The RFP Stage

The RFP stage serves the following purposes for the Project:

•  Providing Proponents the opportunity to demonstrate their understanding of the Project, as well as their respective role and responsibilities.

•  Allowing Proponents access to the site, the RFP data room and all relevant project related information.

•  Providing Proponents with the opportunity to develop their technical and financial proposals.

•  Allowing Proponents to review and comment on the draft Project Agreement that will be signed by the Preferred Proponent.

•  Finalizing contractually what is being agreed upon as to the design, construction, operation and maintenance as well as the required payments.

The department's preference is to use a multi-staged submission process. The intention is to provide early "feedback" to Proponents in order to minimize the possibility of unacceptable technical proposals and optimize the effort expended by the Proponent.

The department's preference is to evaluate technical proposals on a pass/fail basis. Among the Proponents with acceptable technical proposals, the Preferred Proponent is selected based on the best financial (price) proposal. The Department will subsequently execute the Project Agreement with the Preferred Proponent.

This technical pass/fail, low net present value price wins approach is an open, accountable, objective, competitive and transparent process. This approach selects the Proponent that meets the minimum acceptable requirements at the best value. It requires the project team to clearly define these requirements. It does not recognize any intangible/qualitative additional value that a Proponent may be able to offer. For example, a Proponent may offer to provide an on-site fitness centre with a discounted membership for government employees. The revenue from the fitness centre should be accounted for in the financial proposal but the added value for employee wellness would not be.

For projects with significant potential for qualitative added value a scoring system may be used to evaluate the proposals. The technical aspects are scored by the selection committee against predetermined criteria, provided in the RFP document. In this situation, the financial proposal is awarded a "points per price" score. For example, if 60 points are available for "price" and 40 points for technical quality, one scheme could be that the best (lowest NPV) financial proposal would receive all 60 points and the other proposals lose 1 point for every percent the financial proposal was higher (i.e. if 10% higher, receive 50 points). The Proponent with the highest total score (technical and financial) would be the Preferred Proponent. Under this type of scoring system it is imperative that;

•  The use of a qualitative scoring system is approved by the Project steering committee and the reasons for adopting this type of approach are recorded in the project documentation.

•  Proponents are not re-evaluated on qualitative factors already considered at the RFQ stage.

•  The evaluation criteria and weighting are provided in the RFP document and are adhered to by the selection committee.

Preparing a detailed Proposal is time consuming and costly for Proponents. Potential proponents are reluctant to commit resources to preparing a response if they do not consider that they have a reasonable chance of success (usually more than 3 proposals). Also, evaluating RFP's is a detailed and time consuming task for the project team. Consequently, single stage procurements using an open RFP call (no RFQ) are not used on Alberta government P3 projects.

The use of a Best and Final Offer (BAFO) approach where the field is narrowed to two "finalists" and parallel negotiations held with each finalist before they submit a final financial offer is not recommended on Alberta government P3 projects;

•  BAFO can be time consuming with extended negotiation periods.

•  The process is potentially unfair to other proponents who may claim to be able to make a better offer if allowed to participate in negotiations.

•  The negotiations may be perceived as changing the objectives of the project or the "rules of the game".

•  There may be perception that the negotiations are not truly parallel and independent.

•  Demonstrating value for money is difficult and requires a robust Public Sector Comparator (PSC) and Shadow Bid (see Management Framework: Assessment guidelines).

A recommendation to use a BAFO approach must be approved by the Steering Committee and the decision to use this approach must be supported by documented reasoning as to why a competitive multi-stage evaluation is not viable and how a BAFO will offer better value for money, including how the risks outlined above will be mitigated. Alberta Justice and Alberta Finance must be involved in the decision to recommend a BAFO.

The decision to adopt a BAFO must be made at the Business Case stage.