An alternative approach to a Proponent nominating its fee is to establish the NOPs' fees post selection by auditing its business-as-usual fees (BAU) for comparable projects. However, this is not the preferred approach for a number of reasons. In particular:
It is an unduly complex process compared to the Proponents nominating their fee as part of their tender proposals, which the Owner can then assess independently.
An historical assessment of the NOPs' BAU fee may not reflect:
• the market's current conditions;
• the NOPs' current risk/reward appetite;
• the specific characteristics of the current project;
• a balance of profitable and unprofitable projects; and
• the lower risk profile (for NOPs) that is associated with entering into an alliance contract.
It is not a competitively determined outcome.