Bidders at the RFP stage have to provide information for two key reasons:
• to enable Government to evaluate proposals to determine a preferred bidder
• to give Government certainty as to the quality and achievability of the product that it will receive.
Arguably, any additional information beyond that required for evaluation is excessive and contributes towards the unnecessary incurrence of bid costs. Government should have protection from an unacceptable product by:
• further development by the preferred bidder of its proposal in the period up to contractual close
• "fitness for purpose" tests
• the output specification for the project within the project contract and the associated Key Performance Indicator and abatement regimes.
Further, the receipt of unnecessary and excessive information (that evaluation teams frequently do not evaluate in detail) may result in unintended risk take back by Government, as the winning bidder could possibly claim that Government effectively accepted it by not objecting to it.
Accordingly, we recommend that, prior to the request of information from the market, in particular in relation to RFP documentation. project teams work on:
S. rationalising information requested that is neither required to evaluate bids nor required for certainty at contractual close, particularly that relating to some aspects of design and to general corporate processes
In undertaking this exercise, we suggest that Governments critically evaluate the information they consider requesting and categorise it into three segments:
• that required to select a preferred bidder
• that needed to ensure an appropriate degree of certainty as to the quality of the final outcome achieved that cannot be:
- resolved in documentation and design development after appointment of the preferred bidder (or once in exclusive negotiations, if there is no such formal appointment)
- satisfactorily tested by "fitness for purpose" tests after project award
- achieved through reliance on the Project contract, including appropriate abatement and Key Performance Indicator (KPI) regimes
• that which they neither need to select a preferred bidder nor require to provide certainty, and that accordingly project teams should not request.
We also recommend that Governments consider:
T. using Gateway or other independent reviews at the key stages of documentation preparation and the procurement process to verify their appropriateness (ensuring that reviewers are familiar with PPP projects).
These reviews could assess EOI and RFP documents prior to their release, in order to identify any excessive information requirements (particularly relating to design and standard processes) and to improve the quality of the documents, as currently undertaken by some projects and jurisdictions.
We expect that the elimination of excessive information requests would result in a significant reduction in the total information requested from all bidding parties as part of an initial submission, with some reduction in the total information required from a preferred bidder. This reduction would reduce overall bid costs (and the public sector's costs of evaluating proposals) as well as enable bidding parties to focus on more important aspects of the proposal.
As design typically accounts for over 50% of bids costs and as some Participants estimated that excessive design information requests could account for a significant proportion of design costs, there is the potential for Governments to reduce bid costs materially by implementing this strategy.
However, reducing the level of information required in RFP responses will create a degree of execution risk of:
• the winning bidder finding errors in its bid during the development process up to contractual and financial close
• the winning bidder failing to develop its proposal to provide the further information needed to enable the Government to sign the project contract
• the project not meeting the standard desired by Government, either at commissioning or subsequently during operations. Although the Government will have contractual protection against this risk, it will bear some political risk.
Hence, Governments should consider this risk as part of the rationalisation process. There will need to be an onus on the preferred bidder not to change its price or other material aspects of its proposal as a result of further development of its proposal in the period up to contractual close. (By doing so, it would run the risk of the Government reverting to another bidder.) Governments could explicitly take account any such change within a specific evaluation criterion for subsequent projects at both EOI and RFP stages (and clearly state in advance that they will do so).
Similarly, though less importantly, Project teams also should:
U. review the EOI process to ensure clear communication of objectives to the market and a focus on the ultimate selection of a short-list of bidders that is most likely to deliver the best overall solution for the project. In particular, information requirements should match closely the evaluation criteria, which should focus on proven ability to deliver the key aspects of the project, including value for money).
Governments could consider setting page limits for each section of EOI submissions, which could provide an indication of its relative importance. However, Governments would need to set such limits carefully to ensure they are adequate, and it is not clear whether there would be any benefit.