Project Management · 2016. 2. 18. · Project Management of Public Private Partnership (“PPP”) projects. The purpose of this Guidance Note is to outline the recommended structures

Department of the Environment and Local Government Project Management

Project Management

Public Private Partnership Guidance Note 7

14 April 2000

Guidance Note 7 14 April 2000


Contents

Section Page

I INTRODUCTION ........................................................................................................................................ 1

SCOPE AND PURPOSE OF GUIDANCE ................................................................................................................... 1 STRUCTURE OF GUIDANCE NOTE........................................................................................................................ 1 PUBLIC PRIVATE PARTNERSHIP ROUTE MAP ...................................................................................................... 2

II BACKGROUND .......................................................................................................................................... 4

INTRODUCTION ................................................................................................................................................... 4 LINK WITH PPP ROUTE....................................................................................................................................... 4 PROJECT MANAGEMENT IN PPP PROJECTS......................................................................................................... 4

III OVERVIEW OF PROJECT MANAGEMENT............................................................................................ 6

EXISTING PROCEDURES ...................................................................................................................................... 6 EXISTING STRUCTURES....................................................................................................................................... 6

IV PROJECT ORGANISATION....................................................................................................................... 8

INTRODUCTION ................................................................................................................................................... 8 STEERING GROUP ............................................................................................................................................... 8 PROJECT MANAGER.......................................................................................................................................... 11 PROJECT TEAM AND RESOURCES...................................................................................................................... 15 EXTERNAL ADVISERS ....................................................................................................................................... 16

V PROJECT INITIATION ............................................................................................................................. 19

VI CONCLUSIONS AND RECOMMENDATIONS...................................................................................... 21

APPENDICES ...................................................................................................................................................... 22

A. PUBLIC PRIVATE PARTNERSHIP POLICY FRAMEWORK ............................................................................ 22 B. OUTLINE PROJECT INITIATION DOCUMENT ............................................................................................. 24 C. ROLE OF ADVISERS ................................................................................................................................. 26



I Introduction

Scope and Purpose of Guidance

1.1 This Guidance Note provides guidance for Central and Contracting Authorities on the Project Management of Public Private Partnership (“PPP”) projects. The purpose of this Guidance Note is to outline the recommended structures and techniques to be used in managing projects in the roads, water and waste sectors that are being procured using the Public Private Partnership approach.

1.2 This Guidance Note is one of a series of Guidance Notes which provide contextual information on Public Private Partnerships and procedural guidance for Central and Contracting Authorities covering each stage in the development and implementation of infrastructure projects using the Public Private Partnership approach. The titles of all of the Guidance Notes are set out in Appendix A to this Guidance Note.

1.3 The Guidance Notes are designed to be informative rather than prescriptive and the aim is to reflect good practice. They are generic in that they provide guidance on the use of Public Private Partnerships across a range of projects in the roads, water and waste sectors. However, different projects will give rise to different issues and the guidance provided will have to be reviewed in the context of each individual project. For this reason it is important that Central and Contracting Authorities obtain expert advice to help them to make best use of the Guidance Notes and to complete a successful Public Private Partnership procurement.

Structure of Guidance Note

1.4 The Guidance Note is structured as follows:

• Section Two – introduces the two phases of management on Public Private Partnership projects, and explains the distinction between project management phase and contract and performance management;

• Section Three - examines the existing structures and procedures that are currently used for projects in the roads, water and waste sectors, in order to provide a background against which the approaches to project management on PPP projects can be compared;

• Section Four – describes the requirements of the project organisation, including the roles and responsibilities of the Steering Group, the Project Manager, the Project Team and the external advisors;

• Section Five – sets out the recommended the approach to project initiation, and examines the format and content of the Project Initiation Document.

1.5 The final Section provides a summary of the main issues and recommendations that are identified and discussed within this Guidance Note.

1Guidance Note 7 14 April 2000


Public Private Partnership Route Map

1.6 The process of project development and implementation changes significantly when a project is taken forward as a Public Private Partnership. For this reason a Public Private Partnership Route Map has been developed.

1.7 The Public Private Partnership Route Map sets out the main stages in the development and implementation of a Public Private Partnership project that must be undertaken by the Central Authority or the Contracting Authority. The Route Map is presented in the diagram shown overleaf.

1.8 The Public Private Partnership Route Map shows how the traditional processes of project development, procurement and implementation change for a Public Private Partnership project. A more detailed description of the Public Private Partnership Route Map is provided in the separate Guidance Note entitled Introduction to Public Private Partnerships.

1.9 This Guidance Note reflects the “Best Practice” guidelines that have been approved by the Cabinet Committee on Infrastructural Development and Public Private Partnerships. It should be noted that the process of project management depends somewhat on the choice of procurement method. Guidance on procurement is provided in the separate Guidance Note entitled Procurement Management.



Figure 1: Public Private Partnership Route Map

Project Identification

Project Appraisal

PPP Assessment

No change toexisting process

Changes toexisting process

New stage forPPP projects

Assessment of PPP Suitability

If PPP recommended

Statutory ProcessAssessment

ProcurementProcedure Selection

Project Management

Stakeholder Consultation

Elements of Statutory ProcessRetained by Public Sector

Tendering Process

Preparation of ContractDocumentation

Statutory Process

Tendering Process


Contract and PerformanceManagement of Construction

and Operation

Elements of Statutory ProcessTransferred to Private Sector

Statutory process risk withcontracting authority

Statutory process risk withprivate sector

Key

Contract Management ofPlanning Phase


and Operation



II Background

Introduction

2.1 Contracting Authorities and Central Authorities already have well-established techniques and procedures for managing the procurement of large-scale infrastructure projects. These techniques need to be adapted somewhat to cater for the technical, legal, financial and long-term, operating consequences of having the private sector involved in PPP projects.

Link with PPP Route

2.2 The Public Private Partnership Route Map, which is presented in Figure 1 above, indicates that the project management structures that are required to procure a PPP project would be established after the Option Appraisal stage, which incorporates PPP Assessment, Statutory Process Assessment and Procurement Procedure Selection. This representation is accurate, since the Central Authority will not approve a project to be procured as a Public Private Partnership until after the Option Appraisal stage is completed. Nevertheless, there must be a strong degree of continuity between the team responsible for the Option Appraisal stage and those ultimately responsible for managing the project through the Procurement stage to the award of contract. It will also be important to integrate this Guidance Note with existing procedures for managing major infrastructure projects.

2.3 The recommended approach to the management of the Option Appraisal stage is set out in Section Two of the separate Guidance Note entitled Public Private Partnership Assessment. Management of the Option Appraisal stage involves specific input from Central Authorities, Contracting Authorities and technical, legal and financial advisers.

Project Management in PPP Projects

2.4 A PPP project requires management in two phases:

• Development phase - where the technical definition, project structuring, statutory processes, stakeholder consultation, and procurement occur; and

• Implementation phase – which follows on from the development phase and commences with construction and commissioning and continues through operation to the end of the contract, typically after some 20-25 years.

2.5 This Guidance Note refers primarily to the project management requirements of the development phase.



2.6 The processes of managing each of the development and implementation phases are very different and can be summarised as follows:

• Project management – this is covered within this Guidance Note, which describes the procedures and organisation required by the Contracting Authority to bring a project from inception through planning, Environmental Impact Statement (EIS), statutory process and completion of the procurement. This mirrors the existing arrangements for management of large-scale conventional projects, but in a PPP context is likely to call for additional expertise, notably in the financial and legal areas; and

• Contract and performance management – this is covered in the separate Guidance Note entitled Contract and Performance Management, which describes the procedures and organisation required to oversee the construction and commissioning of the asset, and delivery of the service in accordance with the Contract. This includes performance monitoring, certification of payments in accordance with the contract terms, dealing with changed conditions, underperformance, Contracting Authority reporting and management of Contracting Authority/Contractor interfaces. This will require specific organisational changes affecting Contracting Authorities responsible for PPP projects.

2.7 Some degree of overlap between project management and contract and performance management functions is likely and desirable. This is because decisions that are made during the project management phase have long-term implications over the life of the PPP project. For example, it will be important to ensure that the rationale for taking a particular approach to the structuring of a contract is reflected in how the contract is operated (see the Guidance Note entitled Contract and Performance Management).



III Overview of Project Management

Existing Procedures

3.1 There are well-established procedures for the implementation of major infrastructure projects, which differ slightly between the roads, water and waste sectors. For road projects, these are documented in formal guidance published by the National Roads Authority. For water services, they are set out in a series of circulars issued by the Department of the Environment and Local Government.

Existing Structures

3.2 In overseeing these processes, the following project management arrangements are in place:-

• Lead Authority - Contracting Authority undertaking the project on its own behalf or on behalf of a number of Local Authorities;

• Project Engineer/Project Manager – Early in the life of the project, the Local Authority should nominate a Project Engineer to oversee the advancement of the project. For some major projects, Project Managers have been appointed. The responsibility of the Project Engineer/Project Manager is to co-ordinate the implementation of the project including oversight of budgets, public liaison, Central Authority reporting and management of consultants;

• Steering Group - comprising representatives of relevant Local Authorities (Technical & Administrative), representatives of Central Authority, and the Project Engineer/Project Manager. Consultants attend at Steering Group Meetings on request, and may not be present for all discussions. The Steering Group oversees the project implementation, acting as a clearing house for issues as they arise and generally facilitating the formal decision-making process by the Central Authority or Contracting Authority Manager. The Steering Group typically meets quarterly, or as key deliverables become available;

• Technical Steering Group (Project Team) - comprising the technical representatives only. This group generally meets at more frequent intervals in order to review technical issues as they arise and determine the preferred approach based on studies and technical reports developed by the Project Team. For national roads projects, a certain amount of design work, and increasingly project management tasks, are carried out by regional design teams. For water services and waste, there is a strong reliance on private sector consulting engineering firms to provide technical advice and progress projects through the design and planning stages. In a PPP context the technical steering group would have a broader skills base and be known as the ‘Project Team’; and



• Technical advisers – A consultant team appointed by the Contracting Authority to carry out the work defined in the project brief, reporting to the Project Engineer, Steering Group and Technical Steering Group, including preparation of progress and technical reports. Technical advisers may be appointed for the duration of a project or separately for the separate phases. Currently, in road projects, it is normal to make an overall appointment for the duration of the project (to avoid later procurement delays), with task definition and scope of services agreed in phases, beginning with planning, EIS and statutory process. In water services and waste projects, separate appointments are made in respect of planning, EIS and subsequent stages. The Project Engineer/Project Manager and Steering Group play a key role in the development of a project brief, procurement and management of technical advisers.

3.3 The procedures and project management structures currently employed for major projects, as set out above, are reviewed in this document to assess how they could be adapted to PPP projects.



IV Project Organisation

Introduction

4.1 Project Management for PPP projects should be built on, and integrated with, the procedures that are already in place for managing infrastructure projects. The organisation of a PPP project centres on four main elements, namely the Steering Group, the Project Manager, the Project Team (in place of the traditional Technical Steering Group), and the advisers. An indicative project organisation chart and reporting channels are as set out below:

Steering Group

4.2 A Steering Group is necessaryof the existing arrangements aContracting Authority, other LManager. Technical advisersGroup meetings as required.

