Did the 2009 Georgia Public Private Partnership law cancel pending DOT contracts that were procured under the old Public Private Initiatives law?

Plain-English summary

The Georgia DOT Commissioner asked whether DOT could continue to negotiate and execute contracts on projects whose contractors had been selected under the former Public Private Initiatives (PPI) law, even though that law was repealed in 2009 by the new Public Private Partnership (PPP) law (effective May 11, 2009).

The Attorney General drew a clean line at the date of contract execution. Of four PPI projects that had been in process, only one (the I-75/575 Northwest Corridor) had reached an executed contract before May 11, 2009. That contract was a Developer Services Agreement (DSA) signed in May 2006, covering environmental studies, preliminary design, and similar early-stage development work. Under Ga. Const. art. I, § I, ¶ X, the legislature cannot pass a law impairing the obligation of contracts. So the DSA remains valid and may run to its scheduled March 2010 expiration. But the design-build construction agreement contemplated to follow the DSA was never executed, so the new PPP law applies, and the construction phase would have to go through fresh procurement.

The other three projects (I-20 Managed Lanes Corridor, GA 400 Crossroad Region, I-285 Northwest TOT Lanes) had no executed contracts. They must be re-procured under the new 2009 PPP law if DOT wants to pursue them.

The opinion explains why fresh procurement is necessary. The 2009 PPP law made significant procedural and substantive changes from the 2006 PPI law: (1) only solicited proposals are allowed (the original Northwest Corridor was an unsolicited proposal); (2) private financing is now a required component, not just one of three permitted bases; (3) the solicitation must include DOT's "proposed financial participations"; (4) the project must have at least two qualified respondents; and (5) respondents must "meet the level of private financial participation called for by the department" in the solicitation. None of these new requirements applied to the under-the-old-law procurements, so DOT cannot bridge the old work into the new framework. It must restart.

Currency note

This opinion was issued in 2009. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Why does the constitutional contracts clause protect the DSA but not the future construction contract?
A: Because the DSA is an executed contract. Ga. Const. art. I, § I, ¶ X prohibits laws impairing the obligation of contracts. Once the DSA was signed in May 2006, both parties had vested rights and obligations. The legislature could not retroactively void those rights with the 2009 statute. But the future design-build construction contract was only contemplated, not signed, so there was no contractual right to protect.

Q: What was different about the new 2009 PPP law's substantive requirements?
A: The biggest substantive change was the private-financing requirement. Under the old PPI law, private financing was one of three legal bases for the contract (alongside contracts that did not require private money). Under the new PPP law, only "projects that are funded or financed in part or in whole by private sources" qualify. The single Northwest Corridor proposal had no financial participation and explicitly disclaimed any. So under the new law that proposal would be ineligible.

Q: Why does the new law require at least two qualified respondents?
A: Competition. The 2009 PPP law at O.C.G.A. § 32-2-80(a)(4) requires that DOT solicit and receive responses from at least two parties who are "fully qualified, responsible, and suitable on the basis of initial responses and with emphasis on professional competence" AND who "meet the level of private financial participation called for by the department." If only one respondent emerges, the project cannot be awarded.

Q: What is a Developer Services Agreement?
A: A limited contract for early-stage development work: environmental studies (especially for federal NEPA permitting), initial preliminary design, design criteria. It is not a construction contract. The Northwest Corridor DSA was specifically structured as a "service order" framework where individual scopes of work could be developed and executed as needed. It expressly did not include construction.

Q: Why must DOT re-procure projects in negotiation but not yet contracted?
A: O.C.G.A. § 32-2-60(a) provides that "[t]he department shall have the authority to contract as set forth in this article." When the 2009 PPP law repealed and replaced the former PPI law, DOT's authority to contract under the old framework ended. Without an executed contract, DOT had no preserved legal authority to complete the procurement under the old law. Future contracts must follow the new statute's procedures.

Q: Did the Board ever pursue the Northwest Corridor design-build phase?
A: The opinion notes "it is my understanding that the Board has recently determined not to pursue this project both because of the change in state law and for sound business reasons." So even if the AG had blessed continued negotiation, the Board had separately decided to step back. The Northwest Corridor was eventually delivered as a managed-lanes project under different procurement, with significant later changes to the design and financing.

Q: What about the federal funding implications?
A: The DSA's environmental work was being done in part to comply with the federal National Environmental Policy Act (NEPA). That federal-law work would need to continue regardless of state procurement framework if DOT was going to use federal funds for any version of the project. But the federal NEPA requirements operate on the project independent of which state-law procurement statute was in effect.

