This thesis frames design in infrastructure public-private partnerships (P3s) as an exercise in negotiated collaboration. I investigate whether the collaborative design process in P3s can systematically deliver the benefits of innovation in design. The focus is on two aspects of the design process: project co-design, and collaboration mechanism. I find that both aspects enable innovation by driving project actors to learn about the design space and develop a shared understanding of the design problem. Learning through shared understanding not only improves quantifiable payoffs (Objective Value) but also enhances the actors’ psycho-social outcomes (Subjective Value).

Co-design is a process in which project actors simultaneously design technical and contractual features of a project. I developed a tradespace model to visualize and explore value trade-offs from co-design, using a desalination P3 as a project case. Co-design is a fundamental improvement over the traditional sequential design process because it reveals the zone of negotiated agreement, a frontier set of designs available to project actors, that can help them meet their own objectives while balancing value trade-offs. The combination of flexible modular designs and risk sharing revenue guarantee mechanisms emerged as a frontier design choice in the co-design analysis.

Communication and common knowledge are two different collaboration mechanisms that affect the design choices of project actors. A controlled design experiment with 112 experienced designers tested the relative effects of these two mechanisms. The role-playing designers negotiated design decisions for a desalination P3 using the co-design tradespace model. Only the communication mechanism systematically shifted outcomes. To increase the reliability of meeting uncertain water demand, the firm traded away an expected net present value profit share of 24% (p<0.001) on average, subject to the parameter assumptions. The water authority increased contractual payments by an expected net present value share of 6.6% (p<0.001) on average. Final designs in the exercise were on average 97.5% reliable in meeting uncertain water demand. Communication dominated common knowledge as a collaboration mechanism because it enabled participants to learn about the effects of modularity and revenue guarantees on counter-party outcomes and use these design features to negotiate value trade-offs.

Objective Value represents the technical (reliability) and economic (profits, payments) payoffs to project participants. Subjective Value on the other hand captures social psychological outcomes such as the degree of trust and rapport between collaborators and perceived fairness and legitimacy of the process, which are important for the partnering relationship. Participants in the 3 collaboration experiment overwhelmingly reported high Subjective Value scores, which are positively correlated with both their improved understanding of the project’s design objectives (r = 0.37, ρ = 0.41, p<0.001) and their ability to communicate with collaborators to agree on design choices (r = 0.36, ρ = 0.36, p = 0.001).

This work directly addresses the literature on infrastructure public-private partnerships and shows how negotiated collaboration can create objective as well as psychosocial benefits for a stronger partnering relationship. The co-design approach speaks to the literature on systems design to emphasize how a systems view can help designers balance trade-offs. The experimental study is a methodological contribution to both the design and negotiations literature, applying the Subjective Value framework in an integrated design setting.