Guidance Note 7

Steering Group
Project Manager
Project Team

A
TechnicalAdvisers
fondocw

Financial Advisers

r all major PPP projects. Th include representatives of thal Authorities involved in theould be required to attend a

14 April 2000

Legal dvisers

Contracting Authority

Central Authority

is will be along the lines e Central Authority, the project, and the Project t and report to Steering

8


4.3 The role of the Steering Group is to consider, analyse and resolve the range of complex issues, which arise in the course of the planning and implementation of a PPP project, subject to formal approval by the Central Authority (or the Contracting Authority, where appropriate) at the appropriate stages. Among the tasks to be undertaken by the Steering Group are:-

• to review the Project Initiation Document (see Section Five of this Guidance Note) and authorise the initiation of each project stage;

• to review the scope and boundary of the project;

• to review briefs and budgets, and to direct the procurement and appointment of technical advisers, specialists and Contractors, in accordance with Central Authority approvals and guidelines;

• to resolve procedural issues and manage the agreed work programme;

• to ensure that the business and technical integrity of the project is maintained;

• to review the programme and resource plans prepared by the Project Manager and incorporate those of the technical advisers;

• to guide and direct the Project Manager and Project Team as required;

• to define and oversee the level of consultation and communication with key project stakeholders, including elected members, relevant bodies and the public, and to contribute to its effective delivery;

• to review the implementation programme, project resources and budget updates on an ongoing basis, including actions required to meet objectives, and the need for additional Central Authority approvals, ensuring that project outputs are supplied within agreed cost, time and quality constraints;

• to review issues arising from the project in relation to planning, legislation and regulations, land and wayleaves procurement and statutory process generally;

• to review and direct the arrangements for the selection of the Contractor, from Official Journal of the European Community (OJEC) Notice, to pre-qualification of bidders, to invitations to tender, to evaluation of tenders, through to the selection of the preferred bidder; and

• to review arrangements for contract signing, including insurance and bond, supervisory staff, and contract and performance management functions.



4.4 The Steering Group should consist mainly of people who have a genuine interest in the project and are able to direct the work and facilitate formal decisions relating to the project, and are committed to seeing the process through to completion. The Steering Group could be selected on the basis of the following guidelines:

• membership should be compatible with the nature of the decisions that need to be made and should include both technical and administrative personnel;

• the Steering Group should include senior members of the organisation in order to demonstrate high level commitment to the project, and

• membership should be confined to public bodies with responsibility for aspects of the project, apart from external advisers.

4.5 The Steering Group should be established once the project has been formally approved as a PPP project. The membership should be agreed by the Central Authority, the Contracting Authority and other Local Authorities involved at an inaugural meeting. The nomination of the Project Chairman and the minutes Secretary should also take place at the inaugural meeting.

4.6 The Project Chairman is responsible for the workings of the Steering Group, and ensuring that the project is ultimately delivered. The Quality Assurance Team is a sub-group of the Steering Group and is responsible for ensuring that the project is delivered to the agreed quality standard.

4.7 Where the PPP project is part of a larger scheme, and other elements of the scheme are being delivered through traditional methods, the remit of the Steering Group should be capable of having responsibility for all aspects of the scheme. Similarly, a Steering Group may cover a number of projects, both PPP and conventional, where appropriate.

4.8 Examples of the composition of Steering Groups for projects in the relevant sectors might be as follows:

Guidance

Roads

Local Authority Representative(s)

NRA Representative(s)

Project Manager

Client Representative, (Technical, Legal, Financial) where appropriate

Note 7 14 April 2000

Waste and Water

Local Authority Representative(s)

DOELG Representative(s)

Project Manager

Client Representative, (Technical, Legal, Financial) where appropriate

10


4.9 The frequency of Steering Group meetings will depend on the stage of the project. In the early phases, during the Project Appraisal and Statutory Process stages, meetings might be less frequent, typically quarterly, but with written monthly updates from the Project Manager. During the Procurement stage, when many of the critical commercial issues are considered, Steering Group meetings may be required as frequently as once per month.

Project Manager

4.10 The role of the Project Manager is to manage and co-ordinate the decision-making by planning an appropriate process and setting up systems for providing information to the Steering Group. The Project Manager will have primary ownership of the project within the Contracting Authority and will drive the project within that body, arranging for rapid policy decisions, implementation of procedures, and harnessing the internal resources required for the project.

4.11 The Project Engineer is generally appointed early in the life of a project. For PPP projects, there will be a need for a dedicated Project Manager. The appointment of the Project Manager should take place once the project has been formally approved as a PPP project, and the Steering Group has been appointed. In many cases, the Project Engineer will become the Project Manager, and take on the role in a full time capacity.

4.12 Where the project is sufficiently large or complex, the Project Manager is likely to be engaged on a single project on a full-time basis. Depending on the scale and complexity, the Project Manager may require support at peak times in the project (e.g. start up) and should have substitute arrangements in periods of absence. A full-time Project Manager is required for major contracts involving complex technical, as well as legal and financial issues. In general, such projects are likely to be of significant value (IR£20m plus). Where circumstances allow, the Project Manager may oversee a number of projects with similar characteristics, provided adequate assistance is provided. Some more modest projects may be managed in conjunction with related projects being procured in a conventional manner.

4.13 The Project Manager co-ordinates the work of a set of technical, financial and legal advisers (some or all of whom could be external advisers).

4.14 The Project Manager oversees the day-to-day management of the project and the main responsibilities are:

• defining the scope of the project and the proposed phases of project activity;

• preparing the Project Initiation Document and agreeing it with the Project Steering Group;

• preparing the detailed Project Plan and agreeing it with the Steering Group;

• defining the objectives and responsibilities of each member of the Project Team;



• setting work plans for each member of the Project Team and reviewing output quality;

• updating the detailed Project Plan and presenting regular reports to the Steering Group;

• liaising with professional advisers and related projects to avoid omissions and duplications;

• monitoring project progress and ensuring the delivery of all project outputs as planned;

• advising the Steering Group of deviations from the Project Plan and initiating corrective action;

• liaising with the Quality Assurance Team, which would guarantee the overall quality and integrity of the project; and

• preparing the project evaluation review after the closure of the project.

4.15 Another important role of the Project Manager will be to ensure that the objectives of the project are clearly communicated to the general public and the opinion formers generally. These communications can be handled by the Project Manager, or a dedicated ‘project champion’ in order to ensure that the benefits of the project are widely understood.

4.16 The Project Manager, who can be recruited internally or sourced externally on a contract basis, facilitates the communication and information flows between the parties. Given the need to integrate the various departments of Local Authorities as well as other public bodies, the Project Manager should ideally have a good working knowledge of the public sector systems and procedures, therefore it is recommended that the Project Manager is recruited from within the Public Service.

4.17 The volume of work envisaged in the National Development Plan 2000 - 2006 will make significant demands on Local Authority resources in terms of providing project management personnel of adequate experience and expertise. There is already evidence of difficulty on the part of the some Local Authorities in recruiting and retaining resident engineering staff in temporary grades in accordance with existing procedures. The National Roads Authority has developed Regional Offices whereby projects in a number of Local Authorities can be centrally managed and planned. A similar pooled approach might be considered for major water and waste management projects. This approach could facilitate establishment of permanent grades, which would contribute to accumulation of the experience and expertise necessary for these complex projects. A similar approach may be necessary to cater for contract and performance management.



4.18 In managing the decision-making process, the Project Manager needs to undertake several tasks. These are listed in the paragraphs that follow, together with notes on some of the issues relating to them.

4.19 The Project Manager must establish a list of the decisions that the Steering Group is expected to make. The Project Manager needs to ensure that this list is agreed with the Steering Group, and that the list becomes the basis for establishing the data needed for consideration of each issue, and deciding on the reports that are to be delivered. This process helps the Project Manager to decide on any specific processes that would help the Steering Group in considering these issues.

4.20 A critically important task is the planning of the timetable for the entire process. This can be done using simple diary-type planning, but this may not fully reflect the extent of interaction of activities. A task definition, which provides a logical sequence of steps, is required with a realistic timeframe allocated to each task. Techniques such as critical path analysis, which are more sophisticated and have a proven track record in project management, are very desirable to ensure that the programme is robust and viable, by identifying the interdependencies between tasks and the consequences of slippage on individual task timetable.

4.21 The plan should be based on measurable milestones so that the Project Manager is able to monitor progress. Experience in project management and planning suggests that:

• the plan can be difficult to establish, with key tasks often impacted upon by third parties, and so are not fully within the contracting authority's control;

• in the early stages, the Project Manager needs to spend a lot of time working on the plan;

• the milestone elements of a plan should be developed at an early stage, and appropriate deliverables defined, review periods agreed with the Steering Group and critical dates set;

• it is important to recognise that it may not be possible to plan in detail the sequence of activities relating to later processes;

• the Project Manager should be guided by current experience on timescales for each phase, and to allow appropriate levels of contingency in the timetable; and

• the plan should be communicated to all participants.



4.22 The Project Manager should seek the Project Team's agreement to the plan and this agreement should be communicated to all concerned. It is important to allow sufficient time for agreeing and communicating the plan. This agreement should be sought at two levels:

• Firstly, among team members through discussions, meetings, and circulation of drafts, so that their views and experiences can be considered; and

• Secondly, in a formal manner at an early Steering Group meeting where the Project Manager tables the decision to endorse the process.

4.23 The Project Manager should establish procedures for communications between all parties to the project, establish points of contact within relevant authorities, establish the extent of circulation of documentation, and establish the format of reporting including scope of electronic, facsimile and formal hard-copy communications.

4.24 Quality assurance considerations dictate that the Project Manager put in place arrangements for assuring the quality of the process. This includes the following arrangements:

• review and audit procedures to evaluate the work of technical, financial and legal Advisers and individual Project Team members; and

• a system of quality assurance, implemented through the Steering Group and Technical Steering Group review process, where the work of each person is reviewed and challenged by others.

4.25 The methods of quality assuring the project management of these projects include:

• comparison of technical work done with appropriate standards, guidelines and policy documents, Central Authority circulars and available technologies;

• comparison of the project timeplan in the Project Initiation Document with milestones achieved to date;

• comparison of costs incurred on an ongoing basis with the budget agreed in the Project Initiation Document;

• comparison of individual team member performance with deliverables and responsibilities set out in the Project Initiation Document; and

• comparison of the quality of the output being obtained by the public sector with the requirements of the Output Specification.

4.26 The quality assurance function needs to be a planned process and the result of any review work should be documented on the project files. The Project Manager reports to the Quality Assurance Team on the outcome of the quality assurance arrangements set out above.



4.27 The Project Manager should also establish arrangements for controlling the costs of the procurement exercise, by setting clear parameters for the project, such as:

• setting budgets for consultants and advisers, together with appropriate contingency levels;

• establishing terms of reference for the appointment of advisers that reflect as fully as possible the scope of work required of them, enabling realistic budgets to be agreed; and

• preparing an analysis of internal resource requirements and planning the required inputs accordingly.

4.28 The procedures governing the appointment of Consultants to the Civil Service is set out in Guidelines for Engagement of Consultants in the Civil Service (Department of Finance, March 1999). Appointment of Consultants by local authorities is covered by the Government Guidelines on Public Procurement (1994 Edition) also issued by the Department of Finance. In choosing advisers for PPP transactions, the tender chosen will be the most economically advantageous, with cost only as one of the criteria and having due regard to the importance of quality criteria to the success of the project.

4.29 The Project Manager should establish arrangements for maintaining the audit trail for documents, analyses and decisions. This will include regular formal reporting to the Steering Group and Technical Steering Group, minuting of all meetings, etc.

4.30 The Project Manager should monitor the progress of activities and review or adjust the project plan accordingly. This should be done in a forward-looking manner, checking the impact of progress to date on the achievement of future milestones. Any amendments to the process need to be presented to the Steering Group and need to be agreed.

Project Team and Resources

4.31 In order to assist him in managing these activities, the Project Manager will require administrative support. Depending on the scale and complexity of the project, the formality of the systems, and the remit of the Project Manager, this support can vary from a part-time secretary, to perhaps two or three full-time support staff with different skills and qualifications.

