] Examples of Design-Build in Practice
- 6.04 Exclusive Development Agreements
[1] The Tool Defined
[2] Potential Benefits to Owners
[3] Statutory Obstacles
[4] Examples of the EDA in Practice
- 6.05 Long-Term Warranties
[1] The Tool Defined
[2] Potential Benefits to Owners
[3] Statutory Obstacles
[4] Examples of Long-Term Warranties in Practice
- 6.06 Outsourcing Preservation of Highways
[1] The Tool Defined
[2] Issues to Address
[3] Institutional and Statutory Obstacles
- 6.07 User Fee Financing
- 6.08 Local Option Revenue Sources
- 6.09 Federal Credit
[1] Introduction
[2] Types of TIFIA Assistance
[3] Application/Review Process
[4] Examples of TIFIA Projects

Chapter 7
Water and Waste Water Primerfor Public-Private Partnerships
David M. Lick
- 7.01 Introduction
- 7.02 Conditions in the Industry
- 7.03 Background
- 7.04 Laws and Regulations
[1] Prior Laws and Regulations
[2] Traditional Financing
[3] The Impact of Presidential Executive Orders
[4] 1997 Internal Revenue Code Changes
[5] EPA/OMB Regulations
- 7.05 Public-Private Partnerships-Available Alternatives
[1] Short-Term Service Contract
[2] Long-Term Service Contract
[3] Contract Operations with a Concession Fee
[4] Contract Operations with Design, Build and Finance Components
[5] Investor Owned Utilities
[6] Sale or Lease of Assets
- 7.06 Getting Started
[1] Motivational Factors
[2] Understanding a Public-Private Partnership
[3] Building Consensus
[4] Assess the Situation
[5] Engaging a Consultant
[6] Select a Strategy
- 7.07 The Selection Process
- 7.08 Contract Issues
[1] Risk Allocation
[2] Cost and Payment
[3] Performance
[4] Control
[5] Labor Issues
[6] Default and Cure or Termination
[7] Dispute Resolution Procedures
[8] Mediation
[9] Arbitration
[10] Dispute Review Boards
- 7.09 Conclusion
- 7.10 Source Materials
[1] Ownership and Ranking of Contract Operating Firms
[2] Water Privatization Scorecard
[3] Survey of North American Water/Wastewater DBO Projects
[4] List of Consultants

Chapter 8
PrivatiZation of Municipal Solid Waste Management Services
Constance Hornig, Esq.
- 8.01 Permutations of "Privatized" Municipal Solid Waste Services
[1] Laissez Faire
[2] Private Ownership, Public Service Contracts
[3] Public Ownership, Private Operating Agreements
- 8.02 Consolidation in the Waste Industry
[1] Assignment Consent
[2] Subcontractor Consent Rights
[3] Contractual Facility Designation-Specific Enforcement
[4] Related Party Transactions and Fair Market Value
[5] Cost Allocation
[6] Termination for Acquisition of a Vertically Integrated Businesses in a Local Waste Shed
- 8.03 Maintaining Municipal Ownership and Control Over Term
[1] Undesirability of "Evergreen" Terms
[2] Relationship of Term and Service Fees
[3] Implications of Term on Rate Adjustment Methodology
[4] Removing Capital Considerations from Term Through Public Owner-ship/Private Operation
[5] Termination for Convenience
- 8.04 Municipal Control over Fee Collection
[1] Customer Service Payments to Municipality
[2] Operating the Scale House
- 8.05 Constraints on Municipalities' Ability to Direct Flow of Waste
[1] Municipalities' Interests in Directing Waste
[2] The Interstate Commerce Clause's Limitations Controlling the Flow of Waste
[3] Contractual Designation Clauses
[4] Generator Fees
[5] Regulatory Intra-State Designation Clause
[6] Regulatory Mandatory Subscription and Self-Haul Designation
[7] Plaintiffs Raise Claims in Addition to Commerce Clause: Antitrust, Due Process, Takings, RICO, 1983
- 8.06 Competitive Procurement Advantages
[1] Lower Escalation
[2] Cheaper Termination-for-Convenience Buyout Prices; Service Asset Purchase Rights
[3] Tighter Default Provisions
[4] More Comprehensive Indemnification
[5] More Favorable Risk Allocation
[6] More Detailed Performance Standards; Liquidated Damages
- 8.07 Collection Agreements for Waste, Recyclable Materials and Yard Waste
[1] Combining waste, Recyclables and Yard Waste Collection
[2] Waste diversion commitments and incentives
[3] Specific Performance Standards
[4] Right to Use Service Assets; Repurchase Rights and Options
[5] Collection "Privatization": Substituting Private for Municipal Service
- 8.08 Materials Processing and Recovered Materials Marketing
[1] Combining Materials Processing with Waste, Recyclables or Yard Waste Collection
[2] Combining Materials Processing with Recovered Materials Marketing
[3] Recovery Guaranty
[4] Material Quality Guaranty
[5] Diversion Incentives
- 8.09 Transfer and Disposal of Waste and Processing Residue
[1] Environmental Indemnification and Facility Owner Creditworthiness
[2] Funding the Indemnity
[3] Closure and Post-Closure Financing
[4] Combining Design, Construction and Operation in Operating Agreements
[5] Performance Standards in Operating Agreements
[6] Sale of Public Facilities and Subsequent Service Agreements with Private Purchaser
- 8.10 Preserving Future Options: Reversion to Municipal Service
[1] Facilitate Future Financing
[2] Secure Equipment Acquisition Rights
[3] Secure Contractual Termination for Convenience Rights

