Close of Dialogue and Selection of Preferred Bidder

Authorities and Bidders should note that the dialogue cannot be closed until all derogations from SoPC4 and HPP have been resolved and approved as appropriate by CLG/HCA, and , for SoPC 4 ones IUK (acting for HMT).

Authorities and Bidders should note that CLG/HCA cannot consider any further derogations, whether proposed by the Local Authority or the Bidder, following Close of Dialogue save for:

•  the gaps specifically identified and as agreed in the Pre-Close of Dialogue Derogations Tables; and

•  those which arise from an unforeseen change in circumstances which it was not possible to anticipate during the dialogue phase (please note that this exception must not be used to defer finalising issues which are capable of being finalised during the dialogue).

(New derogations are not expected to arise after close of dialogue (when only clarifying and fine tuning is allowed by the procurement rules). It is acknowledged that new derogations have arisen on projects at this stage in the past as a result of new issues affecting the market. However it is now expected that no such unanticipated issues should be coming through).

When the Derogation Tables are completed IUK will report to HMT, and HMT will either approve (or not) the SoPC and, as necessary, other derogations.  IUK will then report back to CLG/HCA.

If there are no SoPC4 or HPP derogations requiring approval between Close of Dialogue and Financial Close it is none-the-less necessary that a report to this effect be made by HCA to IUK/CLG (and a final draft contract provided to IUK) and that Financial Close does not take place until IUK confirms (which should be a formality) that HMT clearance for SoPC 4 derogations has been obtained.

Authorities should ensure that senior lenders are aware that any internal or credit approval is not finalized until SoPC 4 approval has been obtained to any SoPC4 or other difficult, unusual or contentious derogations and until CLG / HCA approval has been obtained for similar HPP derogations.

IUK does not engage directly with bidders or lenders - its engagement is with CLG/HCA.  As a last resort however CLG may request IUK to become more directly involved in any intractable issue prior to financial close.  However CLG/HCA, the Authority and its advisers should always participate in any such call/meeting. .

Again, in submitting pre-close of dialogue bidder derogations HCA will require an Authority to confirm that, firstly, there are no additional Authority requested derogations at this stage and, secondly, that the Authority is itself entirely satisfied that the bidder requested derogations are legitimate and complete (i.e. the HCA does not expect authorities to simply pass through bidder requested derogations for consideration).