4.32 In addition, the Project Manager needs to pay attention to ensuring that the administrative side of the project, both in terms of facilities and procedures, is properly resourced. A checklist of procedures to be followed should be made drawn up and made available for guidance. Procedures for reporting to the Steering Group should be established. Local Authorities have administrative structures in place, which may need strengthening to accommodate the demands of an increasing number of major capital projects.



4.33 The Project Team draws on different departments within the Contracting Authority including:

• Law Agent (in-house or external), who may seek external assistance where necessary;

• Valuers Department in relation to negotiation of land and wayleave acquisition. Again, this department may need external assistance where the volume of work in a project exceeds the in-house capacity;

• Development/Planning Departments in relation to land-use planning, zoning and strategic vision of the Authority, which may impact on the project;

• Roads, Sanitary Services and Waste/Environment Departments both in relation to the service needs to be satisfied and interaction with existing or proposed infrastructure or services; and

• Personnel Department, in relation to the recruitment of staff, remuneration and other employment issues, and redeployment or work practice implications of the PPP project.

4.34 For PPP projects, the Project Team will work closely with the Consultants appointed to advise on the project, the Clients Representative. The Project Manager will be responsible for directing and managing the Consultants engaged on the project, reviewing technical reports and administering budgets.

4.35 PPP projects involve a range of skills and knowledge, both in terms of the PPP process itself and the specialist skills involved. It is recommended that a critical mass of contract and project management skills and knowledge needs to be retained and utilised in the public sector. Contracting and Central Authority personnel, who are involved with PPP projects, should receive specialised training in these processes and skills in order to be properly prepared to discharge their duties.

External Advisers

Appointment of Advisers

4.36 The range of advisers that the Project Manager may require clearly has to match the technical, financial and legal content of the project, and the nature of the services that are being procured. The advisers must be capable of supporting the Project Manager in the tasks listed above. A summary of the role of each of the advisory disciplines, at each stage of the PPP process, is set out in Appendix C.

4.37 In selecting advisers, the experience that the firms, and the nominated individuals, have in dealing with PPP projects is vital. Experience in the relevant technical and statutory processes is also essential. The bigger and more complex the transaction, the greater the need for experienced advisers. Technical, financial and legal advisers, who are inexperienced, may require a learning curve leading to timeline and cost inefficiencies.



4.38 The complexity and timescales of PPP projects means that it will be very difficult to define a role for advisers for the duration of an individual project, at the commencement of the project. For this reason, it is recommended that the procurement of advisers take place in two separate stages, firstly for the Option Appraisal stage, and secondly for the Statutory Process and Procurement stages.

4.39 In some instances, particularly for the proposed pilot projects, where it is known that the PPP approach is to be adopted in advance of a formal PPP Assessment, the appointment of advisers may take place earlier in the process and they may continue in place until the procurement is completed. This will help to ensure that there are minimum delays in implementing pilot projects (to overcome the fact that the learning curve for early projects will be longer). For the pilot projects, the technical, legal and financial advisers will assist in the preparation of the PPP Assessment. Subject to this exception, the general recommendations on procurement of advisers at each stage of the process is set out in the following paragraphs.

Option Appraisal Stage

4.40 The Project Identification stage concludes with the issue of an approval from the Central Authority to the Contracting Authority to initiate the project and to commence the Option Appraisal stage. The Option Appraisal stage comprises four assessments:

• Project Appraisal;

• Public Private Partnership Assessment;

• Procurement Procedure Selection; and

• Statutory Process Assessment.

4.41 Initially, the Option Appraisal stage is the same for traditional projects and PPP projects, and the Contracting Authority should appoint technical advisers to assist with the Project Appraisal. However these advisers will require wider expertise than under traditional procurement so that they can participate in the other elements of the Option Appraisal stage. The definition of the scope of their role should include working with the financial and legal advisers to the Central Authority on the PPP Assessment (see below).

4.42 As set out in the Guidance Note entitled PPP Assessment, there are a number of specific activities involved in the Option Appraisal stage, and in order to conduct these activities the Contracting Authority will need access to legal and financial advice. These could be provided by the Central Authority on the basis on a general "call down" basis. It is expected that, for most PPP projects, the recourse to this central resource will be limited as an experienced technical adviser should be in a position to carryout the Option Appraisal stage, including the PPP Assessment, and such other PPP related tasks as may be necessary.



4.43 For certain types of projects, the financial adviser may be required to prepare a Financial Comparator, which would be used at the end of the procurement process to determine whether the preferred PPP tender represents value for money. In relation to the preparation of a Financial Comparator, the financial adviser will report directly to the Central Authority. Further details are provided in the separate Guidance Note entitled PPP Assessment.

4.44 A full report setting out the results of the Project Appraisal, PPP Assessment, Statutory Process Assessment and Procurement Procedure Selection will be forwarded to the Central Authority for review and approval. For privately financed projects involving long term commitments for the Exchequer, the Central Authority will approve the project in consultation with the Department of Finance.

Procurement Stage

4.45 The Option Appraisal stage concludes with approval from the Central Authority to proceed with the project, and this approval outlines the preferred form of PPP, procurement route and statutory process route. The Contracting Authority will appoint a Client Representative to represent their interest during the Procurement stage, which includes the development of contract documentation and the tendering process.

4.46 Under conventional procurement, the Client Representative is a technical advisor who calls on other expert advice (including the Contracting Authority's legal adviser) as required. The skills required by the Client Representative to develop a PPP project will depend on the nature and scale of a project. With the exception of the pilot projects, the arrangements for which are set out above, two possible approaches are recommended:

• in order to ensure consistency of advice and the interpretation of standard documentation, the Central Authority may appoint legal and financial advisers who would be made available to Contracting Authority. The Contracting Authority would procure a technical adviser, with appropriate PPP experience, to act as their Client Representative.

• for large, complex PPP projects, particularly those involving private finance, Contracting Authorities may consider it more appropriate to procure advisers from each discipline to form their Client Representative team, on the basis of a competition as outlined previously.

4.47 Where a multi-disciplinary team is required, the competition to appoint advisers can be run separately for each discipline, or can be run as an integrated advisory consortium. While an integrated team may be desirable, separate financial, legal and technical teams may be appropriate initially, in order to ensure the selection of the most qualified advisers in each discipline. As experience is built up and the process of PPP implementation matures, the option of procuring a single integrated team of advisers may be preferable in terms of efficiency and control of the process. Where the client retains qualified advisers in a particular discipline (e.g. legal advisers), it may be appropriate to recruit the remaining services as a single team.



V Project Initiation 5.1 One of the early tasks for the Project Manager is to set up the process for delivering

the project requirements. In order to do so, the Project Manager needs to gain a rapid understanding of the objectives of the project, the programme, procedures for ensuring quality, process for obtaining client and Central Authority approvals, and the various parameters that relate to the project. The objectives should be documented and agreed in the Project Initiation Document. The document will reflect the stages of the project defined in the Public Private Partnership Route Map for each of the sectors.

5.2 The following paragraphs provide set out the parameters that relate to projects in the roads, waste and water sectors, together with notes on issues relating to them.

5.3 The initial tasks in project identification and establishment include:

• an understanding of the definition of the project and the development of the project to date, from Project Identification, through Option Appraisal, including PPP Assessment, Statutory Process Assessment and Procurement Procedure Assessment;

• an understanding of the approval status of the project brief; and

• establishment of the Steering Group and the arrangements for management of the project (Section 59 Agreements where the Lead Authority is to act for other Local Authorities, for example).

5.4 The Project Initiation Document should set out an understanding of the detailed requirements of the project, which will include knowledge of:

• the scope of service delivery and the project brief;

• the size, type and quality of the project;

• the service delivery criteria; and

• the criteria and procedures for the appointment of advisers.

5.5 The Project Initiation Document should provide an understanding of the objectives of the process including details in relation to:

• the overall project budget in terms of capital cost, overheads (land costs, advisers fees, EIS costs, investigations, etc);

• an indicative level of operating costs of the service and value for money criteria;



• the expected timescale for delivery of the project, and an indication as to how critical achievement of this timescale is; and

• quality considerations, both in terms of the service that is sought, and of the process for delivering the project.

5.6 The Project Initiation Document should also provide an understanding of the main risks to the project and any constraints that are likely to be imposed on the project. Typically, this will include areas such as:

• the requirement to comply with statutory process procedures, and the latest PPP guidelines;

• any land restrictions, such as site and wayleave requirements, planning conditions, or compulsory purchase orders;

• the availability of an adequate level of resources, in terms of personnel and skills availability, and the financial capacity to undertake the project; and;

• any constraints or delays arising from the procurement process.

5.7 The technical content of the project will include a range of issues to be examined, options and constraints. This is likely to include a range of statutory and other relevant consultees, the nature and phasing of surveys and investigations (topographical, preliminary and detailed ground investigations, load surveys, traffic flows etc), analysis and project definition. This leads to the development of site/land requirements, budget costs and programme for all stages of planning, procurement and implementation.

5.8 Participants in the project will have priorities and needs to be catered for and dealt with, including for example the interfaces with the Contracting Authority and Central Authority. The role of other statutory bodies such as Dúchas, The Department of the Marine and Natural Resources, or the Environmental Protection Agency, should also be identified at this stage.

5.9 On the basis of the above information the Project Manager should be in a position to map out the process for delivering the project. This should be written up into the Project Initiation Document, illustrating the logic behind the choice of the process.

5.10 The Project Initiation Document should be developed in conjunction with the Project Team and should be agreed, having due regard to the tasks to be carried out, with realistic timescale and resource provisions. The Steering Group should formally review and approve the Project Initiation Document.

5.11 The Project Manager needs to review progress both periodically and at crucial turning points and to modify timescale and resource provisions so as to correspond to the latest knowledge of the project. The programme status should be communicated to the Steering Group at the regular project meetings and approval sought as appropriate.



VI Conclusions and Recommendations 6.1 The key issues arising in connection with the project management of PPP projects are

derived from a combination of the complexity of PPP projects and the volume of projects that are due to be delivered. The conclusions on the key issues that have been identified in this Guidance Note are set out below.

6.2 The need for additional resources, skills and expertise for the project management of PPP projects may require changes in the way in which Local Authorities resource staff to manage projects to provide the necessary skills. It is suggested that a critical mass of contract and project management skills and knowledge be retained and utilised within the public sector. These resources could be pooled and shared between Authorities to suit needs.

6.3 For DBOF projects in particular, Contracting Authorities will require access to legal and financial advisers as well as technical specialists who have been retained for traditional procurements. It is recommended that there be two separate procurements for advisers, the first being for the Option Appraisal stage, and the second for the Procurement stage.

6.4 The project management function for a project should be established once the project has been formally approved as a PPP project. However, the project management structure should be largely derived from personnel who have been responsible for bringing the project from the Project Identification stage through to its approval as a PPP project.

6.5 The role of project management must evolve into or overlap with the roles of contract and performance management, which is required to oversee service delivery in the longer term.

6.6 A high level of involvement by different departments of the Local Authority will need co-ordination in order to cover issues such as stakeholder consultation, procurement issues, and alternative approaches to statutory process.

6.7 PPP projects involve a range of skills and knowledge, both in terms of the PPP process itself and the specialist skills involved. It is recommended that Contracting and Central Authority personnel, who are involved with PPP projects, should receive specialised training in these processes and skills in order to be properly prepared to competently discharge their duties.



