Through the continuing evolution of PPP procurement approaches, interactive tendering processes are now standard and are becoming more sophisticated as both the public and private sectors gain greater experience with the model. Specific guidance on the interactive tender process has been developed by Partnerships Victoria4, and the other States are adopting a similar approach.
Information sharing and interaction between parties early in the procurement phase is critical to PPP success, particularly in pathfinder projects. While the bidding consortiums have significant experience in construction and facility management, they need an accurate description of the way the public sector operators intend to use the facility to identify the best practice approach for the service. When transferring risks to the private sector, government agencies must allow time to educate the operators on the processes and challenges of the service being delivered.
Equally, the private sector must commit time and resources to understand their client's business. The private sector needs to identify operational risks and develop appropriate measures to mitigate these risks.
"With governments entering into 30 year contracts it is evident that greater government pre-planning and discipline is required for a PPP than a traditional model. The contract drafting could be improved with greater access to end-users throughout the process." Ray Wilson, Director, Plenary.
In their diligence to be independent, governments risk losing valuable insights to improve services and facilities to the community. Insights from end-users can be invaluable for the private sector in assessing the requirements for the project and preparing their bids. For example, the successful design process for the first NSW Schools PPP gathered insights from teachers and principals. Their knowledge of classroom management and curriculum delivery was fed into the facilities design, providing a material impact. As Geoff Barnsley, Executive General Manager Operations, Spotless explains:
"Sharing information allows us to better understand how the project will function in practice, so we can provide a pragmatic solution. Workshops in the initial stages of planning and development can establish rapport with stakeholders and ensure a high level of understanding and appropriate expectations are established."
… and through construction
Participants in the survey also identified that the project benefits from ongoing discussion with the public sector stakeholders and end-users during the construction phase. Interviewees advocate a framework of formal regular meetings to support the contract and strengthen relationships between parties.
As Norm Jagger, Queensland Southbank Institute of TAFE Project Director explains:
"A general theme of the construction phase is the necessity for contractors to work with the public sector. Even though the ultimate decision lies with the contractor, it will save them time and money to take advice from people who have experience in the industry. Throughout the construction phase, Queensland Southbank Institute of TAFE had public sector personnel devoted to working with the contractor to help them interpret and deliver the requirements of the output specifications."
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"Sharing information allows us to better understand how the project will function in practice, so we can provide a pragmatic solution." Geoff Barnsley, Spotless
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Not only does engaging with stakeholders enhance project delivery, it also serves to manage the expectations of the people involved. Managing community and employee expectations is important to government.
"Where possible, engaging school principals early has been hugely beneficial to the project as they have managed the teachers and communities' expectations of the project." Terry Whyte, Project Director, NSW Department of Education PPP.
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4 Partnerships Victoria Advisory Note October 2005, Interactive Tender Process