Dive Brief:
- A strategy formerly used for student housing is being used for all types of facilities, public-private partnerships (P3) allow campuses to overhaul facilities in a matter of years instead of decades, as reported by The Chronicle of Higher Education.
- Most P3 agreements allow a private company to design, construct and own a building on campus property, and to lease it back to the institution. Many campus officials say this arrangement allows their institutions to save millions on needed new construction and facility upgrades and offers more flexibility for public institutions within state procurement guidelines.
- But some officials note that P3 expansion can cause logistical headaches and public relations issues with students and other stakeholders. Some campuses receive pushback from trustees and system leaders who are not confident in the length and scope of P3 deals. Other institutions like Appalachian State University, which has two P3 construction deals for athletic and residential projects in their early stages, have to communicate with stakeholders about how these deals are not privatization agreements with outside vendors.
Dive Insight:
P3 agreements will likely be the long-term strategy for many construction companies seeking to do business with large institutions who can guarantee the capital for projects. But these agreements have an element of "rich getting richer" to them, as small private institutions and public mission-based schools (historically black institutions and community colleges) likely will not have the leverage of stable enrollment to broker such deals.
Additionally, for institutions which make diverse vendor spending a part of their community outreach strategy, P3 deals could also present a challenge for writing specific agreements for companies to utilize minority vendors in design and construction. Supplier diversity continues to be a significant area of focus for higher education at large, to catch up to diversity work being done in classrooms and among faculty and staff hiring practices; but campuses looking to engage in more P3 partnerships will have to be more attuned to this area of business management in order to maintain good standing with vendors, watchdog groups, and campus stakeholders.