Appendices

A. Public Private Partnership Policy Framework



Public Private Partnerships Policy Framework

The Public Private Partnerships Policy Framework comprises a series of fifteen Guidance Notes, the titles of which are as follows:

• Introduction to Public Private Partnerships

• Financial Context

• Legal Context

• Public Private Partnership Assessment

• Statutory Process Assessment

• Procurement Procedure Selection

• Project Management

• Stakeholder Interest

• Procurement Management

• Output Specifications

• Risk Assessment

• Payment Mechanisms

• Key Contractual Issues

• Accounting Treatment

• Contract and Performance Management



Appendices

B. Outline Project Initiation Document



Outline Project Initiation Document

I Introduction Purpose Background Current Position

II Project Definition Objectives Scope Outputs

III Project Organisation Project Structure Project Steering Group Project Chairman Project Manager Project Team Quality Assurance Team

IV Risk Management Constraints and Risks Countermeasures Project and Stage Tolerances

V Project Management and Control Project Initiation Project Closure Other Matters

VI Reporting Arrangements Project Steering Group Project Manager Quality Assurance

VII Project Timing and Resources Project Plan Resource Plan Project Costs Principle Project Contacts

Appendices A Project Timetable B Allocation of Project Activities C Principle Project Contacts



Appendices

C. Role of Advisers



Role of Technical Advisers

Technical Advisers

At the project identification stage, the technical advisory role will involve: • Assisting the Contracting Authority in the development of strategies and

projects for inclusion in regional or national development plans. At the option appraisal stage the technical advisers will assist the Contracting Authority with: • Development of corridors and constraints studies, route and site selection (as

appropriate), and preliminary reports; • Development of NRA tolling studies (where appropriate); • Preparation of the PPP assessment * • Preparation of the preliminary risk assessment*; and

• Preparation of the statutory process assessment*.

The role of the technical advisers at the statutory process stage will depend on whether the Contracting Authority is taking the statutory process risk. If the statutory processes are being taken by the Contracting Authority, then the role will include all of the traditional functions of preliminary design, EIS preparation, CPO and land acquisition, EIA, public enquiries, statutory approvals and licensing. If elements of the statutory process are being undertaken by the PPP Contractor, then the role of the technical advisers will be to provide assurance to the Contracting Authority that the Contractor is fulfilling their technical obligations.

In the course of the procurement, the technical advisers will assist the Contracting Authority with: • Drafting OJEC and pre-qualification notices, and evaluating technical aspects of

responses to those notices; • Drafting contract documentation, including the output specification, and the risk

allocation for inclusion with the Invitation to Tender (ITT); • Evaluating and reporting on technical aspects of responses to the ITT; and • Assisting with negotiations with bidders (where appropriate). Under a PPP contract, the technical advisers may be required to assist the Contracting Authority in monitoring the performance of the PPP Contractor during the construction phase. Technical Advisers may be required to certify payments under DB and DBO contracts Under a PPP contract, technical advisers may be required to assist the Contracting Authority in monitoring the performance of the PPP Contractor during the operating phase. Under a PPP contract, technical advisers may be required to assist the Contracting Authority in evaluating the project: • After the asset has been commissioned; and • After five years of operation on the contract as a PPP project.


Option Appraisal

Statutory Process

Procurement

Construction

Operation

Review

*For complex projects, they provide input rather than having responsibility for the preparation of reports



Role of Financial Advisers

Financial Advisers

At the project identification stage, there should be no significant role for financial advisers. At the option appraisal stage the financial advisers may be required to assist the Contracting Authority with preparing: • The PPP assessment including the VFM assessment, the bankability assessment,

elements of the preliminary risk assessment and the Financial Comparator; • Provide input to selection of procurement procedure selection; and • Preparation of an indicative implementation plan. The role of the financial advisers at the statutory process stage should be limited, regardless of whether the Contracting Authority or the PPP Contractor is taking the statutory process risk. In the course of the procurement, financial advisers may be required to assist the Contracting Authority with: • Drafting the OJEC and pre-qualification notices, and evaluating financial

aspects of responses to those notices; • Providing input to the preparation of the draft output specification, and the risk

allocation for inclusion with the Invitation to Tender (ITT), and draft contract terms;

• Co-ordination of all inputs to the ITT; • Evaluating and reporting on financial aspects of responses to the ITT; • Manage and provide input to the approval process; and • Assisting with negotiations with bidders (where appropriate), and finalisation of

contracts.

At the construction stage, there should be no significant role for financial advisers.

At the operational stage, there should be no significant role for financial advisers. Under a PPP contract, financial advisers may be required to assist the Contracting Authority in evaluating the value for money of the project: • After the asset has been commissioned; and • After five years of operation on the contract as a PPP project.




Option Appraisal

Statutory Process

Procurement

Construction

Operation

Review



Role of Legal Advisers

Legal Advisers

At the project identification stage, there should be no significant role for legal advisers. At the option appraisal stage the legal advisers may be required to assist the Contracting Authority with preparing: • The PPP assessment (e.g. the legal viability assessment) • The selection of procurement route and statutory process assessment. The role of the legal advisers at the statutory process stage should be limited, regardless of whether the Contracting Authority or the PPP Contractor is taking the statutory process risk. Their role will involve providing assurance to the Contracting Authority that they are fulfilling their legal obligations. In the course of the procurement, the legal advisers will assist the Contracting Authority with: • Drafting OJEC and pre-qualification notices, and evaluating legal aspects of

responses to those notices; • Providing input to the preparation of the risk allocation for inclusion with the

Invitation to Tender (ITT), and preparation of draft contract terms; • Evaluating and reporting on legal aspects of responses to the ITT; • Providing input to the approval process; and • Assisting with negotiating (where appropriate) and finalising contracts.

At the construction stage, there should be no significant role for legal advisers unless contractual disputes arise.

At the operational stage, there should be no significant role for legal advisers, other than to confirm that the contracts are being operated correctly. There should be no significant review role for legal advisers on individual projects.




Option Appraisal

Statutory Process

Procurement

Construction

Operation

Review


Department of the Environment and Local Government Stakeholder Consultation



14 April 2000



Contents

Section Page

I. INTRODUCTION ....................................................................................................................................... 1

PURPOSE AND SCOPE OF GUIDANCE NOTE .......................................................................................................... 1 STRUCTURE OF GUIDANCE NOTE ........................................................................................................................ 2 PUBLIC PRIVATE PARTNERSHIP ROUTE MAP....................................................................................................... 2

II. PRINCIPAL CONCERNS.......................................................................................................................... 4

III. EMPLOYEES .............................................................................................................................................. 5

INTRODUCTION.................................................................................................................................................... 5 STATUTORY RIGHTS............................................................................................................................................ 5 EMPLOYEE AND TRADE UNION CONSULTATION.................................................................................................. 7 BUSINESS CONTEXT ............................................................................................................................................ 8

IV. OTHER STAKEHOLDERS....................................................................................................................... 9

INTRODUCTION.................................................................................................................................................... 9 STATUTORY RIGHTS............................................................................................................................................ 9 PUBLIC CONSULTATION ...................................................................................................................................... 9 BUSINESS CONTEXT .......................................................................................................................................... 10

V. CONCLUSIONS AND RECOMMENDATIONS................................................................................... 11

APPENDICES..................................................................................................................................................... 12

A. PUBLIC PRIVATE PARTNERSHIP GUIDANCE NOTES.................................................................................... 12 B. RELEVANT LEGISLATION........................................................................................................................... 14



I. Introduction

Purpose and Scope of Guidance Note

1.1 The purpose of this Guidance Note is to provide guidance for Central and Contracting Authorities in relation to the process of stakeholder consultation that should be undertaken during the development and procurement of a Public Private Partnership project in the roads, water and waste sectors.

1.2 The procurement of this type of infrastructure using the Public Private Partnership approach represents a clear shift in emphasis in that responsibility for the operation and maintenance of such items of infrastructure is likely to be passed to a private sector contractor.

1.3 Public Private Partnership projects within the roads, water and waste sectors will involve the creation of new assets or the refurbishment of existing assets and as a result they give rise to a range of issues that impact on a number of different bodies and interests.

1.4 This Guidance Note provides advice to Contracting Authorities on the approach to be adopted in relation to consultation with these various interests or stakeholders and in this context it is important to note that the concept of stakeholder includes:

• employees and trade unions or other employee representatives; and

• other stakeholders including the general public, lobby groups, service users (or their associations) and public representatives.

1.5 The Guidance Note does not address the requirements for stakeholder consultation that form part of the current statutory processes for projects in the roads, water and waste sectors. Instead it focuses upon:

• the other statutory rights of stakeholders;

• the need for extensive consultation and open communication; and

• the importance of recognising the business or commercial context within which a Public Private Partnership project is procured.


Guidance Note 8 7 April 2000 1


1.7 The Guidance Notes are designed to be informative rather than prescriptive and the aim is to reflect good practice. They are generic in that they provide guidance on the use of Public Private Partnerships across a range of projects in the roads, water and waste sectors. However, different projects will give rise to different issues and the guidance provided will have to be reviewed in the context of each individual project. For this reason it is important that Central and Contracting Authorities obtain expert advice in order to help them to make best use of the Guidance Notes and to complete a successful Public Private Partnership procurement.


1.8 The key issues addressed in this Guidance Note in relation to stakeholder consultation are as follows:

• Section Two - summarises the key concerns that underline the importance of effective stakeholder consultation to the ultimate success of a Public Private Partnership project;

• Section Three - addresses the stakeholder consultation issues most relevant to employees affected by a Public Private Partnership project; and

• Section Four - addresses the stakeholder consultation issues of relevance to other stakeholders affected by a Public Private Partnership project.

1.9 The final Section provides a summary of the main conclusions and recommendations that are identified and discussed within this Guidance Note.


1.10 The process of project development and implementation changes significantly when a project is taken forward as a Public Private Partnership. For this reason a Public Private Partnership Route Map has been developed.

1.11 The Public Private Partnership Route Map sets out the main stages in the development and implementation of a Public Private Partnership project that must be undertaken by the Central Authority and the Contracting Authority. The Route Map is presented in the diagram shown overleaf.


1.13 The process of stakeholder consultation is commenced during the Project Appraisal stage of the Route Map but is not confined solely to it as the process continues during both the preparation of contract documentation and the procurement process itself.

.





Project Appraisal

PPP Assessment





If PPP recommended



Project Management



Tendering Process


Statutory Process

Tendering Process



and Operation




Key



and Operation



II. Principal Concerns 2.1 It is important to recognise from the outset that for those directly affected by a Public

Private Partnership project, the process can involve significant change and bring with it considerable uncertainty. Accordingly, it is the responsibility of the Contracting Authority in relation to stakeholders affected by a particular project and the Central Authority in relation to the Public Private Partnership process as a whole, to ensure that:

• the maximum level of information possible is made available to stakeholders in an accessible form;

• the relevant stakeholders are informed of the existence of the Public Private Partnership project as soon as it is proposed; and

• systems are put in place at a local level to ensure that stakeholders are kept informed of significant developments throughout the process.

2.2 Insofar as it is possible, the involvement and co-operation of employees, trade unions and other local interests should be secured in advance of the procurement of a Public Private Partnership project. It is in the general interest that private sector contractors tendering for a project should have as clear an understanding as possible of the outcome of consultations with stakeholders. Stakeholders must not only have their statutory rights protected but also their legitimate economic interests.

2.3 Whilst the specific circumstances of a project must be taken into account in each case, efforts should be made as far as possible to ensure that consultations with both employees and trade unions take place within a properly understood and consistently applied framework that has general support.

2.4 The importance of protecting the rights of workers is recognised by a wide range of legislation and a listing of the most relevant legislation is set out in Appendix B to this Guidance Note. The most important piece of legislation in this regard is the European Communities (Safeguarding of Employees Rights on Transfer of Undertakings) Regulations, 1980 (the "Transfer of Undertaking Regulations") which implement into Irish law Council Directive 77/187/EEC. These regulations protect the employment rights of employees who, in the context of a Public Private Partnership contract, move from a public to a private sector employment.

