4.3  Alliance Development Phase

The purpose of the AD Phase is for the Shortlisted Proponents to engage in a collaborative and interactive development process with the Project Owner to develop a final Project Proposal which addresses both price and non-price Selection Criteria and meets the State's requirements. The Project Proposal must be consistent with the Initial Proposal, except to the extent that changes are made to the Initial Proposal that will enhance the achievement of the Project Objectives.

The Project Owner's Core Team will be available to provide information and assist the Shortlisted Proponents from a technical perspective, however at all times the Project Proposal remains with the Proponents.

In order to manage probity risks, the Project Owner will put in place protocols (to be detailed in the Probity Deed) for collaboration, the distribution of information and confidentiality to ensure information from one Shortlisted Proponent does not pass to the other. The Project Owner may appoint a Probity Auditor and in accordance with sections 8.10 and 8.27 of this RFP (and section 18.9 of the draft Alliance Development Agreement), take steps to co-ordinate interactions between the Core Team and Shortlisted Proponents and address probity concerns that may arise during the AD Phase.

(a)  Interactive development of Project Proposal

The key activities undertaken in the AD Phase are more fully defined in Schedule 3 of the Alliance Development Agreement, but will include:

-  participation in the AD Foundation Workshop and Financial Establishment Audit;

-  the Project design will be developed to a level of detail to enable the Shortlisted Proponent to submit a full Target Outturn Cost (TOC) as part of the Project Proposal;

-  risk and opportunity analysis will be undertaken and lead to the development of agreed Risk and Contingency Provisions;

-  the Commercial and Legal Framework, including the Risk or Reward Regime, will be finalised;

-  the Project Alliance Agreement will be negotiated to the point where each Shortlisted Proponent can execute the Project Alliance Agreement and submit it as part of their Project Proposal; and

-  preparation, submission and presentation of a Project Proposal containing the Project solution, the proposed team, the proposed Commercial and Legal Framework and the TOC.

The Project Owner will nominate a Core Team to facilitate the transfer of information between the Shortlisted Proponents and the Project Owner.

(b)  Submission of Project Proposal

The AD Phase concludes with each Shortlisted Proponent submitting a Project Proposal addressing the elements set out in Schedule 4 of the Alliance Development Agreement.

(c)  Evaluation of Project Proposals

The Evaluation Team will then evaluate the Project Proposals against the AD Phase Selection Criteria and recommend the selection of one of the Shortlisted Proponents as the Successful Proponent. Further information as to the Selection Process is provided in section 5 of this RFP.

As set out in the National Alliance Contracting Policy Principles, the recommendation to execute the PAA with the Successful Proponent will:

(1)  progress through the Project Owner's established governance framework;

(2)  if endorsed by the Project Owner, proceed to the [insert relevant portfolio Minister for administering the enabling Act] for endorsement; and

(3)  finally, proceed to the Treasurer for approval.

If necessary, the Project Owner will negotiate until the Project Proposal meets the requirements of Project Owner's VFM Statement and the Commercial and Legal Framework.

If, in the Project Owner's opinion, negotiations with the Successful Proponent are not successful, the Project Owner may commence negotiations with the other Shortlisted Proponent, call for new Proposals or abandon the Selection Process.