The key strategy to reduce both the bid period's overall length and its variability is:
I. only using more than one bid stage where absolutely necessary, either because of changed market conditions or where no bidder has made an acceptable proposal.
Such circumstances might include bidders making unreasonable material technical or commercial departures.
Factors arising from our international review that could help reduce the need for multiple bids and achieve tighter timeframes while maintaining good value for money are:
J. obtaining commitment to the project from all key stakeholders at an early stage
K. developing better output specifications with less focus on design specifications (recognising that some areas, such as those involving safety, may require input specifications), including:
- having detailed guidance on their development within the National PPP Guidelines
- having a greater dialogue with potential bidders about the project functional brief before approaching the market
L. having a high degree of fruitful interaction during tender processes within appropriate but not excessive probity requirements
M. improved sharing of skills and knowledge between project delivery personnel and procurement project teams (i.e. not just respective PPP units), particularly in relation to lessons learnt and "good practices", adopting a framework to facilitate the transfer of experience from earlier to later deals. This action would enable a more structured process of learning and sharing, recognising that the main impact comes from the quality and experience of the project team. Governments should consider an interjurisdictional forum of project directors, organised via the COAG infrastructure PPP subgroup or Infrastructure Australia
N. revising sector-specific guidance and standard specifications where new issues recur
O. considering how to facilitate the effective retention and recycling of existing skills in complex procurement across the public sector, promoting an attractive career path in complex procurement backed by a structured training and development programme
P. undertaking good forward planning in the procurement phase, including early risk assessment, thorough due diligence, and robust output specifications.
Some Australian Governments already undertake these actions to a greater or lesser extent, but there are variations between Governments.
To achieve an efficient process, it is essential that Governments have strong project teams combined with efficient and decisive governance structures. (The same also applies to the delivery and operational phases.) The quality of the whole project team is critical to the success of the project, not just the project director. The experience and capacity of project team members responsible for managing the various disciplines required for a PPP project is important. This is often a challenge faced by Governments within standard public service pay scales. Therefore, to the extent that they do not already have them, Governments should consider implementing frameworks to further the:
Q. recruitment, development and retention of high quality Government project team members, in particular the project director and key team members responsible for managing each of the various disciplines.
These frameworks may include paying salaries at commercial rates, either within the public service or, more likely, as consultants. However, pay is not the only issue: other important factors include an appropriate level of empowerment and a clear career path.
To ensure timely decision-making processes, it is important that Governments aim at:
R. ensuring governance structures empower the project team to deliver the project while enabling effective and efficient decision making so as to prevent unnecessarily protracted and uncertain timeframes.
In doing so, Government will need to ensure that project directors and their teams have an appropriate level of autonomy and authority to make day-to-day project decisions. Further, where issues require direction from outside the project team, direct access to and feedback from decision-making bodies or individuals is critical, with appropriately delegated powers for when those individuals normally required to provide approvals and directions are not available.