2.5 It can sometimes be a matter for debate whether or not the Transfer of Undertaking Regulations apply. Therefore, in order to avoid possibly protracted and divisive legal argument, it is recommended that Central and Contracting Authorities should proceed as if the Transfer of Undertaking Regulations apply. Even if there is some doubt as to whether there is a transfer of undertaking, the Central and Contracting Authorities should not try to exploit this doubt but rather should treat the transaction as if it does involve a transfer of undertaking.

2.6 As with any project, consideration should also be given to mitigating any perceived adverse consequences for the community most directly affected by the project.



III. Employees

Introduction

3.1 Public Private Partnership projects in the roads, water and waste sectors may have, to varying degrees, an impact on the employees engaged currently in each of these sectors.

3.2 In some cases, employees will be engaged on a project specific basis, for instance, working at a particular waste water treatment plant or perhaps collecting domestic refuse in a particular area. On the other hand, employees may not be engaged on a project specific basis, for instance, road maintenance crews who are responsible for performing maintenance work on the general roads network within a particular local authority area.

Statutory Rights

3.3 In order to ensure the implementation of the Transfer of Undertaking Regulations and the protection of the rights of employees, employers are obliged to:

• inform employees of the reasons for any transfer and the legal, economic and social implications of the transfer in good time before the transfer takes effect; and

• consult with employees as to any new measures proposed with a view to seeking agreement.

3.4 The main points that a Contracting Authority should note in relation to the Transfer of Undertaking Regulations are set out below:

• the rights and obligations of the Contracting Authority (the transferor) arising from a contract of employment or from an employment relationship which existed at the date of the transfer are, by reason of the transfer, automatically transferred to the Contractor;

• the transfer of an undertaking, business or part of a business does not constitute grounds for the dismissal of an employee by either the Contracting Authority or the Contractor. Such dismissals are prohibited except where there are economic, technical or organisational reasons entailing changes in the workforce; and

• if a contract of employment or an employment relationship is terminated because a transfer involves a substantial change in working conditions which would operate to the detriment of the employee concerned, then the employer is regarded as having been responsible for termination of the employment.

3.5 In this context, the following points should also be noted with regard to the concept of transfer:



• it must involve a change of employer;

• the rights of the employee that existed prior to the transfer are preserved after the transfer. The Contractor is obliged to honour all entitlements and will be bound by all collective agreements applicable at the date of transfer regardless of whether or not it had notice of such obligations or commitments, with the exception that it is not obliged to continue to provide pension benefits nor to observe the terms of any collective agreements concerning such benefits. However, the Contractor is obliged to ensure that pension rights are protected, although an Irish court has not yet clarified the precise meaning of this requirement - in practice liability may be apportioned by way of reciprocal indemnities; and

• under an amending Directive due to be implemented by 17 July 2001, a transfer within the meaning of the Directive will occur where there is “a transfer of an economic entity which retains its identity, meaning an organised grouping of resources which has the objective of pursuing an economic activity, whether or not the activity is central or ancillary”.

3.6 Transfers which are regarded by the European Court of Justice as being covered by the Transfer of Undertaking Regulations include:

• the sale of the assets and goodwill of a business;

• the transfer of the ownership of an undertaking by operation of law or indirect means, for example, the surrender of a lease or a franchise; and

• the partial transfer of an undertaking, for example, through the contracting out, contracting in, or contracting back of services such as sludge disposal or roads maintenance.

3.7 It should be remembered that the obligation is to inform and consult. It will be a matter of judgement in each case as to the point at which the Contracting Authority considers that it has discharged of its obligations under the Transfer of Undertaking Regulations notwithstanding that full agreement with some or all employees and trade unions has not been reached.

3.8 Employee rights are protected not only by the Transfer of Undertaking Regulations but also by the general law, including legislation such as the Unfair Dismissals Acts, 1977 to 1993 and the Redundancy Payments Act, 1967 to 1991.

3.9 If there has been a failure to inform or consult (which should not occur) then the general law will apply. The rights of an employee under the general law include the right to take industrial action or seek injunctive relief in the High Court to halt the proposed transfer. If consultation has taken place but the employee considers that the new or proposed terms represent a diminution in the terms of employment, then this may give rise to a refusal to transfer or a transfer followed by a constructive dismissal claim against the Contractor.



3.10 Where an employee refuses to transfer, the Transfer of Undertaking Regulations are silent as to the rights and obligations of the parties and the general law will apply. Having regard to the provisions of the Redundancy Payments Acts, 1967 to 1991 it would appear that an employee who refuses to transfer can be made redundant by a Contracting Authority where his position, or no suitable alternative position, is available due to the transfer of all or the relevant part of the function to which the employee was formerly assigned. Provided the employee has the requisite service, he or she will be entitled upon dismissal on grounds of redundancy to a statutory redundancy payment. The employee may nevertheless challenge the dismissal under the Unfair Dismissals Acts, 1977 to 1993, the Industrial Relations Acts, 1946 to 1990 or at common law.

3.11 If an employee proceeds to transfer but subsequently is dissatisfied with his terms and conditions, the right to claim constructive dismissal or breach of contract is preserved (and the Contracting Authority may find itself joined as a party to the proceedings) as well as the right to take industrial action. The Contracting Authority may seek an indemnity from the Contractor against any claims arising after the transfer and similarly, the Contractor may seek an indemnity in respect of any claims arising out of pre-transfer events.

Employee and Trade Union Consultation

3.12 It is recommended that the Contracting Authority should commence the process of employee and trade union notification and consultation as early as practicable, but in any event prior to the publication of any advertisement in the Official Journal of the European Communities. Employees and trade unions should not be first made aware of a proposed Public Private Partnership project through the media or by hearing about it from a party other than the Contracting Authority.

3.13 Accordingly, the following actions should be undertaken:

• employers are required under the Transfer of Undertaking Regulations to give information in good time before a transfer takes effect as well as to consult with employees on any proposed measures with a view to seeking agreement. Employees and trade unions should be provided with a copy of the broad strategy to be followed in procuring a Public Private Partnership project and the likely project timetable prior to the publication of any advertisement in the Official Journal of the European Communities; and

• the Contracting Authority should prepare a comprehensive Communications Plan that addresses the issues associated with stakeholder consultation prior to the publication of an advertisement in the Official Journal of the European Communities.

3.14 In addition, an initial explanation of the project and the objectives that justify its development and procurement on the basis of a Public Private Partnership should be made available upon request.



3.15 The Contracting Authority should take care that, whilst endeavouring to remain as open as possible, commercially sensitive information or confidential information is not released. Judgement will have to be exercised balancing the need to protect the competitive process and to achieve value for money on the one hand with the need to comply with the obligations of the Contracting Authority as employer under the Transfer of Undertaking Regulations on the other. Each individual case will have to be judged on its own merits.

3.16 Where a Public Private Partnership project is likely to involve the transfer of a large number of employees, the Contracting Authority should also consider the following actions:

• a copy of the Invitation to Tender or Invitation to Negotiate should be made available to employees and trade unions after it has been issued to tenderers; and

• tenderers should be provided with timely and accurate information in relation to the numbers, composition and terms and conditions of employees who could potentially transfer to the Contractor.

3.17 After a Public Private Partnership project has been awarded to the preferred tenderer, it is recommended that employees and trade unions are informed at the earliest point possible of any contract provisions that impact upon them.

Business Context

3.18 Apart from statutory rights, a Contracting Authority must also take account of the wider business context. The commercial reality is that a Contractor will not wish to complete a Public Private Partnership transaction if there are industrial relations difficulties. From a commercial perspective, issues involving employees and trade unions will have to be resolved prior to contract award unless the parties can come to some mutually satisfactory arrangement.

3.19 Whilst the specific circumstances of each Public Private Partnership project should be taken into account, efforts must be made to ensure that consultations with employees take place within a properly understood and consistently applied framework that has general support.

3.20 In relation to employees and trade unions, the key issues that must be addressed in the framework include the right of employees to return to work for the Contracting Authority, the questions of redundancy and compensation, the arrangements for meeting the costs associated with any staff transfers arising as a result of the project and the proposals for the redeployment and training of employees. However, whilst these issues must be addressed in the framework, they will have to be negotiated on a project by project basis.



IV. Other Stakeholders

Introduction

4.1 The ultimate success of any Public Private Partnership project is due, in part, to ensuring that those individuals or bodies who are directly interested in the project are kept fully informed and properly consulted at all stages in the project. Stakeholder consultation should therefore be:

• extensive and involve all interested parties;

• open and transparent, providing as much information as possible;

• conducted at the earliest stage possible; and

• comprehensive, covering all aspects of the project that are of interest to the stakeholders and not just statutory rights.

Statutory Rights

4.2 The Contracting Authority should manage the process of stakeholder consultation in a manner that takes into account the provisions of the Freedom of Information Act, 1997 and the European Communities Act, 1972 (Access to Information on the Environment) Regulations, 1998. In particular, the Contracting Authority will need to balance such consultation with the protections afforded within the Act/Regulations in relation to confidential and commercially sensitive information. The preamble to the Freedom of Information Act, 1997 provides that it is designed "to enable members of the public to obtain access, to the greatest extent possible consistent with the public interest and the right to privacy, to information in the possession of public bodies".

4.3 The Contracting Authority will need to exercise great care when faced with requests for the release of information either to employees, members of the public or other stakeholders. In particular, the Contracting Authority will wish to avoid allowing improper gain or advantage to competing tenderers or likely competitors of those tendering as a result of the release of information. Therefore, regard will have to be had to the exemptions that may apply in relation to the release of any documentation associated with a Public Private Partnership project.

Public Consultation

4.4 It is considered that lobby groups, service users (or their associations), the general public and public representatives will have the opportunity to make their views on a Public Private Partnership project known during the project development and procurement process, not least during the statutory processes. Good practice dictates that consultation should be as wide as possible.



4.5 Whilst the law may change with the enactment of amended planning legislation, the public has a right to have details of the proposed plans for infrastructure projects in the roads, water and waste sectors both in the context of planning permission and the impact of the project on the environment.

4.6 Additional opportunities for consultation also exist, for example, in relation to roads where, under the Roads Act, 1993, the public has the right to make objections against a proposed toll scheme to the Minister for the Environment and Local Government. If the objection is not withdrawn the Minister is obliged to cause a public local enquiry into the toll scheme. A similar right to a public local enquiry exists in connection with the making of a motorway scheme. Please also refer to the separate Guidance Note entitled Statutory Process Assessment.

Business Context

4.7 It is likely that Public Private Partnership projects in the roads, water and waste sectors will have in many cases a considerable impact on the community local to the site of the project. As with any project, consideration should be given to mitigating the effects for the local community of having the project sited beside them. Special efforts should be made to involve the community in the very earliest stages of the project to minimise the effects of misinformation and lack of understanding of key concepts surrounding the project. To some degree a Contracting Authority will have to consider going beyond the statutory requirements in terms both of consultation with and furnishing information to the affected community.



V. Conclusions and Recommendations 5.1 It is recommended that Contracting Authorities adopt the approach of extensive

consultation and open communication at the earliest possible opportunity when considering a Public Private Partnership project.

5.2 Particular issues arise in relation to employees and their representatives. In some cases it may be open to debate whether or not a transfer of undertaking has occurred that gives rise to employee rights under the Transfer of Undertaking Regulations. However, in cases of doubt, it is recommended that Contracting Authorities approach Public Private Partnerships on the basis that the Transfer of Undertaking Regulations will apply.

