Regardless of whether a non-price or price selection approach is used, an assessment of the NOP's non-price attributes is essential. Put more simply, a selection process using price competition must also assess non-price selection criteria if VfM is to be optimised.
Alliancing by its very nature puts a strong emphasis on the collaborative relationship between the owner and NOPs. This characteristic naturally flows into the selection criteria when determining the NOP team with whom the owner will form an alliance.
Typical alliance selection criteria includes:
• Track record of the organisation.
• Team.
• Approach to project.
• Understanding and commitment to alliancing.
• Potential to be a 'high performance team'.
• Willingness to commit to project objectives and outstanding outcomes.
In many cases the selection criteria that deal with project management skills are used as a 'hurdle' based on evidence of past experience and the selection criteria that deal with cultural and alliance affinity were used as 'differentiators'. This higher emphasis on cultural and alliance affinity selection criteria may have the effect of eroding the value proposition required by the business case. This is evidenced through:
• Previous alliance experience is taken as evidence of alliance affinity, tending to raise the entry barrier to proponents who do not have this experience.
• Selecting proponents on their alliance and cultural affinity potential is difficult and arguably highly subjective when combined with extensive preparation effort by proponent teams (which include alliance coaching, team building events and workshop rehearsals) to present themselves to best advantage.
• Alliance projects often have 'complex' characteristics and greater uncertainty that necessarily require more robust design and project management skills to deliver these projects - particularly if things go wrong during project delivery. It cannot be taken for granted that these skills are uniform across proponents or that a minimum level of skills (i.e. a hurdle) will optimise VfM.
• Considerable time and effort is expended in determining cultural and alliance affinity through workshops, interviews and the like. Owners sometimes commented that those nominees who attended the workshops and upon whom the NOPs were chosen as an alliance partner, were either unavailable or were phased out of the project quickly.
Therefore, to optimise VfM from alliancing, the non-price selection criteria need to have a greater emphasis on proven high calibre design, project management and commercial skills, together with the rigorous controls needed to deliver a complex, challenging project. The Research Team considers that such skills should be differentiators not mere hurdles.
There is a view that having a greater emphasis on price competition criteria for selecting NOPs will prove difficult when comparing two different teams, two different prices, and two different solutions. While this can certainly present challenges for the evaluation team, the challenges of evaluating two teams using non-price competition criteria are arguably even more subjective. It is also noted that traditional tenders regularly require evaluation of different proposals to identify superior VfM outcomes. This challenge should be seen positively as it provides the Owner with options on which to assess the optimum project VfM from a variety of potential NOP inputs.
Discussion Point 9 - Non-price criteria for selecting NOPs Because alliancing has matured over the last ten years and a better understanding now exists amongst NOPs of the collaborative nature of alliancing, the attributes of alliance affinity of NOPs may be better assessed as hurdle criteria and the NOPs project delivery skills (design, construction, controls, design management and commercial) as differentiators. Moreover, the maturity of alliancing should mean that any relationship risk (however real in the past) associated with a price competition can be satisfactorily managed. A price competition selection process must also include the evaluation of non-price criteria since governments are not interested solely in lowest price as a determination of value for money. |