Due to the inherent complexity of PPPs, Participants and Governments have to commit significant time and resources during the procurement phase, involving large teams of highly skilled individuals spanning the range of disciplines (such as technical, legal and financial, etc.) required for each bidding party as well as Government. Accordingly, unanticipated extensions to procurement process timeframes are a key factor leading to:
• high bid costs for consortium sponsors and high transaction costs for Governments
• an inability of the PPP market to plan and manage resources effectively across projects from the perspective of both public and private sectors
• a delayed provision of essential services to the public as a result of the increased time taken to close transactions and deliver infrastructure.
One aspect of the procurement process that can significantly contribute to inefficiency and bid costs is the time taken to select a preferred bidder through protracted re-bid phases, which can occur as a result of:
• insufficiently developed project briefs,
• significant changes in scope,
• the submission of bids with material technical or commercial issues that require resolution, despite the Interactive Tender Process
• a desire to resolve outstanding issues while maintaining competitive tension24.
Some Australian jurisdictions have required very long bid validity periods of up to 18 months, partly to cater for a further bid stage.
Although most Participants felt that probity processes have not been unduly restrictive, some Participants disagreed. Participants view Interactive Tender Processes very favourably and believe that interaction has increased in recent PPP projects. However, the effectiveness of interactions has varied from project to project, with some having received little or no feedback on their emerging proposals due to probity concerns. Some Participants feel that probity processes sometimes can be overly restrictive and prevent the best value for money outcomes for Government, particularly where the Government project team is relatively inexperienced and therefore more likely to follow an overly risk averse approach to probity rather than an approach that better balances probity risk with the aim of receiving bids that closely reflect the Government's desired outcomes.
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24 There have also been examples of bidders themselves not taking full advantage of the Interactive Tender Process and delivering bids still with significant departures from the RFP requirements.