5.3 Insofar as it is possible, the involvement and co-operation of employees, trade unions and other local interests should be secured prior to the commencement of any procurement. It is in the general interest that private sector contractors tendering for a project should have as clear an understanding as possible of the outcome of any consultations with employees, trade unions and other stakeholders. The stakeholders must not only have their statutory rights protected but also their legitimate economic interests.

5.4 Whilst the specific circumstances of a particular Public Private Partnership project should be taken into account in each case, efforts must be made to ensure that consultations with employees, trade unions and other stakeholders take place within a properly understood and consistently applied framework that has general support.

5.5 As with any project, serious consideration should be given to measures designed to mitigate any perceived adverse consequences for the local community most directly affected by the project.



Appendices

A. Public Private Partnership Guidance Notes



Public Private Partnership Guidance Notes The Public Private Partnerships Policy Framework comprises a series of fifteen individual Guidance Notes, the titles of which are as follows:



• Legal Context





• Stakeholder Consultation



• Risk Assessment







Appendices

B. Relevant Legislation



Relevant Legislation

• European Communities (Safeguarding of Employees Rights on Transfer of Undertakings) Regulations, 1980

• Unfair Dismissals Acts,1977 to 1993

• Redundancy Payments Acts, 1967 to 1991

• Minimum Notice and Terms of Employment Acts, 1973 to 1991

• Industrial Relations Acts, 1946 to 1990

• Employment Equality Act, 1998

• Safety Health and Welfare at Work Act, 1989

• Freedom of Information Act, 1997

• Roads Act, 1993

• Roads (Amendment) Act, 1998

• European Communities Act, 1972 (Access to Information on the Environment) Regulations 1998

• Local Government (Planning and Development) Acts, 1963 to 1999.


Department of the Environment and Local Government Procurement Management

Procurement Management


14 April 2000



Contents

Section Page

I. INTRODUCTION....................................................................................................................................... 1

PURPOSE AND SCOPE OF GUIDANCE NOTE ......................................................................................................... 1 STRUCTURE OF GUIDANCE NOTE........................................................................................................................ 1 PUBLIC PRIVATE PARTNERSHIP ROUTE MAP ...................................................................................................... 2

II. OVERVIEW OF PROCUREMENT PROCESS...................................................................................... 4

INTRODUCTION ................................................................................................................................................... 4 PROCUREMENT PROCESS .................................................................................................................................... 4 INDICATIVE TIMETABLE ..................................................................................................................................... 7 RELATED GUIDANCE .......................................................................................................................................... 8

III. ADVERTISING THE PROJECT............................................................................................................ 10

REQUIRED ADVERTISEMENTS........................................................................................................................... 10 OTHER ADVERTISEMENTS ................................................................................................................................ 12

IV. PREQUALIFICATION OF TENDERERS............................................................................................ 13

INTRODUCTION ................................................................................................................................................. 13 CLASSIC DIRECTIVES........................................................................................................................................ 13 UTILITIES DIRECTIVE........................................................................................................................................ 17 DEBRIEFING APPLICANTS ................................................................................................................................. 18

V. TENDERING PROCESS ......................................................................................................................... 19

INTRODUCTION ................................................................................................................................................. 19 RESTRICTED PROCEDURE ................................................................................................................................. 19 NEGOTIATED PROCEDURE ................................................................................................................................ 23 REPORT ON THE TENDERING PROCESS.............................................................................................................. 26 TENDER COSTS ................................................................................................................................................. 27

VI. VALUE FOR MONEY ASSESSMENT.................................................................................................. 28

INTRODUCTION ................................................................................................................................................. 28 ELEMENTS OF THE VALUE FOR MONEY ASSESSMENT ...................................................................................... 29 DISCLOSURE OF THE FINANCIAL COMPARATOR................................................................................................ 30 RESULTS OF THE VALUE FOR MONEY ASSESSMENT ......................................................................................... 31

VII. POST CONTRACT AWARD ............................................................................................................. 32

DEBRIEFING OF TENDERERS ............................................................................................................................. 32 AWARD NOTICES.............................................................................................................................................. 32

VIII. REMEDIES .......................................................................................................................................... 33

INTRODUCTION ................................................................................................................................................. 33

IX. CONCLUSIONS AND RECOMMENDATIONS .................................................................................. 36

PRINCIPLES ....................................................................................................................................................... 36 MINIMUM PERIODS........................................................................................................................................... 36 NUMBER OF TENDERERS................................................................................................................................... 36 PREQUALIFICATION OF TENDERERS.................................................................................................................. 36 TENDERING PROCESS........................................................................................................................................ 37 USING THE NEGOTIATED PROCEDURE .............................................................................................................. 38 REPORT ON TENDERING PROCESS..................................................................................................................... 38 DISCLOSURE OF THE FINANCIAL COMPARATOR................................................................................................ 38 TENDER COSTS ................................................................................................................................................. 39



APPENDICES..................................................................................................................................................... 40

A. PUBLIC PRIVATE PARTNERSHIP POLICY FRAMEWORK ............................................................................ 40 B. INFORMATION AND RELEVANT LEGISLATION ......................................................................................... 42 C. CONTENTS OF A TYPICAL PROJECT INFORMATION MEMORANDUM......................................................... 45



I. Introduction

Purpose and Scope of Guidance Note

1.1 This Guidance Note provides guidance for Central and Contracting Authorities on the management of Public Private Partnership procurements in the roads, water and waste sectors.

1.2 The Guidance Note concentrates upon the procurement process for a Public Private Partnership contract itself and not on the procurement of advisers. Reference should be made to the EC Public Procurement Directives and the Government Guidelines on Public Procurement, 1994 (the "Green Book") in this regard. Reference should also be made to the separate Guidance Note entitled Procurement Procedure Selection in order to establish which procurement procedure should apply to a particular project.


1.4 The Guidance Notes are designed to be informative rather than prescriptive and the aim is to reflect good practice. They are generic in that they provide guidance on the use of Public Private Partnerships across a range of projects in the roads, water and waste sectors. However, different projects will give rise to different issues and the guidance provided will have to be reviewed in the context of each individual project. For this reason it is important that Central and Contracting Authorities obtain expert advice in order to help them to make best use of the Guidance Notes and to complete a successful Public Private Partnership procurement.


1.5 This Guidance Note sets out the principal activities that will be undertaken as part of the procurement process for a Public Private Partnership project in the roads, water or waste sectors. The Guidance Note focuses on the use of the restricted and negotiated procedures and the key matters addressed in the Guidance Note are as follows:

• Section Two - provides an overview of the procurement process for a Public Private Partnership project and identifies the key activities associated with the use of the restricted and negotiated procedures;

• Section Three - describes the requirements of the Procurement Directives in relation to the advertisement of projects and reviews the key issues associated with other additional forms of project advertising;

• Section Four - describes the main procurement activities associated with the prequalification of a shortlist of applicants under the restricted and negotiated procedures;



• Section Five - sets out the key procurement activities from the prequalification of a shortlist of applicants through to contract award and provides some initial guidance on the conduct of negotiations under the negotiated procedure;

• Section Six - defines the requirements for a value for money assessment prior to the award of a Public Private Partnership contract and identifies the main components of such an assessment;

• Section Seven - describes the requirements of the Procurement Directives in relation to the debriefing of tenderers and the placing of award notices; and

• Section Eight - provides a brief overview of the remedies available to a party that objects to the procedures adopted in the award of a particular contract.

1.6 The final Section provides a summary of the main conclusions and recommendations that are identified and discussed within this Guidance Note.


1.7 The process of project development, procurement and implementation changes significantly when a project is taken forward as a Public Private Partnership. For this reason a Public Private Partnership Route Map has been developed.

1.8 The Public Private Partnership Route Map sets out the main stages in the development and implementation of a Public Private Partnership project that must be undertaken by the Central Authority or the Contracting Authority. The Route Map is presented in the diagram shown overleaf.


1.10 This Guidance Note provides guidance for Central and Contracting Authorities on the preparation of contract documentation and the management of the tendering process. It must be read in conjunction with the separate Guidance Notes entitled Procurement Procedure Selection and Project Management.





Project Appraisal

PPP Assessment





If PPP recommended



Project Management



Tendering Process


Statutory Process

Tendering Process



and Operation




Key



and Operation



II. Overview of Procurement Process

Introduction

2.1 This section of the Guidance Note provides an overview of the procurement process for a Public Private Partnership project. It assumes that the relevant procurement procedure has been selected, that advisers have been appointed and that the necessary project management structures have been established. These issues are considered in the separate Guidance Notes entitled Procurement Procedure Selection and Project Management.

2.2 EC Public Procurement Directives have been in force for a considerable time, with the first being introduced in the 1970s. The aim of these Directives is to make tendering and contract procedures more transparent and open to cross border and inter-regional competition within the European Union. The Directives currently in force relate to the following four regimes:

Works (Council Directive 93/37/EEC);

Supplies (Council Directive 93/36/EEC);

Services (Council Directive 92/50/EEC); and

Utilities (Council Directive 93/38/EEC).

2.3 The Works Directive, Supplies Directive and Services Directives are collectively referred to as the "Classic Directives" in this Guidance Note. An amending Directive was introduced to bring conformity between the EC Public Procurement Rules and the Government Procurement Agreement of the World Trade Organisation and it made amendments to the provisions of the existing Classic Directives. This Guidance Note takes account of these changes where relevant. In relation to the Utilities regime, an amending Directive (Directive 98/4/EC) was also introduced. A list of the principal relevant legislation is set out in Appendix B to this Guidance Note.

Procurement Process

2.4 The procurement of a Public Private Partnership project under the restricted procedure will consist of the following five broad phases:

advertising;

prequalification;

tendering;

tender evaluation; and

contract award.



2.5 The principal activities to be undertaken by the Contracting Authority and its advisers during each phase of a Public Private Partnership procurement under the restricted procedure are described in detail in the following sections of this Guidance Note and are summarised in the diagram shown below.

Figure 2: Overview of Restricted Procedure

• Establish prequalification criteria• Develop project information memorandum• Develop request for prequalification• Identify short list of tenderers• Debrief unsuccessful applicants

Advertise

ActivitiesPhase

• Place prior information notice• Place contract notice• Place other advertisements

Prequalification

TenderingProcess

• Prepare Instructions to Tenderers• Prepare Project Agreement• Prepare Output Specification• Establish evaluation criteria• Obtain approval of Central Authority• Hold clarification meetings with tenderers• Receipt of tenders

TenderEvaluation

• Assess tender compliance• Evaluate tenders• Hold clarification meetings with tenderers• Select preferred tenderer• Prepare report on tendering process• Obtain approval of Central Authority

Contract Award• Award contract• Debrief unsuccessful tenderers• Place award notice

2.6 The procurement of a Public Private Partnership under the negotiated procedure will consist of the same five broad phases as the restricted procedure. The main difference between the two procedures is that under the negotiated procedure the Contracting Authority is able to negotiate with bidders as part of both the bidding process and bid evaluation.



2.7 The principal activities to be undertaken by the Contracting Authority and its advisers during each phase of a Public Private Partnership procurement under the negotiated procedure are described in detail in the following sections of this Guidance Note and are summarised in the diagram shown below.

