In certain circumstances it may be preferable to concurrently undertake negotiations with two or more bidders prior to finalising the evaluation process and selecting a preferred proponent, rather than undertaking a BAFO. If this is the case, the BCC must approve this process prior to commencing pre-selection negotiations.
Pre-selection negotiations should be used where the evaluation panel believe that greater interaction (than is usually present in a BAFO) is required with bidders to develop their proposals to a standard which justifies their appointment as preferred proponent.
These circumstances usually arise where:
• The main outstanding issue preventing a bidder from being appointed as preferred proponent, is their failure to accept Government’s preferred risk allocation and
• The evaluation panel believes a higher level of interaction (than would be present in a BAFO) is required with bidders to resolve these outstanding contractual and risk allocation issues.
In order to maintain competitive tension and minimise bid costs, pre-selection negotiations should be undertaken within a tightly defined timeframe.
Negotiations should address all areas of deficiency in a bidder’s proposal (design, construction, services, financial and contractual).
Given the high level of interaction during the pre-selection negotiations, agencies may elect to negotiate with each bidder on different risk allocation and contractual terms, reflecting the issues which are most important to that bidder. Advice should be sought from a probity auditor. The following rules should be adopted:
• The Call must specifically include a right for the agency to undertake pre-selection negotiations on different contractual terms with bidders
• Where different concessions are made to different bidders during the pre-selection negotiations, a risk adjustment is made for that concession, with the effect of either increasing or decreasing the perceived price of their bid
• If both bidders request the same amendment, then if the agency concedes the amendment to one bidder it must concede it to the other bidder, provided this is a sensible concession in the overall context of the other bidder’s proposal.