Under this approach to selection, the NOPs are selected solely or predominantly on the basis of non-price criteria. This approach to selection of Proponents is normally carried out through written submissions or interviews, scenarios or role playing. Owners should exercise caution when considering whether to adopt this approach. Generally, it is rare that at least some elements of the project solution and pricing are unable to be developed in a competitive environment.
The non-price selection process has often been used historically when the Owner requires an immediate start to the project. As explained in Guidance Note 5, under best practice conditions this time saving may be negligible or non-existent. Essentially, the Non-price approach allows a sole preferred bidder to be appointed on the basis of a capability statement. Once a sole bidder has been identified, the Owner may be able to engage, by a side agreement for the performance of early works, that bidder to commence those works (rather than having to hold-off on the works until a competitive selection process has been completed). However, before undertaking such early works (in parallel with the primary selection process), the Owner should ensure it is not effectively 'captured' by that bidder.56 In these cases, the non-price selection process should be approached with caution. If an immediate start is crucial for the project, another alternative is for the Owner to engage a third party to undertake early works that are not dependent on the final project design. Additional information is provided in Appendix C3.
| Early works is not best practice and should be avoided Under any selection process, engaging Proponents to perform early works is not best practice and should be avoided; • Early works can lead to the capture of the Owner, as it would be difficult to engage a different Proponent to complete the project. • The performance of any early works (e.g. side agreements for early works) should be consistent with public sector standards for procurement and arms length negotiations. • If early works must be performed, the relevant work package should be 'quarantined'. For example, to the extent possible, Owners should avoid allowing Proponents to fully mobilise on site (e.g. site sheds that cannot be transferred to another contractor.) |
| Probity caution Owners need to be acutely aware of any conflicts of interest that may arise throughout the selection process. The use of suitably qualified and experienced probity advisers can assist in addressing these and other issues. One potential probity issue is that firms providing advisory services to Proponents on alliancing issues may also be employed by an Owner on a project involving the same Proponents. Such potential conflicts of interest need to be identified and managed appropriately. |
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56 Guidelines for Managing Risks in Direct Negotiation, NSW Independent Commission Against Corruption (ICAC), 2006.