Figure 3: Overview of Negotiated Procedure

• Establish prequalification criteria• Develop project information memorandum• Develop request for prequalification• Identify short list of bidders• Debrief unsuccessful applicants

Advertise

ActivitiesPhase

• Place prior information notice• Place contract notice• Place other advertisements

Prequalification

BiddingProcess

• Prepare Instructions to Bidders• Prepare Project Agreement• Prepare Output Specification• Establish evaluation criteria• Obtain approval of Central Authority• Hold clarification meetings with bidders• Receipt of indicative bids

BidEvaluation

• Assess bid compliance• Evaluate bids• Negotiate with bidders• Select preferred bidder• Negotiate with preferred bidder• Prepare report on bidding process• Obtain approval of Central Authority

Contract Award• Award contract• Debrief unsuccessful bidders• Place award notice

2.8 Since it is not considered desirable to set out in detail one approach in favour of any

other with regard to concession contracts, this Guidance Note does not set out in any detail the activities to be undertaken by the Contracting Authority and its appointed advisers during the procurement of a concession contract.



Indicative Timetable

2.9 An indicative timetable for a Public Private Partnership procurement under both the restricted and negotiated procedures is presented in the table below. The timetable assumes that the Classic Directives apply and that a prior information notice has been placed in the Official Journal of the European Communities. It also assumes that the project information memorandum and request for prequalification are not issued until 38 days after the dispatch of the contract notice. It should be noted that the timetable is based upon the cumulative number of days elapsed from the publication of the contract notice.

Table 1: Indicative Timetable for Public Private Partnership Procurement

Procurement Phase

Restricted Procedure

Target Completion (cumulative days)

Negotiated Procedure

Target Completion (cumulative days)

Dispatch contract notice 0 0

Latest date for receipt of expressions of interest 37 37

Issue prequalification documentation 38 38

Receive prequalification submissions 70 70

Short list of tenderers or bidders 100 100

Issue Invitation to Tender or Negotiate 130 130

Receive responses from tenderers or bidders 220 220

Clarification or negotiation with tenderers or bidders 250 310

Selection of preferred tenderer or bidder 280 340

Clarification or negotiation with preferred tenderer or bidder

300 480

Award contract 390 540

2.10 In developing the timetable for a Public Private Partnership procurement under either the restricted or the negotiated procedure, a Contracting Authority will need to take account of the fact that the agreement of the Central Authority is required prior to the issuance of the final tender documents and prior to contract award.

2.11 The Central Authority will be represented on the steering group and project team for each Public Private Partnership procurement and so will be generally informed of the progress of a project. Notwithstanding this, however, a minimum of 30 days should be allowed for each of the approvals required and if any substantive issues arise this approval period may need to be extended.



2.12 It is also important to note that the Central Authority will only approve the award of a contract involving private finance and long term Exchequer commitments once it has consulted with the Department of Finance. Accordingly, provision must be made for this process of consultation within the procurement timetable for such a project.

2.13 The indicative timetable set out above contains separate periods for the submission of expressions of interest and the issuance and receipt of prequalification submissions. The time scales suggested could be curtailed by combining these two periods into one. This can be done provided that the contract notice contains a statement that a project information memorandum and proforma request for prequalification is available from the Contracting Authority and that the completed request for prequalification should be submitted by the closing date stated in the contract notice.

2.14 The indicative timetable also assumes that Ministerial approval, the procurement of a bond (where appropriate), procurement of insurances and the carrying out of any due diligence (where private finance is involved) is being carried out in parallel with the appropriate activities rather than subsequently to them.

2.15 In addition, under the negotiated procedure, the Contracting Authority may negotiate with short listed applicants both prior to and following the selection of a preferred bidder. The timescales for negotiation are not fixed, and will depend on the size and complexity of the project and on the number of competing bidders.

2.16 Finally, it is considered unlikely that the time periods set out in the indicative timetable can be accelerated in accordance with the grounds for acceleration under the Directives. Furthermore, as the minimum time periods allowed in the Directives for the submission of tenders in any event are considered too short for a Public Private Partnership contract in the roads, water and waste sectors, the ability to reduce that period where a prior information notice has been published is unlikely to be of value.

Related Guidance

2.17 The Invitation to Tender for a Public Private Partnership project will generally consist of the Instructions to Tenderers, the Output Specification and the Project Agreement. In preparing each of these important documents, Contracting Authorities should take account of the guidance set out in the following separate Guidance Notes:

• Output Specifications - this Guidance Note provides advice for Contracting Authorities in relation to the preparation of an Output Specification. Output specifications define the levels of service that are required from a project in terms of outputs rather than inputs. This provides scope for the private sector to be innovative in relation to the design and operation of assets that will deliver the levels of service that are a required.

• Payment Mechanisms - this Guidance Note provides advice for Contracting Authorities on the development of payment mechanisms for Public Private Partnership projects. The structure of a payment mechanism is dependent on the scope and nature of service included in the output specification, as well as the allocation of risk arising from the detailed risk assessment.



• Risk Assessment - this Guidance Note provides guidance for Contracting Authorities on the identification, quantification and allocation of risk between the Contracting Authority and potential private sector contractors.

• Key Contractual Issues - this Guidance Note provides advice for Contracting Authorities on the key contractual issues that must be addressed within the Project Agreement for a Public Private Partnership project. The principal contractual issues include timing of service delivery, change control, dispute resolution, residual value risk, early termination and step in rights.



III. Advertising the Project

Required Advertisements

3.1 The Classic Directives and the Utilities Directive have specific rules concerning the advertisement of contracts but there are differences between the approaches required under each Directive. The full titles of the Directives are set out with details of other relevant procurement legislation in Appendix B to this Guidance Note.

Classic Directives

3.2 Broadly speaking the Classic Directives require the following advertisements to be placed in the Official Journal of the European Communities (and provide models for such notices in the Annexes to the Directives):

• Prior information notice - this notice gives brief details of the forthcoming contract notice, identifying the essential characteristics of the project and estimated value. In the case of the Works Directive, it must be sent as soon as possible after the decision approving the planning of the process. In the case of the Services and the Supplies Directives, when the total value of all services or supplies to be procured in a budgetary year is greater than ECU 750,000, then the prior information notice should be published as soon as possible after the beginning of the budgetary year. There is no requirement for a prior information notice in the case of a concession contract.

• Contract notice - this notice sets out the details of the project being procured and invites interested private sector contractors to express an interest in the project (except in the case of the open procedure where the notice invites tenders). Care should be taken when drafting the contract notice in order to ensure that projects are described widely enough to accommodate any future changes that might be desirable depending on the solutions offered during the tender process.

• Award notice - this notice is required to be published once a contract has been awarded and the notice gives details of the contract award.

3.3 The cost of publication of the notices identified above is borne by the Official Journal of the European Communities (the "Official Journal"). The Classic Directives require that the length of any notice is not to exceed 650 words or one page of the Official Journal.

3.4 Where a prior information notice is published it allows a Contracting Authority to reduce the minimum tender periods set out in the Directives. In such circumstances, provided the Contracting Authority has sent the prior information notice at least 52 days (and not more than 12 months) prior to the date the contract notice was sent to the Official Journal, then the Contracting Authority may reduce the minimum period for receipt of tenders from 40 days to 26 days. The minimum period for receipt of requests for prequalification remains unchanged at 37 days.



3.5 It is important to note that under the Classic Directives, a prior information notice is not sufficient to commence a restricted or negotiated procedure in its own right as opposed to the position under the Utilities Directive (see below).

3.6 In this context, however, it is also important to note that the minimum periods for the preparation and submission of meaningful tenders under the Classic Directives are unlikely to be long enough for Public Private Partnership projects. As a result, serious consideration should be given to setting a longer and appropriate period when the contract notice is being prepared. The length of the tender period will be a matter for decision on a contract by contract basis but is unlikely to be less than three months.

3.7 In addition, tenderers may request an extension of the tender period. If a Contracting Authority considers it reasonable to accede to such a request, then all tenderers must be notified of the decision to extend at the same time in advance of the due date for the submission of tenders. There are difficulties with this course of action in the case of the open procedure but, as it is not anticipated that any Public Private Partnerships in the roads, water or waste sectors will be awarded using the open procedure, this issue will not be addressed in this Guidance Note.

Utilities Directive

3.8 The Utilities Directive has slightly different rules to those in the Classic Directives and the advertisements which can be placed in the Official Journal of the European Communities are set out below. The forms of the advertisements or notices are set out in Annexes 12 to 15 of the Utilities Directive.

• Periodic indicative notice - this is an annual notice giving estimates of the planned procurements under broad product groups. The periodic indicative notice may also be used as a call for competition but in this case it must refer specifically to the actual contract and indicate that the contract will be awarded by the restricted or negotiated procedure without the publication of a further call for competition. All interested parties responding to the periodic indicative notice must be asked to confirm their interest on the basis of the information provided on the contract, prior to the drawing up of a tender list.

• Qualification system notice - where a Contracting Authority wants to operate a system of qualifying suppliers for particular contracts, a notice must be published giving details of the qualification. The qualification criteria and rules must be made available on request to interested private sector contractors and so must be prepared in advance of the publication of the notice. A qualification system notice may also be used as a call for competition and the same rules will apply as for a periodic indicative notice.

• Contract notice - this notice is used to invite interested private sector contractors for individual projects as and when they occur. The notice must specify which tender procedure (open, restricted or negotiated) is to be used.

• Award notice - within two months of awarding a contract a notice giving details of the award must be published.



Other Advertisements

3.9 Contracting Authorities may publish advertisements in the national and local press but these advertisements must not contain any more information than that which is published in the Official Journal and cannot be published in the national or local press before the contract notice has been dispatched to the Official Journal.

3.10 The Office of the Official Journal undertakes to publish notices within 12 days of a contract notice being dispatched. If a contract notice appears in the national press between the time it was dispatched to the Official Journal and its actual appearance in the Official Journal, the Directives have not been breached.

3.11 The Directives are silent on whether the Contracting Authority can make direct communication at this stage with private sector contractors who it reasonably considers would be interested in the project. In the interests of transparency and fairness of procedures, it is not recommended that any such direct marketing steps be taken until after the contract notice has actually appeared in the Official Journal thus ensuring that any applicants or tenderers in Ireland gain no advantage over those in other jurisdictions. It is also recommended that any such communication be restricted to notifying those potential applicants of the existence and date of the contract notice.



IV. Prequalification of Tenderers

Introduction

4.1 Once a project is advertised in the Official Journal of the European Communities, interested private sector contractors will apply to be included on the tender list. Often a large number of applicants will respond requiring the Contracting Authority to carry out a shortlisting exercise. The Classic Directives allow for one method (qualitative selection) whilst the Utilities Directive allows for two (qualification and selection).

4.2 In the case of the Classic Directives, the contract notice should prescribe the number of applicants who will be selected to submit tenders. Where a range is not prescribed in the contract notice, any applicant that meets the prequalification criteria is entitled to participate in the tender process.

4.3 Under the restricted procedure, the number of applicants invited to submit a tender can be between 5 and 20. However, in order to keep the number of tenderers to a manageable level, serious consideration should be given to limiting the number to 5, given that significant tendering costs are likely to be incurred. The intended number of applicants invited to tender should be stated in the contract notice.

4.4 Under the negotiated procedure, the number of applicants invited to negotiate may not be less than three provided there is a sufficient number of suitable applicants. It is recommended that no more than four applicants should be invited to submit a tender and this should be stated in the contract notice.

Classic Directives

Prequalification Criteria

4.5 The Classic Directives provide that applicants may be rejected if they are financially unsound, dishonest or unauthorised. In particular, the following applicants will be excluded:

• those who are apparently insolvent, where a receiver or liquidator has been appointed or any analogous procedure has been instigated in another Member State;

• those who have committed a criminal offence or grave misconduct in relation to their business, or have failed to make tax or social security payments or are guilty of misrepresentation in response to a contract notice; or

• those who are not authorised in their own Member State to carry out the business of the works or services advertised.