Chapter 9
Mixed-Finance Development: Privatizing Public Housing Through Public/Private Development Partnerships
Megan Glasheen & Julie S. McGovern
- 9.01 Introduction
- 9.02 Origins of the Federal Public Housing Program
- 9.03 HOPE VI: A Program to Deal with the Nation's Most Distressed Public
- 9.04 Private Ownership of Public Housing: Mixed-Finance Is Born
- 9.05 Fundamentals of Mixed-Finance Transactions
[1] Governing Law and Regulations
[2] The Mixed-Finance Proposal
[3] The Mixed-Finance Evidentiaries
[4] HUD Review Process for Evidentiary Materials
[5] Identity of Interest General Contractors
- 9.06 Private Management
- 9.07 Public Housing Homeownership
[1] Pre-1998 Programs
[2] Post-1998 Programs
[3] Development and Review Process
- 9.08 Conclusion
- 9.09 Source Materials
[1] Mixed-Finance Amendment to Consolidated Annual Contributions Contract
[2] Sample Rental Mixed-Finance Evidentiary Submission
[3] Declaration of Trust
[4] Sample Table of Contents of a Regulatory and Operating Agreement
[5] Memorandum from Nelson A. Diaz, General Council, Housing and Urban Development, to Joseph Shuldiner, Assistant Secretary for Public and Indian Housing, Housing and Urban Development (April 8, 1994)(the "Diaz Opinion")
[6] Housing and Urban Development, Cost Control and Safe Harbor Standards for Rental Mixed-Finance Development (Feb. 23, 2000)

Chapter 10
The Privatization of Correctional Facilities
J. Michael Quinlan, Charles W. Thomas & Sherril A. Gautreaux
- 10.01 Introduction
- 10.02 The Basics of Privatization Theory
- 10.03 Growth in the Appeal of the Privatization Option
[1] The Initial Contract Awards
[2] The Transition to Maturity
[3] The Present Status of Correctional Privatization
- 10.04 The Procurement and Contracting Process
[1] Comprehensive Reviews of Statutory Limitations and Requirements
[2] Selecting the Most Appropriate Form of Procurement
[3] Some Critical Components of Procurement Documents and Contracts
- 10.05 Summary and Conclusions
- 10.06 Bibliography

Chapter 11
Privatization of Health Care Providers
Anne B. Camper, Robert N. Falk, & James D. Standish
- 11.01 Introduction
- 11.02 The Pressures on the Public Hospital
[1] Money-Losing Services
[2] Aggressive Competition
[3] Constraints Imposed by Public Sector Status
[4] Reasons to Retain Public Sector Status
- 11.03 Public Hospital Structures and Restructuring
[1] Range of Public Structures
[2] Reorganization Options
[3] Benefits of Private vs. Public Status
- 11.04 Strategic Considerations in Implementing Change
[1] Maintenance of Mission and Service Levels
[2] Past Liabilities/Assets
[3] Continued Public Responsibility
[4] Private Inurement and Conflicts of Interest
[5] Continued Public Authority
[6] Personnel Issues
[7] Limits on Care Imposed by Private Entities
- 11.05 Conclusion
- 11.06 Source Materials
[1] Publications
[2] Task Checklist for Restructuring
[3] Examples of Privatized or Restructured Public Hospitals

