|In This Issue of PEG e-News...
U.S. Surgeon General to Serve as FEYA Keynote Speaker
On February 21, 2013, at the National Press Club in Washington, D.C., federal engineers from across the country will be recognized for their commitment, innovation, and value in service to our nation. This year we are honored to have Dr. Regina M. Benjamin, U.S. Surgeon General, serve as keynote speaker.
The Federal Engineer of the Year is selected by a panel of judges established by NSPE-PEG who consider engineering achievements, education, continuing education, professional/technical society activities, NSPE membership, awards, honors, and civic and humanitarian activities. Candidates are nominated by their employing federal agency. The agency must employ at least 50 engineers worldwide.
All agency winners will be honored at the FEYA luncheon at the National Press Club. The 2013 NSPE/PEG Federal Engineer of the Year is selected from the "Top 10" and announced the day of the event.
For more information on the Federal Engineer of the Year Award program, including how to purchase tickets to this year's event, visit the www.nspe.org/FEYA.
2013 PEGASUS Award
The Professional Engineers in Government is administering the annual PEGASUS Award program. The Professional Engineer in Government Achievement and Service in the United States Award recognizes the engineer who has made the most outstanding contribution to the advancement and practice of engineering. The PEGASUS Award will honor a licensed professional engineer employed by a state, regional, county, special district, or municipal government.
To apply for the PEGASUS Award, visit the PEG Web site.
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15 New Free PDHs Coming January 15
The new lineup for 15 free professional development hours will be available beginning January 15. See the complete list below.
Click here for more information on how to sign up. Don’t forget to click on the FAQ button at the bottom of the page for answers on how to "purchase" the PDHs.
2013's 15 Free PDHs
1. Conflicts of Interest: Will Proposed Federal Rules Impact Engineering Practice?
2. Engineering Ethics: What is the Impact of the Ongoing Economic Crisis on Engineering Ethics
3. EJCDC Construction Contract Documents: Key Clauses and New Approaches
4. Got BIM? It's Not Just About 3D Models
5. Harnessing the Power of Change
6. How to Conduct Effective Meetings
7. IT Solutions for AEC Professionals
8. Key Federal Contracting Laws that Everyone Must Know
9. Legal Realities of Project Scheduling
10. Ethics Forum: Maintaining Objectivity, Truthfulness, Non-Deception, & Preserving Confidentiality
11. Pending and Current Legislation, Rules, and Programs that Will Change How We Manage Storm Water
12. Project Management and Ethics
13. Ethics Forum: Protecting the Public Health, Safety, Welfare & Demonstrating Professional Competence
14. Strategic Planning
15. Ethics Forum: Whistleblowing: What Are the PEs Obligations to Report Misconduct?
In addition, the spring webinar series will begin mid-February. You can find more information on how to register for webinars on the NSPE Education Web site.
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PEG Management Study Fellowship Deadline Approaches
The Professional Engineers in Government's $2,500 Management Study Fellowship is now accepting applications. The fellowship is awarded to an engineer pursuing advanced studies in management. It is available to any engineer intern or licensed professional engineer from any discipline. Applicants who are not U.S. citizens may apply if they are current NSPE members.
To download an application, please visit the NSPE/PEG Web site.
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Privatization Offers Challenging Options for Fiscal Stress
Amid a still sluggish U.S. economy, states and local municipalities often find themselves wrestling with solutions or approaches to funding and operating new capital projects or infrastructural improvements, including wastewater treatment plants, drinking water systems, solid waste disposal facilities, correctional facilities, and medical complexes. To bridge the gap between the demand for public services and limited public sector resources, many government agencies are exploring how private sector investment can help in the operation of capital improvements.Although privatization is not a new concept, it is finding an increasing role in assisting cities and states to cope with fiscal stress—and at a time when public spending at all levels is coming under increasing scrutiny. By changing the incentives under which public enterprises operate, privatization can lead to important operational improvements as well.
Privatization is described simply as some form of private delivery of a facility or service that traditionally has been delivered—or at least managed in a delivery process—by the public sector. There are several approaches, however. First, privatization can mean contracting with a private firm for the operation of existing facilities, or secondly, it can refer to the development and operation of new facilities by a private firm, including the design, construction, and maintenance of the projects. Finally, privatization can also apply to the sale of existing public facilities to the private sector.
Globally recognized Deloitte Consulting describes several different ways to structure the private development of capital projects, depending on the number of parties and issues involved. They include the following:
Tax-Exempt Leveraged Leasing. Typically with this approach, a private company will build and own a facility, which it then leases to a private operator that, in turn, has a service contract with the public sector.
