Shortlisting

The purpose of short-listing is to reduce the number of bidders to generally three to five. Bidding for a PPP, especially a complex PPP, is a costly undertaking for a bidder. The aim is to maximise competition, not the number of bidders. The presence of too many bidders on the short list may reduce the interest of some in participating and may cause good bidders to drop out.

In some cases, the public sector has sought to encourage candidacy by agreeing in advance to make a payment to each losing bidder that would partially reimburse it for the costs of bid preparation. Such payment could be made from money that the public authority would receive from the winning bidder (once again, specified in advance). The size of the payment has to be calibrated to discourage frivolous bids. Practice varies widely between countries. The public authority should ask their advisers about current market practice in the relevant sector and jurisdiction.

In evaluating the qualification submission, the public authority will focus on the technical capability, business capability and financial position of the potential bidders. In line with EU public procurement legislation, these capacities must be, in principle, demonstrated jointly, rather than individually, by the members of a consortium.

The prequalification submission will usually be required to describe the following: 

□  Business activities of the consortium (e.g. how many projects of a similar nature, suitably defined, the consortium has implemented over a specified number of past years); 

□  Financial information (e.g. thresholds involving turnover and net worth); 

□  Legal information about the PPP consortium, including any relevant litigation involving the companies; and 

□  Quality of personnel available to be involved in the project. 

The first step of the prequalification and shortlisting process is often to determine which consortia have passed the thresholds on all the relevant dimensions (i.e. pass/fail tests). Most of the criteria (e.g. company revenue) are expressed in terms of clear and objective thresholds. If that determination gives a number of consortia that exceeds the maximum number pre-specified for the shortlist (generally no more than five, depending on the type of project and market), then a systematic and predetermined process for scoring or ranking should be used to narrow down the list to arrive at a shortlist.

Sometimes shortlisting is done partly on the basis of responses that are submitted to a set of open-ended questions about how the companies would address certain key issues if they were to win the contract. For example, in the competitive dialogue procedure, initial shortlisting can be based partly on an assessment of the outline or indicative solutions given by the candidates.

At the end of the process, a well-substantiated prequalification report should be prepared to have a good audit trail. Unsuccessful candidates should be debriefed.