For likely PPPs, Responsible Agencies, in consultation with NSW Treasury, and consistent with the probity framework, may conduct a market sounding or similar interactive process as early as the Business Case or Procurement Strategy stages or prior to EOI issue. Market soundings are particularly useful if a project is likely to be suitable for PPP procurement or for very complex projects.
Market soundings should be conducted as a genuine opportunity to receive input from the private sector to:
■ establish private sector interest
■ help develop key project objectives taking into account Government priorities (to be used consistently throughout any tender process)
■ help inform project and service scope
■ help inform, develop and resolve complex design, engineering and commercial risk allocations and mitigations, which may include feedback on any proposed Conditional Debt Pay Down (CDPD) structure.
■ The level of input received from the private sector will depend greatly on the stage of project development and the amount of detail that Responsible Agencies can provide.
In conducting a market sounding, Responsible Agencies should ensure that they:
■ have prepared a Market Communication Strategy (refer section 5.4)
■ have clear objectives regarding the outcomes of the market sounding process and communicate these objectives to the potential bidders
■ provide information on the status of the project (e.g. Business Case phase, to communicate that a procurement decision has not been made)
■ do not raise expectations regarding the project if they have not received approvals for Government funding or procurement strategy
■ use the opportunity to inform the development or revisions to the Market Communication Strategy to be used during any tender process
■ have potential bidders sign a confidentiality deed poll.