13. When, as in the illustrative example shown in the table above, the bids do not achieve a mark of "Yes" against each of the eight categories then it is clear that it is premature to select the preferred bidder. The recommended way forward is for a package of work to be put in place with each of the remaining bidders (at least two) so that a position can be reached when at least one of the bidders' proposals is sufficiently mature, clear and acceptable to enable a "Yes" to be placed in each box in the above table. This work usually revolves around a further series of focused negotiation meetings. In some circumstances this may mean the Authority considering carefully its fallback position, which should be clearly defined in the internal negotiating brief, on some issues and possibly relaxing sufficiently to a position such as to make a failing aspect of a proposal acceptable.
14. As is said above, it is important that this round of further work is carried out whilst there is still competitive pressure because the chances on improving on a material issue after selecting the preferred bidder are slim.
15. The ideal case is when two or more proposals are such that each achieves the "All Yes" marking. In this eventuality the prescribed evaluation criteria (in line with the EU public procurement rules if these are being followed) should be used to select the preferred bidder. It is usual for one or more of the best losing proposals to be retained (either formally or informally) as backups should the detailed negotiation and due diligence with the preferred bidder falter. Consequently any constructive debriefs should be left until after contract award.
16. If only one proposal achieves the "All Yes" position, then it must be selected as the preferred bidder, irrespective of other considerations.
17. If no proposal achieves that "All Yes" position, even after further negotiations have been exhausted and the Authority has considered carefully to see whether its fallback position with regard to any sticking points could be further relaxed, then it must be concluded that a PFI deal is not workable. Depending on the reasons for the failure, it may be that it is not possible to proceed with the procurement at all.
18. Notwithstanding the above, it is possible to continue work with only one bidder despite the failure of all the proposals from achieving the "All Yes" marking. This is when a preferred bidder (and a reserve bidder if feasible) is formally nominated so that the Authority can concentrate on only one bidder and continue negotiating and exploring the transaction to see if an acceptable deal could be struck. However this should be seen as very much a sub-optimal position, is not considered good practice where a competition has been run, and is only credible for short periods. The chances of completing the deal are clearly reduced as the majority of competitive pressure needed to resolve issues in a reasonable timescale have been lost. In practice the consequences of this option are very close to those resulting from the premature selection of the preferred bidder.
KEY POINTS
• Negotiations with a preferred bidder should not involve any points of substance, or any issues going to price.
• The preferred bidder should not be selected until that proposal achieves an "All Yes" marking against the eight criteria.
• A clearly defined work package should be instigated to enable an "All Yes" marking to be achieved by at least one, and ideally at least two, bidders. This should include a consideration of Authority's fallback positions.
• Only proposals that achieve an "All Yes" marking should be considered for down-selection to preferred bidder, irrespective of other features such as technical merit or low price.