15.3 Interactive tender process in social infrastructure projects

An interactive tender process can be particularly useful for social infrastructure projects (e.g. a hospital), where there is a high level of interface risk between public sector operators and private sector infrastructure and service providers. Interface risk is commonly a feature of PPP projects in the social infrastructure sector because the infrastructure is designed and constructed by one party (private sector) and operated and managed by another party (public sector). This is in contrast to other PPP models where the operator is part of the private sector consortium and is intimately involved in the design of the infrastructure from both an operational and whole-of-life perspective (e.g. a toll road).

Social infrastructure facilities such as prisons and hospitals are highly dependent on the functionality of the infrastructure for operational outcomes and efficiencies. For example, the lines of sight between various officer posts in a prison affect staffing levels and recurrent costs. It is therefore essential that the bidders' facility concepts and designs take into account operational philosophies and practices at an early stage.

While the interactive process is especially useful for projects involving a public sector operator, it should be emphasised that the process could offer value to both parties for other types of PPP projects.