To ensure an efficient and competitive process, all P3 projects should involve fair, open and transparent public tendering process. Included in this process is a request for qualifications (RFQ) stage and a request for proposals (RFP) stage. More detail regarding the P3 procurement process can be found in Schedule 4.
The RFQ should be published in widely available public media. The primary purpose of the RFQ stage is to market the project to a wide audience to encourage participation and competition. In order to narrow the field of high-quality proponents that will receive the RFP, the RFQ should have respondents demonstrate their technical and financial capabilities to deliver the project, as well as their experience and approach in delivering the various aspects of the project. The RFQ stage also has several other purposes, including:
• Signalling the intent of the Department to proceed with the project in order to heighten its profile;
• Presenting an overview of the proposed scope and structure of the transaction; and
• Allowing Interested Parties to assemble the requisite resources and form teams as appropriate.
Based upon established evaluation criteria, the top respondents are invited to respond to the RFP. In order to maintain both competition and manageability, the top three or four respondents should be invited to respond to the RFP. Sole source contracting of P3 projects is not recommended in any situation.
The RFP stage is designed to ultimately lead to the selection of the private entity that will deliver the project. This stage allows proponents the opportunity to develop their technical and financial proposals, and comment on the draft agreement that will be signed by the winning bidder. It does so by allowing proponents access to all relevant project related information and providing proponents the opportunity to demonstrate their understanding of the project, as well as their respective role and responsibilities.
A selection committee composed of senior Administration staff from relevant business units should be formed to make a final decision on the successful project bidder. As well, a process consultant/fairness auditor should be hired to ensure that the selection process adheres to the highest standards of fairness and transparency. It may also be advisable to form an expert advisory committee that includes independent external experts to review the business case and the results of the procurement process.
The selection of the winning bidder should be based on a multi-stage process whereby the bidding entities' technical proposals that will be evaluated on a pass/fail basis, or scored according to criteria set out in the RFP document. Subsequently, bidders will submit a financial proposal based on a Net Present Value (NPV) total project price. In order to maintain consistency and objectivity, as well a deliver value to taxpayers the winning bid should be the lowest net present value bid, unless there are significant differences between bids in terms of the expected social and/or environmental impacts that offset the financial basis for awarding the bid. However, for projects in which criteria other than the lowest NPV are taken into account, it is important that the evaluation criteria and weighting are provided in the RFP document and are adhered to by the selection committee. As well, the reasons for adopting this type of approach should be recorded in the project documentation.
The terms of the finalized contract will be based on the specifications identified during the evaluation process and the procurement (RFQ and RFP) process. However, any changes made during the procurement process need to be evaluated in terms of the impact on the value for money assessment. During the procurement process, issues may arise that cause The City to abandon the P3 and move back towards a traditional delivery model. An important consideration in this decision is the impact on future P3s.