In considering how the public interest will be served and the approved VfM proposition will be delivered at a fair price, the Owner should be mindful of a number of observations and conclusions made by public sector commentators. In particular, the following examples should be noted:
• '… reliance on a non-adversarial approach to conflict resolution and a 'best- for-project' approach … may lead to the parties forming too close a relationship. This may in turn lead to 'capture' by the private sector proponent/s and a failure to consider the overall public interest. Capture can also be a problem if the 'partnership' is lopsided to the extent that the agency develops a dependence on the proponent/s for information and advice'.17
• 'Alliancing is designed for complex projects with unpredictable risks, and this does not align well with any loose and sloppy practices; nor with taking the line of least resistance'.13
• [the Owner] …'should act as an intelligent customer by sharpening the approach to negotiations'.18
• [the Owner should ensure it gets a good deal from the NOPs by] '…discussing with the suppliers all the elements of the contract price, including the level of service, timescale of the assignment skill mix of the supplier's team and how costs are to be renumerated'.14
These observations highlight the importance of the Owner taking leadership and actively structuring and directing the alliance to its (and the government's) investment objectives in order to achieve the agreed VfM proposition. Primarily, this direction will occur through the VfM Statement, but will also occur through the Owner's active participation in the alliance.
______________________________________________________________________________
17 ICAC [NSW Independent Commission Against Corruption], 2006. Guidelines for Managing Risks in Direct Negotiation (Appendix 2).
18 'Getting value for money from procurement - How auditors can help', National Audit Office, Office of Government Commerce, UK (page 4).