Chapter 12
Public Land and Amenities
Wayne M. Babovich
- 12.01 Introduction
- 12.02 Privatization of Discretionary Services
[1] Public Lands and Forests
[2] Museums, Libraries, and Cultural Resources
[3] Parks and Recreational Facilities
- 12.03 Authority for Privatization
- 12.04 Mechanisms for Privatization: Bid, Request for Proposals, or Professional Services Contract
- 12.05 Source Materials
[1] Getting Greens in the Black: Golf-course Privatization Trends and Practices
[2] Privatization: Lessons Learned by State and Local Governments

Chapter 13
Privatization of Public Education
Frank J. Fekete
- 13.01 Characteristics of Public Education
- 13.02 Public Education as a Fundamental Right
- 13.03 The Right Not to Attend Public School
- 13.04 Private Schools
- 13.05 Vouchers and Tax Credits: Public Funding of Private Schools
- 13.06 Charter Schools
- 13.07 Private Management of Public Schools
- 13.08 Contracting Out the Work of Public School Employees
- 13.09 Practical Considerations in Drafting Education Privatization Contracts and Documents

Chapter 14
Telecommunications
John H. Gibbon, Janet Alter & William R. Hanna
- 14.01 Introduction
- 14.02 The Telecommunications Revolution
- 14.03 Telecommunications in Government
[1] Government as a Consumer of Telecommunications Services
[2] Providing Telecommunications as a Function of Government
[3] Legal Issues Related to Governmentally Operated Cable Television and Broadband Systems
- 14.04 Privatization of Telecommunications: Public-Private Partnerships
[1] Parameters of Public-Private Partnerships in Telecommunications
[2] Case Studies
- 14.05 Summary

Chapter 15
Privatization of Military Support Services
Richard B. Nettler, Keith R. Styles & G. Brent Conner
- 15.01 Introduction
[1] Department of Defense Privatization Policies
[2] General Legal Framework
- 15.02 Housing
[1] Military Housing Privatization Initiative
[2] Competing Projects Under the Military Housing Privatization Initiative
[3] Practical Issues
[4] The Solution
- 15.03 Base Utilities
[1] Policy Issues
[2] Legal Framework
[3] Practical Issues
[4] Case Studies
- 15.04 Base Realignment and Closure (BRAC) as a Privatization Tool
- 15.05 Hospital and Health Care Services
- 15.06 Overseas Bases
- 15.07 Source Material
[1] OMB Scoring Protocol
[2] "Performance of Commercial Activities," OMB Circular A-76 (Aug. 4, 1983)

Chapter 16
International Privatizations
Charles Friedlander & Vera Rechsteiner
- 16.01 Introduction to International Privatization
[1] It's Different "Over There"
[2] Factors that Have Prompted International Privatizations
[3] Key Privatization Approaches Adopted by Host Governments
[4] The Participants' Respective Objectives
- 16.02 The Privatization Process
[1] Elements of the RFP
[2] "Firm" Bid versus Negotiation
[3] Due Diligence
- 16.03 Structuring the Privatization Transaction
[1] Direct Transfers of Assets and Sales of Shares
[2] Alternative Structural Options Using Long-Term Contracts
[3] Considerations Affecting "Upstream" Ownership Structuring
- 16.04 Checklist of Privatization Issues
[1] Have All Aspects of the Privatization Been Duly Authorized?
[2] Corporate Considerations Affecting How the Private Interests Are Held
[3] Restrictions on Transfers of Interests by the Private Participant
[4] Whether (and How) Economic Regulation Affects the Target Enterprise
[5] Host Country Tax Regime
[6] Facilitation Agreements with the Host Government
[7] Treatment of Certain Uncontrollable Risks ("Country Risks")
[8] Currency Control and Foreign Exchange Issues
[9] Governmental Permits and Approvals
[10] Customs
[11] Sufficiency of Infrastructure and Ancillary Support Services
[12] Employment Issues
[13] Intellectual Property Rights
[14] Dispute Resolution
[15] Enforcement of Judgments

Index

Deborah S Ballati



Deborah S. Ballati is a senior partner at the San Francisco law firm of Farella Braun & Martel LLP. Her practice covers a wide range of commercial litigation matters, with special concentration in construction law and insurance coverage. She is a Fellow of the American College of Construction Lawyers and has served as a member of the Governing Committee of the ABA Forum on the Construction Industry. She is currently the Chair of the Forum's Publications Committee.

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