14.2  Objectives of the interactive tender process

One of the main differences between PPP projects and a traditional procurement approach such as 'design and construct' is that government aims to transfer whole-of-life asset condition risk and fit-for-purpose risk to the private sector. The private sector party has outputs to be met for the term of the project, but retains responsibility for determining the most suitable method to deliver the facility and services.

A key objective of the ITP is to improve the quality of proposals, and ultimately deliver better outcomes for government.  The quality of proposals are improved where they:

•  meet the requirements of the RFP;

•  are developed with a full understanding and appreciation of the government's expectations; and

•  are affordable for government.

The ITP provides an opportunity for an appropriate amount of direct interaction between government and the private sector during the RFP phase of the project. Individual bidders have an opportunity to discuss the development of their proposals, including the commercial and technical aspects, and to seek clarification and feedback in the context of the RFP and government's expectations and requirements.

Although the RFP will contain detailed information regarding government's requirements and expectations, experience on previous PPP projects suggests that it is difficult in words alone to explain fully the commercial and functional requirements of a project.  Furthermore, bidders often misinterpret government's requirements.  Where this occurs, government is placed in a difficult position of either having to go through a further bidding phase to address the shortcomings or having protracted negotiations with the preferred bidder in circumstances where much of the competitive tension has been lost. These are not attractive options as they undermine government's objectives of minimising cost and time and securing value for money through maintaining competitive tension.