3. Once an IPT has selected its preferred bidder the endgame of the procurement process begins in earnest. There are three main players involved during this stage - the Authority, the preferred bidder and the lenders. Each of these players will have separate technical, financial, insurance and legal advisers. Aside from the three main players and their advisers there are a range of other interested parties who must also be kept in the loop on progress (and may ultimately be involved in any final approval process or require consultation) - the Treasury, the NAO, customers, DPA PPFI and unions. In order to satisfy the sometimes competing needs of all these parties it is therefore vital that the IPT grips and understands the processes involved from the outset. There is a logical order to events which is in large measure determined by the lenders' requirements.
4. The IPT cannot manage this process alone but it should be play a key role in orchestrating the combined activity of the main players. Appendix 1 sets out an indicative time line of the key outputs and processes that need to be achieved in order to achieve contract award. This time line assumes that there will be no funding competition (the majority of projects so far completed have not involved funding competitions although this may change on certain commoditised accommodation or well understood equipment projects in future) and that bank as opposed to bond finance will be raised. It looks at what activities need to be undertaken and in what order. The time line is not however a prescription. Each IPT will need to scope and develop its own equivalent in conjunction with its advisers and the other main players as early in the process as possible - perhaps generating a gantt chart using appropriate project-planning software. The reader of this guidance may, however, find it useful to have Appendix 1 to hand whilst reading the text.
5. The preferred bidder stage can be broken down into four broad steps:
• consolidation of the deal and documentation developed with the preferred bidder;
• evaluation and due diligence on that deal and documentation by the lenders;
• negotiation on points raised by the lenders leading to commercial close with all parties; and
• financial close.
6. Elements of the first two steps will probably overlap, but the more the IPT and its preferred bidder have agreed prior to lender involvement, the better.
7. The IPT is more likely to be exposed to an extended preferred bidder stage and uncompetitive re-pricing if it has inadequately managed the process leading to appointment of preferred bidder. No IPT will get everything right all of the time but most could manage the process better. The following section details key flaws that are common to many teams at this stage of a procurement. They are not set out in order of importance and will often overlap. The number of such flaws that become apparent is a fairly accurate indicator of the likely length and difficulty of the negotiation ahead.