Background and statutory framework

Georgia's Public Private Initiatives (PPI) law was enacted in 2003 to give DOT new tools for delivering large infrastructure projects with private partner participation. The law allowed both solicited and unsolicited proposals, accepted multiple legal bases for contracts (including projects with no private financing), and gave DOT broad discretion in negotiating with selected contractors. By 2009, four projects had been initiated under PPI: the I-75/575 Northwest Corridor, the I-20 Managed Lanes Corridor, the GA 400 Crossroad Region, and I-285 Northwest TOT Lanes.

The 2009 General Assembly repealed and replaced the entire PPI framework with a new Public Private Partnership (PPP) law (2009 Ga. Laws 976, codified at O.C.G.A. §§ 32-2-78 to 32-2-80, effective May 11, 2009). The new framework was tighter: solicited proposals only, private financing mandatory, at least two qualified respondents, and a single named contract type ("contract for public-private partnership"). The legislative goal seems to have been a more disciplined competitive process with mandatory private financial participation.

The 2009-7 opinion is a clean application of two doctrines. First, the constitutional contracts clause preserves vested contract rights from retroactive legislation. Second, statutory authority to contract evaporates when the underlying statute is repealed unless the new statute preserves the old authority. Both doctrines together produce the line: executed contracts survive, unexecuted negotiations do not.

Citations and references

Constitutional provisions:
- Ga. Const. art. I, § I, ¶ X: no laws impairing obligation of contracts

Statutes:
- O.C.G.A. §§ 32-2-78 to 32-2-80 (2009), Public Private Partnership law
- O.C.G.A. §§ 32-2-78 to 32-2-80 (2006), former Public Private Initiatives law (repealed)
- O.C.G.A. § 32-2-60(a), DOT contracting authority "as set forth in this article"
- O.C.G.A. § 32-2-80(a)(2) (2009), solicited proposals only; financial participation
- O.C.G.A. § 32-2-80(a)(4) (2009): minimum two respondents; private financing match

Legislation:
- 2009 Ga. Laws 976, repeal and replacement (PPP law)
- 2003 Ga. Laws 905, original PPI law
- 2005 Ga. Laws 902: PPI amendments

Source

• Landing page: https://law.georgia.gov/opinions/2009-7
• Original PDF: not linked from landing page

