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Legal & Regulatory Frameworks Flashcards

7 cards from real CP3P practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Legal & Regulatory Frameworks flashcards as text

  1. When legal instruments conflict, which generally prevails in a PPP legal framework?

    Answer: Primary legislation over the PPP contract

    Contracts cannot override statutes, and statutes are subordinate to the constitution in the legal hierarchy.

  2. What does a Material Adverse Government Action (MAGA) clause typically address?

    Answer: Government actions that materially and adversely affect the private partner's ability to perform or its returns

    MAGA clauses entitle the private partner to compensation or relief when specified government actions harm the project.

  3. Why do many PPP contracts include refinancing gain-sharing provisions?

    Answer: To share with the authority the benefits of refinancing that improves equity returns

    Gain-sharing ensures the public sector benefits when improved financing terms boost private returns, often 50/50 or more.

  4. Which practice best manages conflict-of-interest risk among an authority's PPP transaction advisors?

    Answer: Requiring disclosure and prohibiting advisors from serving bidders on the same transaction

    Disclosure rules and exclusivity restrictions protect the integrity and fairness of the procurement.

  5. For FHWA-funded US P3 highway projects, Buy America requirements primarily apply to which items?

    Answer: Steel and iron products permanently incorporated into the project

    FHWA Buy America rules require domestically produced steel and iron, with limited waivers.

  6. What is the function of an order-of-precedence clause in a PPP contract?

    Answer: To determine which contract document prevails if documents conflict

    It resolves inconsistencies by specifying which document, such as the main agreement or output specification, controls.

  7. During legal due diligence early in PPP preparation, why is it critical to confirm the authority's legal power (vires) to enter the contract?

    Answer: A contract entered without legal authority may be void as ultra vires, undermining bankability

    Lenders and investors will not finance a contract that could be invalidated because the authority lacked capacity.