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Module 24 STEPS 17, 18, & 19 Project Implementation

This module provides an overview of the Project Partnership Agreement (PPA) in civil works projects, including its purpose, development, components, review process, Congressional appropriations, and approval and execution processes.

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Module 24 STEPS 17, 18, & 19 Project Implementation

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  1. Module 24STEPS 17, 18, & 19 Project Implementation Civil Works Orientation Course - FY 11

  2. OBJECTIVES • This module will provide an overview of: • The purpose of the PPA • Guidance on PPA development • Components of the PPA package • PPA review process • Congressional Appropriations • PPA Approval and Execution

  3. STEP 17Project PartnershipAgreement (PPA) Draft and Approval

  4. What is a PPA ? • Legally binding document (contract) • Executed between Corps & Non-Federal Sponsor(s) • Establishes terms of funding, construction, and OMRR&R of the project

  5. Brief History of PPA’s • Prior to 1970 - Letter of Assurance • Flood Control Act 1970 - Section 221 Agreement • Supplemental Appropriation Act 1985: • Local Cooperation Agreement (LCA) process • Required cost sharing (but not defined) • Required financing plan • WRDA 1986 - Further defined project cost sharing • Model Project Cooperation Agreements (PCA) developed by task forces

  6. PPA Evolution • Letter of Assurance • Section 221 Agreement • Local Cooperation Agreement • Project Cooperation Agreement...now to Project Partnership Agreement (WRDA 2007 Section 2003)

  7. PPA Guidance - Specifically Authorized Projects • ER 1165-2-131, Project Cooperation Agreement for New Start Construction (WRDA 2007 will require changes) • Series of Policy Guidance Letters • Annual Program Budget EC for CW Action • EC 1165-2-206, Delegation of Review, Approval, and Signature Authority for Project Cooperation Agreements for Specifically Authorized Projects

  8. PPA Guidance - Specifically Authorized Projects • CONSTRUCTION COST SHARING: • Flood Risk Management – varies from • 50/50 to 65/35 • Ecosystem Restoration – usually 65/35 • Inland Navigation - 50/50 (Inland Waterways Trust Fund) • Deep Draft Navigation - proportional to depth of construction: Non-Federal share is 10% to Depths of 20 feet; 25% between 20 and 45 feet; and 50% over 45 feet. • Recreation - 50/50

  9. PPA Required For: • New Start: - Construction Project - Separable Element • Deficiency Correction • Reconstruction Projects

  10. PPA ModificationsNot Required: • Changes during construction for technical or cost reasons • Modifications due to Section 902 issue • Change in method of Non-Federal Payment • Recreation facilities added at full Non-Federal expense

  11. Development of PPA • Sponsor requirements discussed in Feasibility Phase • Model provided to sponsor • Tailor PPA for unique project aspects • Floodplain Management Plan now a legal requirement (WRDA 99) • Actual negotiation during PED

  12. PPA Package • Draft PPA • Certificate of Authority • Lobbying Certificate • Unsigned Disclosure Form • List of PPA Deviations and Reasons • Signed Certificate of Legal Review • Federal/non-Federal Allocation Table

  13. PPA Package (cont.) • Non-Federal Financial Analysis: • Financial Plan • Sponsor’s Self-Certification of Financial Capability • PPA Checklist(6 Copies of PPA package w/2 copies of Decision Document to RIT)

  14. Washington Review: • Based on PPA package • Regional Integration Team - HQ PPA review • Consistency with Approved Decision Document • Environmental Requirements are Satisfied • Consistent treatment of Sponsors • Firm project cost estimate • Non-Federal cash requirement and LERRD value • Financing Plan • Credits Model PPAs - Found on Legal Services homepage

  15. Typical PPA Problems: • Decision Document not approved! • District/Sponsor deviations on PPA overruled • Incomplete “shaky” 3rd Party Agreement • Changes in project definition • Poorly defined relocation and disposal area responsibilities

  16. PPA Approval • HQ notification to District that PPA package is approved by HQ and OASA(CW) • Project has received construction authorization from Congress • Project is included as a new start in the President’s budget or is included in Appropriations Act.

  17. STEP 18 Congressional Appropriations

  18. Energy & Water Development Appropriations Bill See Module 10

  19. The Appropriations Bill becomes law upon signature by the President

  20. Energy & Water Development Appropriations Act "Act" = "Law"

  21. STEP 19 PPA Execution

  22. PPA Execution • Construction funds have been included in the Appropriations Act • Is a media event on many projects • Signed by the local sponsor and a representative of the Army (varies)

  23. PPA Execution • After PPA execution the local sponsor can be instructed to begin acquisition of real estate needed for the project. • Real estate acquisition can be time consuming and a major headache for the sponsor, so many sponsors will begin acquiring real estate prior to PPA execution (even before Congressional authorization). • Early acquisition of real estate is legal, but the sponsor is assuming all of the risk that the project will ultimately be built. The Federal government will not accept any liability for early real estate acquisition.

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