Original opinion text

You have requested my opinion whether the Georgia Department of Transportation ("DOT" or "Department") may continue to negotiate and execute contracts for projects in which the proposed contractors were selected under the former Public Private Initiatives (PPI) law, which was repealed by the General Assembly by substitution of a new Public Private Partnership law (the "2009 PPP law"). [1] Due to significant procedural and substantive differences between the two laws, it is my opinion that the Department's legal authority to enter a binding contract under the former PPI law was revoked by the 2009 PPP law, and those projects or portions of projects which were not formalized by an executed contract before May 11, 2009, must be re-procured under the authority and procedures of the 2009 PPP law. In your request you have listed and described the existing status of four public participation projects which have been in process since the former PPI law was enacted. [2] Of these four, only one was formalized with an executed contract: the I-75/575 Northwest Corridor project. The remaining three have not proceeded beyond the negotiation stage. The single executed contract under the PPI program was a Developer Services Agreement ("DSA") intended to define the scope of the Northwest Corridor project and to secure the necessary studies for permitting under the federal National Environmental Policy Act. The DSA, in its scope of work, contracted for developer services such as environmental studies and assessments, initial preliminary design and design criteria, and like services. The DSA was a limited contract and had no provisions for construction of the project contained within its scope. [3] The DSA expires in March 2010 unless extended within its stated scope of services. While a form of "Project Framework Agreement" was drafted that was intended to lead to a "Contract for Public Private Initiative" and a possible design-build construction contract, no such contracts or other related agreements were ever agreed upon or executed prior to the repealer date of May 11, 2009. The Georgia Constitution states that "no . . . retroactive law, or laws impairing the obligation of contract . . . shall be passed." Ga. Const. art. I, § I, ¶ X. This constitutional principle would govern the treatment of any PPI contracts which were executed under the former PPI law, including those executed to procure services for the Northwest Corridor Project. Accordingly, the DSA remains a lawful contract, notwithstanding the repealer, and may be completed. While the DSA remains protected and in effect under the constitutional provision referenced above, the proposed design-build agreement mentioned therein is not encompassed within the scope of the DSA. The authority for the Department to enter into a design-build agreement was withdrawn with the repeal of the old O.C.G.A. § 32-2-80 (2006) and enactment of new, substantive contracting requirements. Furthermore, it is my understanding that the Board has recently determined not to pursue this project both because of the change in state law and for sound business reasons. Procedurally, the new law "streamlines" the procurement process; however, there are significant substantive changes as well. The 2009 PPP law, O.C.G.A. § 32-2-80(a)(2) (2009), authorizes a single method of procurement for contracts for a newly defined form of contract: a contract for public-private partnerships ("CPPP"). While the former PPI law permitted both solicited and unsolicited proposals, the 2009 PPP law requires that a solicited proposal be utilized. [4] The original Northwest Corridor project, for example, was an unsolicited proposal. There were no other proposers when it was put out for competitive proposals under the former PPI law's procedures. The 2009 PPP law now contemplates that only those "projects that are funded or financed in part or in whole by private sources" qualify for consideration under the public-private partnership provisions of O.C.G.A. § 32-2-80 (2009), whereas the former PPI law authorized private financial contribution as one of three permissible legal foundations for the contract. [5] Further, the procedure requires that the DOT include in the solicitation the DOT's "proposed financial participations." [6] The single proposal submitted for the Northwest Corridor Project included no proposal for a financial participation in the project, and specifically disclaimed any intent on the part of the proposer to engage in any financial participation. The most significant substantive revisions place two key restrictions upon the DOT's authority to negotiate a contract for a public-private partnership after a solicitation. First, after the DOT solicitation, the 2009 PPP law requires a minimum of two respondents to the solicitation before the Department can proceed to enter into negotiations. It cannot award a contract if there is only one respondent. [7] These two respondents must also meet two legal sufficiency standards, one of which is a new requirement: (1) the requirement that the respondents be "deemed fully qualified, responsible, and suitable on the basis of initial responses and with emphasis on professional competence," and (2) the new mandate that the respondents "meet the level of private financial participation called for by the department" in the solicitation. [8] Without meeting these specific new requirements, along with the other general requirements of O.C.G.A. § 32-2-80, the DOT is without legal authority to negotiate or enter into a CPPP. [9] Based on the foregoing, it is my official opinion that the Georgia Department of Transportation's authority to enter a binding contract pursuant to the former Public Private Initiatives law was revoked by the 2009 Public Private Partnership law; those projects or portions of projects which were not formalized by an executed contract with the selected firm before May 11, 2009, must be re-procured under the authority and provisions of the 2009 law. Prepared by: George S. Zier Senior Assistant Attorney General Enclosure Attachment 1 Public-Private Initiative Projects 2003 through 2008 · I-20 MANAGED LANES CORRIDOR. GDOT announced a Notice of intent to Solicit on July 19, 2007, for the I-20 Managed Lanes Corridor. Although the Notice of Intent was issued, a solicitation document has not been released as of the date of this letter. · I-75/575 NORTHWEST CORRIDOR. Unsolicited proposal was received November 23, 2004, from the Georgia Transportation Partners ("GTP") for in the I-75/I-575 Northwest Corridor. In October 2005, the Advisory and Executive Committees approve the Northwest Corridor as a PPI project. GDOT signed a Developer Services Agreement ("DSA") with GTP May 18, 2006. In June 2006, GDOT issued a Notice to Proceed to GTP for development phase activities. GTP is still undertaking work under the DSA which is scheduled to expire March, 2010. · GA 400 CROSSROAD REGION. Unsolicited proposal was received December 27, 2004, from the Crossroads 400 Group for improvements to GA 400. At the Department's request, the Crossroads 400 Group submitted revisions to the proposal on November 21, 2005. · I-285 NORTHWEST TOT LANES. The Department received unsolicited proposal from the I-285 Northwest TOT Team for a truck only toll lane on I-285. Four competing proposals were submitted. [1] O.C.G.A. §§ 32-2-78 to -80 (2009), enacted at 2009 Ga. Laws 976, 984-87, became effective upon approval by the Governor on May 11, 2009. It repealed and replaced in toto former O.C.G.A. §§ 32-2-78 to -80 (2006), as enacted at 2003 Ga. Laws 905, 905-10, and amended at 2005 Ga. Laws 902, 902-09. [2] See Attachment 1. [3] The DSA states: "The services to be performed by the DEVELOPER under this DSA shall encompass and include all work, services, materials, equipment, and supplies necessary to provide project management and administration, professional engineering services and related consultant and coordination services on a requirements basis to DEPARTMENT . . . ." Individual scopes of work in these categories were developed and executed as "service orders" as required by the DOT. [4] Compare O.C.G.A. § 32-2-78(6) and (8) (2006) with the current PPP law, O.C.G.A. § 32-2-80(a)(2) (2009). [5] Compare O.C.G.A. § 32-2-78(5) (2006) with the current PPP law, O.C.G.A. § 3-2-80(a)(2) (2009). [6] See O.C.G.A. § 32-2-80(a)(2) (2009). [7] Compare O.C.G.A. § 32-2-80(a) (2006) with the current PPP law, O.C.G.A. § 32-2-80(a)(4) (2009). [8] See O.C.G.A. § 32-2-80(a)(4) (2009). [9] "The department shall have the authority to contract as set forth in this article." O.C.G.A. § 32-2-60(a) (2009) (emphasis added).