Tax-Exempt Lease Purchasing. With this arrangement, the public sector, while retaining title and not incurring long-term debt, acquires equipment or a facility under an installment purchase.
Turnkey Contracting. In this type of transaction, private companies design and construct the facility, which the public sector can then enter into a long-term contract for the services.
Sale/Leaseback with a Service Contract. Using this approach, the public sector builds a facility and then sells it to a private concern that operates it and enters into a long-term contract with the public sector to provide services. This approach can be effective, but it does have limitations.
Other transactions are also possible, Deloitte notes, ranging from simple leasing of a facility from the private sector to more creative revenue-sharing transactions involving split ownership and the sharing of responsibilities among the public and private sector interests.
The Reason Foundation, a Los Angeles-based organizational management think-tank, points out that even as far back as 1992, a White House executive order on privatization under President H. W. Bush offered state and local governments the option of selling or leasing any infrastructure enterprise that had previously received federal aid, as long as any depreciated value of the federal grants was paid back. That same executive order also directed relevant agencies—primarily the U.S. Environmental Protection Agency, the Federal Aviation Administration, and the Federal Highway Administration—to work with their grantees in removing obstacles, should they opt to pursue privatization.
In terms of operational efficiency, there are numerous potential benefits from privatizing infrastructure, including, but not limited to:
Of course, none of these potential benefits is guaranteed to occur in every case of infrastructure privatization, the think-tank points out, but there are strong economic incentives encouraging each of them. While the immediate motive may often be purely financial, states and municipalities could end up improving the quality of the infrastructure as a byproduct of addressing their fiscal problems, the Reason Foundation contends.
- Introduction of market pricing;
- Increased revenue opportunities;
- Cost savings and productivity gains;
- Private sector management expertise;
- Stimulated innovation and expanded use of new technology;
- Elimination of cumbersome and time-consuming procurement regulations; and
- Proper, continual maintenance of facilities instead of deferred maintenance.
Moreover, privatization has moved from traditional projects, such as highways and bridges, commercial airports, and water, wastewater, and sewerage treatment systems, to more profitable ventures like gas and electric utilities, turnpikes, parking structures, ports, and waste-to-energy plants. Most of these projects, if not all, are largely funded and operated through private investment and user fees in lieu of general taxpayer financing, preserving the tax base and saving public agency dollars for other services.
While the engineering interests of most state and local government agencies support privatization concepts, they also favor a balanced approach, one that assures efficient use of current engineering resources within the public sector before considering any extended privatization initiatives. Still, many public agencies are now considering privatization of facilities more frequently because user needs or demands are exceeding limited budgets, or because there has been a rise in taxpayer and ratepayer pressures to reduce costs of operations and management and improve efficiency and quality of service delivery.
Among the touted benefits of public facility privatization, there are inherent risks, though, for both the project owners and investors in accepting new challenges. Some notable risks are swapping financial security for debt, repair and replacement costs, buy-back provisions, regulatory requirements, payment of fines and penalties, price guarantees, inflation and taxes, and quantity and quality of end products.
Other considerations include who is ultimately responsible for performance and compliance with permits and laws, future growth or expansion, transfer of title, subcontracting of operational duties, service contract lengths, procurement methodology, and rate increases.
Each privatization project must be carefully reviewed to assure that no obstacles will block private initiative and to determine that it can be profitably owned and operated. This requires comprehensive financial forecasting; development of alternative transactions to determine which are best from a tax, finance, and procurement perspective; and an assessment of state and local statutes, regulations, and policies relating to taxes, contracting, user charges, and environmental considerations.
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2012–13 PEG Executive Board Contact Information
Kirankumar Topudurti, Ph.D., P.E.
Scott Wolf, P.E., PLS
David Alan Janover, P.E.
Northeastern Region Vice Chair
David N. Rackmales, P.E.
Southeastern Region Vice Chair
Bill Bowie, P.E.
Central Region Vice Chair
Dr. Scott Haraburda, P.E., Ph.D.
Southwest Region Vice Chair
Mark Dubbin, P.E.
Western & Pacific Region Vice Chair
Patrick M. Coullahan, P.E., PMP, CFM
North Central Region Vice Chair
Donald Neumann, P.E.
Young Engineer Representative
Josh Aldred, P.E.
Sandra Knight, P.E., F.NSPE, F.ASCE
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|PEG e-News Sponsorships...
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2013 FEYA Sponsor
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Participate in PEG today!
PEG has a variety of programs to become involved in. If you are interested in serving your fellow government engineer, visit the PEG Web site or email mailto:firstname.lastname@example.org.