After evaluation and the identification of a successful Proponent, it is very likely that the evaluation panel will have identified issues such as:
• conformance adjustments to the solution;
• conformance issues in relation to the legal agreement or commercial proposal taking into consideration any (value-adding) agreements given by Proponents the earlier stages of the selection process;
• risk issues that may require or benefit from further clarification, development and resolution; and/or
• additional benefits offered by the Proponent that need to be accepted and added to the PAA's Functional Specification.
Such issues would be expected to be minor at this late stage in a collaborative process of the nature of the TOC development process; however, the Owner must resolve these prior to concluding the process. It is in the interests of the government that competitive tension is maintained until this process has concluded.
In the absence of full competition on all aspects of the Project Proposal, it is to be expected that the issues that remain at the conclusion of the TOC development process will include all those listed above (which also apply to a the full price evaluation), as well as differences of opinion on elements of the TOC.
These issues are all-interrelated. As stated previously, given the complex, long duration nature of well-selected alliancing projects, it is inevitable that such differences will exist, even if they are not caused by the commercial or other competing interests of the parties. In particular, the limits of accuracy of the TOC calculation are such that there is no single, correct, deterministic cost figure. It is important in this context that public officials understand that the TOC becomes an 'offer' at this point in the process.
The Owner will understand that all parts of the Project Proposal are interrelated and that resolution of an issue in relation to any part of the Project Proposal may affect other parts. The process should not be concluded until the offer is consistent with the Owner's VfM Statement and hence the approved Business Case.
Any departure from the offer accepted during competition must be properly justified and would generally be unacceptable.
The Owner must be prepared to conduct hard commercial and technical negotiations with the Proponent at this stage. In so doing, the Owner must understand that:
i. It is in the interests of the NOPs for the TOC and the alliance scope to be higher and larger respectively than is likely to be optimal for the Owner.
ii. If a TOC is accepted without such hard negotiations, even if it is consistent with the VfM Statement, it is probable that the TOC is conservative and that it does not therefore comply with the definition of the TOC (as the expected cost at completion).
Public officers cannot delegate this responsibility to the Preferred Proponent or to any third party.