Generally the Call should specify what constitutes a conforming bid. Depending on the particular project, this will require (amongst other things):
• Substantial acceptance of the revenue or service payment mechanism
• Substantial acceptance of the proposed risk allocation
• Compliance in all material respects with the requirements of any technical or design requirements or services specifications
• Compliance with planning approval (if available at this stage).
The Call will also identify parameters within which variations to the above requirements will be accepted, and the terms on which they will be accepted and evaluated. These are often referred to as a ‘variant conforming bid.’ Generally, the Call will specify that a variant conforming bid will only be considered if a conforming bid has been submitted by a proponent.
A non-conforming bid is a bid which does not comply with the requirements for a conforming bid or a variant conforming bid. These bids may differ significantly from the reference project assumed by the agency in its preparation of the PSC. Therefore sponsoring agencies should take care when deciding whether to evaluate a non-conforming bid and should consult with their probity auditor.
This does not mean that non-conforming bids should be rejected at the outset. Rather, it means that in addition to factors considered during the assessment of conforming bids, the evaluation should also have regard to factors considered by the agency in developing the reference project.
Agencies should ensure that the Call states that whether or not a non-conforming bid is accepted will be at the agency’s sole discretion.
Accordingly in addition to the standard evaluation criteria for both conforming bids and variant conforming bids (which would generally include a value for money test on any proposed user charges), the evaluation of the non-conforming bid should consider:
• Whether it is consistent with the agency’s CISP
• Whether the project will satisfy the project objectives
• The financial, design, construction and operational benefits of the project compared with the disadvantages
• The reasonableness of the risk-adjusted construction and operating costs to ensure that taxpayers/users get value for money
• Whether revised planning or environmental approvals would be needed and the likely cost of any conditions of approvals and the likely timeframe to get those approvals
• Whether the revised economic appraisal, based on the non-conforming bid, shows sufficient benefits exceeding costs (the agency should use assumptions that are achievable rather than necessarily any revenue, cost or other data provided in the bid).
• Whether the public interest would be served by adopting the non-conforming bid
• If applicable, any additional agency or budget funding required to deliver the associated core services or related works
• Any savings or additional costs to provide core services that may result from the non conforming bid.
Note that the standard evaluation criteria for both conforming bids and variant conforming bids should include a value for money test on any proposed user charges. This test would also need to be applied in the evaluation of a non-conforming proposal.
Where the agency’s evaluation panel concludes that a non conforming bid is the best proposal, the agency must:
• Demonstrate to the BCC why the proposal is the best proposal based on the above criteria and the other criteria used in the assessment process
• Update the public interest evaluation for the non conforming bid. If required by BCC, the agency must undertake a new community consultation program. In addition, the Department of Environment and Conservation or the Department of Planning may require the agency to undertake specific additional community consultation programs;
• Demonstrate to the BCC that direct negotiations should proceed with the proponent rather than competitively tendering the non conforming proposal, taking into account:
- Any intellectual property contained in the non-conforming bid and whether it would be prudent to value and purchase the intellectual property
- Timing of the required infrastructure and tender process
• The bid costs of the agency and bidders and the competitiveness of the current tender process and any future tender process
• Whether the solution provided in the non-conforming bid is consistent with the objectives of the current call for detailed proposals.