Procurement phase costs are the costs incurred by the owner from completion of the business case up until the start of construction and are comprised of costs associated with the following key activities:
• Preparing and issuing procurement documents (request for qualifications and request for proposals),
• Obtaining an invitation to bid,
• Drawing up a contract,
• Evaluating proposals,
• Negotiating with the preferred proponent, and
• Dealing with any deviations from the contract conditions.
In addition, projects can typically incur the following costs:
• Cost estimates (capital and life cycle),
• Geotechnical investigation,
• Cost of legal advisor,
• Information technology (e.g., data room),
• Asset studies, and
• Ministry/public sector internal costs.
Owner's costs that are unique to the Shadow Bid include:
• Partial compensation (honorarium),
• Business/Financial advisor,
• Procurement advisor, and
• Additional legal advice to develop the project agreement.
These advisory elements are necessary to acquire the appropriate financial, procurement, and legal expertise required to ensure the final project agreement properly addresses all aspects of successful project completion and ongoing operations for up to 40 years.