Annex 4: Sharing of bid costs

The decision on whether to pay compensation to losing bidders as well as on the amount of such compensation is normally made on a case by case basis in Finland. This is a common practice in design and build projects in the road sector. It has only been used once in PPP procurements so far. If approved, compensation is normally payable to all bidders who submitted "accepted bids", i.e. those bidders who submitted eligible bids at the preferred bidder stage but did not win the tender. The amount of compensation which can be paid to losing bidders is normally subject to caps. No compensation is normally payable in case of project cancellation (e.g. if the project proved non-viable from financing perspective), in case of "ineligible" bids (i.e. those bids which fell short of announced eligibility criteria) as well as in case of a bidder's refusal to transfer ownership rights to its bid material to the contracting authority.

As far as the existing practices in the Netherlands are concerned, payment of compensation to losing bidders is currently used in PPPs in the transport and housing sectors as a measure aimed to bolster private sector participation. Payment of such compensation is dependant on entering a valid tender in a competitive dialogue for a PPP project and is normally subject to caps. For most central government agencies there are official policies on cost reimbursement to bidders, in which case each particular decision on reimbursement of bid costs is expected to be made with reference to such policies. In some cases (e.g. when the contracting authority decides to prematurely abort the tender process of the competitive dialogue) the winning bidder can also claim compensation of at least part of its bidding costs.

Reimbursement of bidding costs in Poland normally depends on the position of a particular awarding entity and is therefore decided on a case by case basis. The decision on reimbursement of the costs normally indicates the amount of costs which can be expected to be reimbursed and can also introduce possible conditions to be complied with by a bidder to be eligible to claim reimbursement. If introduced, such conditions apply equally to all bidders. In addition, in cases where the procurement proceedings have been cancelled due to a fault of the awarding entity (e.g. due to an irreparable failure to comply with applicable publication and / or notification requirements), the tenderers who submitted "non-rejectable tenders" (i.e. those tenders which complied with the requirements set out by the awarding entity) are entitled to "justified costs of participation in the procedure". What costs can be considered "justified" will be decided by the awarding entity in each particular case but such costs can be expected to include, among others, costs incurred in relation to preparation of the tender, travel costs, certain costs related to possible legal proceedings.

Compensation of costs incurred by losing bidders as a result of participation in a tender is not compulsory in France as far as PPP projects are concerned. A contracting authority may, however, take a decision to compensate losing bidders for part of their costs if according to its estimates such costs prove high. The terms of compensation, including any applicable cap, as well as the conditions to be met by a losing bidder to claim such compensation are to be published by the contracting authority in the beginning of the procurement process. To incentivise bidders to submit compliant and well-thought bids and discourage opportunistic bids, compensation is normally paid only to those losing bidders who have managed to proceed to the preferred bidder stage.

In the United Kingdom HM Treasury confirmed in 2008 that there should be a strong presumption against contributing to bid costs - although it clarified that it can be justified where there are legitimate concerns about competitive tension that cannot otherwise be addressed (to be judged on a case by case basis). The only sector where certain kinds of bid costs are more systematically considered for reimbursement is in waste. For example, planning costs are high in the waste sector, as is the risk of not obtaining planning consent, and the contracting authority would normally share planning appeal costs with the contractor if the planning application is unsuccessful at the detailed planning application stage. In some instances the contracting authority can also agree to pay planning development costs in order to accelerate the preparation of planning applications.