The bid package, contracts, and any marketing documents as well as protocols for communicating with the public and potential bidders need to be developed. The starting point in the actual procurement process is the public notification of the opportunity and the prequalification of bidders. As seen in section 7.3, different procurement methods entail different activities, but a prequalification process is common to many PPPs.
Under this process, an official notification is placed in local and international print and electronic media, advising the public of an opportunity to participate in the project. The content of the advertisement depends on applicable procurement rules. Companies are invited to request a prequalification package and seek access to further information.
An important aspect of information dissemination is the establishment of a data room (see Box 14 for a sample index). Prequalified bidders are invited to use this centralized repository of all information related to the PPP project, which is to be available to potential bidders. The information should be organized according to topics and as detailed, and granted equally and fairly to bidders. During a transaction, the room will be staffed by an attendant and bidders must sign and submit to data room rules (e.g., regarding access times, making photocopies, using other technical equipment, etc.). The amount of time and effort required to populate a data room should not be underestimated. Although the accuracy and completeness of the data in the data room are normally not guaranteed, the process organizers and the government nevertheless need to ensure that the data are not false or misleading. Bidders typically apply a degree of skepticism to the veracity of the data; nevertheless, they will question the seriousness of the process if very little data are available.
Prequalification ensures that only bidders with the minimum required expertise and financial strength are able to bid for the opportunity. This saves the government from the need to eliminate more rigorously from an overly large pool of bidders later in the process. It also encourages bidders that they will be included among a smaller number of equally capable competitors.
The prequalification documents usually contain:
• project information, such as the key characteristics of the project and the operating context (such as an information memorandum);
• instructions to bidders outlining the anticipated bid process and evaluation criteria; and
• a list of the documents required of the prospective bidders to demonstrate their suitability for the project.
Box 14: Sample Data Room Index |
|
General | Commercial Contracts |
I.1 Economic Data (time series) | III.1 Outsourcing Agreements |
I.1.a Gross domestic product (per capita) | Human Resources |
I.1b Inflation index | IV.1 Staff Breakdown Chart by Region and Function |
I.1.c Wholesale price index | IV.2 Current Staff Salary Levels |
I.1d Real and nominal interest rates | IV.2 Collective Bargaining Agreements |
I.1.e Census or population data and growth Rates | Engineering and Technical Documents |
| V.1 Operations and Maintenance |
I.2 Institutional | V.2 Investment Programs |
I.2.a Annual reports (time series) | V.2 Demand |
I.2.b Donor and consultants' reports | V.2 Fixed Assets & Technical Audits |
| V.5 System Files and Drawings |
| V.6 Others |
I.3 Geographical |
|
I.3.a Map of country | Financial |
I.3.b Maps of service areas | VI.1 Financial Statements |
| VI.2 Budgets |
Legislation and Regulations | VI.2 Debt |
II.1 National | VI.3.a Profile of loans/grants |
II.1.a Constitution | VI.3.b Loan disbursements, repayments, |
II.1.b Civil Law |
|
II1.c Public Health Ordinance | and interest |
II.1.d Food and Drug Act | VI.4 Commercial |
II1.e Planning Act | VI.4.a Billings |
II.1.f Lands Act | VI.4.b Collections |
| VI.4.c Breakdown of consumers by category |
II.2 Resources Management |
|
II.2.a Environmental Protection Act |
|
II.2.b Others | Tariffs |
| VII.1 Approved Tariff Structure |
II.3 Corporate/Commercial | VII.2. Tariff Adjustment Proposals |
II.3.a Companies Act |
|
II.3.b Income Tax Act | Special Matters |
| VIII Subsidies, Community Service Obligations, etc. |
II.4 Infrastructure Specific |
|
Source: Kathleen Booth and Heather Skilling. 2007. |
|
In response, the prospective bidders submit information including:
• legal status of bidding entity;
• experience on comparable projects (including any relevant subcategories in terms of size of project, region, particular expertise);
• financial status/resources of bidder;
• ability to raise financing; and
• staff and resources to be directed toward the project.
A predetermined scoring matrix should facilitate assessment of the prequalification applications. The matrix sets out each criterion to be scored, the score assigned to each, and the respective weighting. The matrix can include special criteria such as expertise in servicing low-income customers or may prioritize local bidders if desired. It is important to be realistic about the potential pool of bidders and set the threshold sufficiently high to discourage nonserious or unqualified bidders, while maintaining a pool of bidders large enough for effective competition. The prequalification results in a short list of bidders invited to respond to the bidding package. Generally, a short list of between 3 and 5 companies is a manageable and competitive size.