7.1.3  Enhances innovation

Section 2.5 advises Owners to focus competition on the intellectual contest between Proponents as they seek to innovate and develop the best solution to satisfy the Owner's VfM Statement and enhance relationships with the Owner during their interaction.

This intellectual effort is most effective in TOC development when focussed on innovating the Project Solution and associated scope and costs of constructing the works. It is at this point that the Proponents are motivated to demonstrate design and delivery innovation.

Competition enhances the application of intellectual effort on the Project Solution by improving the offered delivery solution and thereby impacting on Direct Costs and thereafter on reducing the remaining TOC components as shown in Figure 17 below. This illustrates the positive effect that competition has on costs and quality outcomes.

Figure 17: Impact of applying competitive intellectual effort

Owners and Proponents should not be distracted by focussing competition only on Fee percentages.