10. Tender process requirements
The Victorian Government is committed to reducing bid costs for all PPP projects. Procuring Agencies should continue process improvements, including minimising information requirements for bidders, short listing only two bidders where appropriate and minimising the use of best and final offers processes in PPP projects where possible.
Reimbursement of bid costs
Victoria will trial payment of partial bid costs for PPP projects. It will be used for projects where it will maximise competition by incentivising stronger market responses and attracting better quality bids. The amount of reimbursement will be determined on a project specific basis and will involve partial payment to losing bidders in return for intellectual property where appropriate. The approach for reimbursement will be communicated to bidders upfront at the time of the EOI release and will be funded as part of transaction costs in the business case.
Procuring Agencies should consult with DTF on the potential application of this trial for specific PPP projects.
All Victorian Government tenders, including the Expressions of Interest for PPP projects, are to be advertised on the Victorian Government Tenders Website www.tenders.vic.gov.au in accordance with the requirements of the Victorian Government Purchasing Board www.vgpb.vic.gov.au.
RFP release requirements
The RFP document is to include comprehensive contractual documentation. The issue of the contract as part of, and concurrently with, the RFP, ensures that all shortlisted parties are aware of, and have enough opportunity, to consider the specific contractual terms that government is seeking. It also limits subsequent negotiations to clearly identified and fully drafted departures. The RFP normally includes a statement indicating that government may entertain variations from the contract in nominated areas.
PPP projects must also comply with requirements of the Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry.
RFP submission requirements
As part of the RFP response, bidders should be asked to submit a fully marked up contract and schedules. Term sheets are sufficient for some of the sub-contracts. While this does consume legal resources at the bidding stage, it leads to a more efficient negotiation stage.
As part of the RFP response, bidders should be asked for evidence of committed finance at bid submission, unless specific project circumstances deem otherwise. This usually takes the form of commitment letters from the providers of both debt and equity. For debt, this is likely to be a firm credit approval or term sheet signed by authorised officers, with clearly defined conditions which government can assess and evaluate. For equity, a demonstration of Board commitment and funding capacity would be required.
The specification of a Complying Proposal should be made and assessed in accordance with project evaluation requirements in the RFP and the project teams' evaluation plan. The evaluation plan will need to address how:
- to evaluate how well each bid meets the requirements of the RFP and contract (this involves the project team ranking criteria and outlining how to deal with legal and commercial evaluation and design and service criteria); and
- to evaluate any additional features or enhancements offered
The Victorian Government Industry Participation Policy (VIPP) applies to all PPP projects. Bidders will be asked to respond on this matter in accordance with the policy requirements that are available at www.dbi.vic.gov.au. PPP projects must include tender submission requirements in accordance with the Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry. Further information, templates and draft contract clauses are available from the Victorian Construction Code Compliance Unit in DTF via www.dtf.vic.gov.au/viccode.
Taxation rulings are not typically required at the bid submission stage, however where concerns regarding tax exist, Procuring Agencies may consider a requirement for a tax ruling as a conditions precedent to financial close. The RFP should indicate the Government may require this. Procuring Agencies are to consult DTF on taxation issues.
Interactive tender process
Victorian PPP projects are to incorporate an interactive tender process into the procurement process. This is to be done in accordance with the National PPP Guidelines Volume 2 Practitioner's Guide, Appendix E and additional material available on the Partnerships Victoria website.