Private investors may be reluctant to submit unsolicited proposals if the proposal will be subject to competition, and if it is not clear how any intellectual property or commercially-sensitive information will be protected during the bidding process.
There are different approaches to dealing with intellectual property in an unsolicited proposal, which may depend on the nature of the proposal. For example, the UNCITRAL Legislative Guide for Privately-Financed Infrastructure Projects section on unsolicited proposals [#259, pages 91-97] describes two options:
• Where possible, the government can competitively tender the project, by specifying required outputs, and not the required technology to deliver those outputs. This approach is consistent with good practice in defining output-based performance requirements for PPPs (see Section 3.4.1: Performance Requirements)
• In cases where intellectual property is crucial to the project, such that it could not be implemented otherwise, the UNCITRAL guidance suggests direct negotiation may be warranted, along with procedures to benchmark project costs.
The Government of New South Wales in Australia provides guidance for practitioners on handling intellectual property [#17], which follows a similar approach to UNCITRAL, allowing direct negotiation of the PPP in certain circumstances. The Partnerships Victoria Practitioner's Guide [#19] also provides guidance, and takes a slightly different approach. Proponents agree must identify any intellectual property they wish to protect (subject to agreement with government). The project is then tendered based on output specifications without revealing technology information if possible. If the intellectual property is "crucial to the existence of the service need", the government negotiates with the proponent to obtain the rights to the necessary intellectual property, before procuring the project competitively.