It was observed that the alliance sector is made up of 'multiple buyers (Owners) and few sellers (NOPs)'.
There was no evidence that the various buyers (Owners) took a collective or co-operative whole of government approach to the market and in some cases Owners were competing with one another to attract resources (NOPs) to their particular project, with the tools of attraction being the use of the alliance delivery method proposed terms, conditions and NOP selection processes that use non-price. As noted in Section 6.3, NOPs generally have a strong preference for the alliance delivery method over other delivery methods.
In this situation, and if the selection of NOPs does not involve robust competition, then the anomalous possibility exists that the primary competition could be occurring on the buyer (Owner) side not the seller (NOP) side. It is doubtful that VfM is being optimised in this situation.
Discussion Point 4 - Fragmented multiple buyers (Owners) The alliance market may be characterised by multiple buyers (Owners) and few sellers (NOPs) with the possibility that the primary competition is occurring on the buyer (Owner) side to attract sellers (NOPs) to their individual projects. VfM will be enhanced through a whole of government approach to the use of the alliance delivery method, engaging the market, commercial arrangements, legal agreements and selection processes. |