Governments allocate public resources to procurement processes that add optimal value to the public interest, and will seek to ensure that these procurement processes promote the efficient use of resources from participating private parties. As such, it is important that an agency only start a market engagement process that has already obtained government approval.
Procurement processes are best selected and tailored to deal effectively and efficiently with the known complexities and risks of a specific project, and in order to optimise Value-for-Money outcomes. Alliance contracting should only be selected after a robust analysis has been undertaken to determine whether it is the most appropriate procurement method in the circumstances, including prevailing market conditions. Where the government approves a recommendation to proceed with alliance contracting, the specific strategy and structuring of this alliance should be detailed before approvals for market engagement are sought.
As part of the market engagement process, agencies should make clear to the alliance Proponents when the alliance (including the agreed alliance principles such as 'no blame', 'good faith' and 'best-for-project') will formally begin. This policy supports the formal alliance starting only once the commercial negotiations have finished and the project alliance agreement has been executed by both parties.