4.6 In order to assess the reliability and financial soundness of applicants, the Classic Directives allow the Contracting Authority to ask for evidence of the following:



• economic and financial standing in the form of statements from bankers, extracts from accounts in the public domain, recent turnover in respect of all business and of the relevant service; and

• information about skills, efficiency, experience and reliability, and technical capacity, in the form of details of professional qualifications, managerial staff and staff members, information about similar contracts performed in the previous three years and measures for ensuring quality.

4.7 It is important to note that the same prequalification criteria must be applied to every applicant fairly and the prequalification criteria must be related to the assessment of the applicant and not to the assessment of any specific project proposals submitted. However, the prequalification criteria should not be established in isolation and must relate, in a proportionate way, to the contract to be procured.

4.8 The Contracting Authority cannot set standards that are so high that private sector contractors that might otherwise be capable of performing the contract are excluded. It is also important that the contract notice contains details of the criteria and not just the proofs that can be requested. In essence, it is sufficient that applicants are advised that they should have a specified minimum turnover in works or services similar to the works or services covered by the contract notice, having regard to the nature, size and complexity of the works or services to be provided.

4.9 The prequalification criteria must be disclosed to applicants and the best place to do so is in the contract notice subject to keeping the contract notice within the maximum permitted size. This will give sufficient information to potential applicants who will then be able to determine from the contract notice whether or not they consider themselves suitable to prequalify. Should the contract notice, with such information, exceed the maximum permitted size, then the information should be set out in the project information memorandum (see below).

Prequalification Documentation

4.10 More detailed information and background about the project and procurement process should be set out in a project information memorandum. The preparation of a project information memorandum will help to establish credibility in the market place and give potential applicants a basis, along with the contract notice, upon which to decide whether or not to submit a request for prequalification.

4.11 The project information memorandum will be general in nature and the Contracting Authority may not wish to give the type of specific information that is reserved for the tender documents. However, information given should be sufficient to fully inform applicants in general terms of the size, nature, location and complexity of the project. An indicative list of the contents of a typical project information memorandum is set out in Appendix C to this Guidance Note.



4.12 A proforma request for prequalification should also be prepared for each project. This consists of a proforma questionnaire that must be completed by each applicant. Such a document is helpful for both applicants and the Contracting Authority as it reduces the risk of the required information not being forwarded and allows the Contracting Authority to review, in a structured and convenient way, all of the submissions received. It is important to note that the Directives limit the kinds of questions that can be asked and it is important that only legitimate questions are asked.

Prequalification Process

4.13 The minimum period set out in the Classic Directives for receipt of expressions of interest is 37 days from the date that the contract notice was transmitted to the Official Journal in Luxembourg. The Contracting Authority can choose to allow a longer period if it is considered appropriate.

4.14 The Directives are unclear as to whether it is sufficient simply to submit an expression of interest by the expiry of this period or whether all relevant information set out in the request for prequalification must be submitted by that date. The safer view is that the Contracting Authority should, if it receives an expression of interest prior to the closing date but not all of the relevant information, go back to the applicant before or after the closing date and seek the submission of the balance of the information. If the Contracting Authority wishes the closing date to apply not only to the expression of interest but also to the receipt of relevant information, then very clear language should be used in the contract notice and repeated in the project information memorandum to that effect.

4.15 Within the 37 days (or longer period if appropriate), the Contracting Authority should hold a briefing meeting that is open to all potential applicants. The briefing meeting will provide an opportunity for the Contracting Authority to market the project and to establish its credentials. To ensure maximum participation in the briefing meeting and to maintain the integrity of the procurement process, details of the briefing meeting should be set out in the contract notice.

4.16 In selecting the applicants who will be invited to submit a tender, the Contracting Authority can proceed on the basis of a pass or fail test or alternatively score the various applicants and rank them. If the Contracting Authority has not prescribed a range in the contract notice then any applicant who meets the minimum criteria must be invited to submit a tender.

4.17 It is therefore recommended that if the restricted procedure is being used the number of applicants should be prescribed. The Classic Directives permit a range of between 5 and 20 but in view of the complex nature of Public Private Partnership contracts in the roads, water and waste sectors, a range of somewhere between five and seven is probably the maximum. Indeed, given the significant tendering costs likely to be associated with Public Private Partnership projects, serious consideration should be given to limiting the number to five (as a Contracting Authority is entitled to do).

4.18 Where the negotiated procedure is used, the Contracting Authority is permitted to limit the number invited to negotiate to three and the intention to do this should be set out in the contract notice.



4.19 If a range of applicants is prescribed in the contract notice, then it may be that more than the specified number of applicants will meet the minimum criteria. For this reason the Contracting Authority should rank the applicants using a scoring system. It should be noted that compliance with the Directives requires that those best suited should not be excluded and the principles of objectivity, fairness and transparency must guide the Contracting Authority in compiling the scoring system.

4.20 The Directives do not explicitly require the scoring system to be made public and as a result it will be a matter for the Contracting Authority to decide whether or not it wishes to publish the scoring system in the project information memorandum. Even if the scoring system is not made available to applicants, the Contracting Authority should ensure that the scoring system is prepared (and objective evidence of such preparation is available) prior to the latest date for receipt of the request for prequalification and preferably before the contract notice is forwarded to the Official Journal. This will counteract any suggestion that the scoring system was prepared having regard to the quality of the actual applicants expressing interest in the project. In any event, the Contracting Authority should be aware that under the Freedom of Information Act, it may be required to disclose the scoring system.

4.21 An issue not expressly dealt with in the Directives is where the number of applicants requesting to be invited to tender is less than the number stated in the contract notice. In these circumstances, is it necessary to begin a new procurement? The Directives state that where no requests for prequalification are received at all the Contracting Authority may use the negotiated procedure without advertisement. Thus by implication, where at least two applicants submit a request for prequalification, it would still seem appropriate to permit the Contracting Authority to proceed with the existing procedure without the need to recommence a new one. It could also make contact with other companies in the market place to increase the number of interested applicants. However, if only one applicant submits a request for prequalification, then to continue with formal tendering could be futile unless other interested applicants come forward.

4.22 Where there is a sufficient number for adequate competition but less than the number stated in the contract notice, it seems that the most appropriate solution is for the Contracting Authority to proceed with the existing procurement procedure as normal. This is an issue on which specific legal advice should be sought if it arises in relation to a particular project.

4.23 Another issue not expressly dealt with in the Directives is where there is a change in the composition of an applicant. In the case of a consortium established as a limited company, it might be said that a change in the consortium members only amounts to a change in control and should not have any consequences for the competition. However, if a selection has been made on the basis of the attributes of a party who is now not part of the consortium then there may be a concern on the part of the Contracting Authority such that it wishes to reconsider its decision. Whether it needs to reconsider its decision depends on the stage in the process which has been reached and the importance or otherwise of the consortium member concerned. This is again an issue on which specific legal advice should be sought if it arises in relation to a particular project.



Utilities Directive

Selection

4.24 The Utilities Directive provides that a Contracting Authority may select the applicants invited to submit a tender under the restricted or negotiated procedures in accordance with objective criteria and rules which it lays down and which it is to make available to interested private sector contractors. These criteria may include those related to the exclusion of potential applicants as set out at the start of this section.

4.25 Criteria may be based on the objective need of the Contracting Authority to reduce the number of applicants to a level which is justified by the need to balance the particular characteristics of the contract award procedure and the resources required to complete it. The number of applicants selected must, however, take account of the need to ensure adequate competition. In this regard, the Utilities Directive is not as specific regarding the type of evidence that can be requested from applicants as in the Classic Directives. Nevertheless, the custom and practice in Ireland is that selection is carried out in the same way as for the Classic Directives.

Qualification System

4.26 The Contracting Authority can establish a qualification system for regular supply contracts and for major capital projects. If it is intended that a tender list is going to be drawn up using qualification, the contract must be advertised using a qualification system notice. When operating a qualification system, the Utilities Directive requires the Contracting Authority:

• to use objective criteria that do not discriminate between contractors and to make those criteria available to interested parties on request;

• to communicate any updated criteria to interested parties;

• not to impose administrative, technical or financial conditions on some parties that are not imposed on others;

• not to ask for tests or proofs when objective evidence of these is already available; and

• to notify suppliers and contractors when their qualification is being brought to an end for reasons based on the stated criteria.

4.27 Qualification criteria can be grouped under the following headings:

Financial;

Commercial;

Technical; and

Quality.



4.28 Only applicants who do not satisfy the criteria may be refused qualification. In this case the applicants must be notified accordingly and the reason for rejection must be given.

4.29 The duration of a qualification system must be included in the qualification system notice and where the system is of a duration greater than three years, the notice must be published annually. Applicants must normally be given a decision within six months of making the application. If a decision is going to take longer, the applicants must be informed of this fact within two months of making the application.

Debriefing Applicants

4.30 The Directives require the Contracting Authority, within 15 days of the date on which a written request is received (and in the case of the Utilities Directive, promptly after the date of the written request), to inform any unsuccessful applicant of the reasons for the rejection of its application. In addition, the Contracting Authority is obliged to promptly inform applicants of any decisions taken on contract awards including the reasons why it has decided not to award a contract for which there has been an invitation to tender or a decision to start the procurement procedure again. For more details of the extent of the obligation to debrief, please refer to Section Seven of this Guidance Note.

4.31 There is no obligation on the Contracting Authority to hold debriefing meetings with unsuccessful applicants. It is for the Contracting Authority to decide whether it feels that it would be appropriate to do so. Where a decision is taken to offer debriefing meetings to unsuccessful applicants, the Contracting Authority needs to plan carefully for such meetings in order to maximise the benefit to be derived by applicants while at the same time minimising its exposure to the risk of a challenge. In this regard, a Contracting Authority will also be subject to the Freedom of Information Act and any requests for information submitted pursuant to it.

4.32 The Directives do not address the obligations of a Contracting Authority to provide information to one member of an unsuccessful applicant where the other members do not seek the information. As the Directives refer to "candidates" and "tenderers", it is probable that the obligation only arises where the consortium as a whole makes the request.



V. Tendering Process

Introduction

5.1 Having selected the applicants that will be invited to submit a tender for a project, the next step is to finalise the tender documents and obtain tenders. The process of preparing the tender documents should as far as practicable be commenced during the prequalification phase. In the case of the restricted procedure, an Invitation to Tender is issued whilst in the negotiated procedure, an Invitation to Negotiate (which might involve a request to submit an indicative bid) is issued. There are differences in the way in which both procedures are treated. However, regardless of the procedure chosen, the tender documents must be developed as fully as possible to minimise the scope for requests for clarification (and, where the negotiated procedure is used, the scope for negotiation).

Restricted Procedure

Tender Documentation

5.2 The minimum time limit for the receipt of tenders fixed by a Contracting Authority may not be less than 40 days from the date of dispatch of the Invitation to Tender. That period may be reduced to 26 days if a prior information notice has been sent to the Official Journal of the European Communities at least 52 days (and not more than 12 months) prior to the date on which the contract notice was dispatched to the Official Journal. However, the likelihood is that in view of the complexity of Public Private Partnerships in the roads, water and waste sectors, a Contracting Authority will not rely on the reduced period and will in fact allow a period significantly longer than the minimum 40 days.

5.3 The Invitation to Tender will usually consist of the Instructions to Tenderers, Project Agreement and the Output Specification (and any other documentation considered relevant by the Contracting Authority, for example, site investigation data, volume forecasts and land ownership details). A brief description of the contents of these important documents is set out below (see also the separate Guidance Notes entitled Output Specifications and Contractual Issues):

• Instructions to Tenders

This volume of the Invitation to Tender will provide background information on the project and present a summary of the key commercial and service requirements underlying the project. It will then describe in detail the nature of the tendering process, the format in which tenders are to be submitted and the information that all tenderers are required to include within their submissions. It will conclude by setting out the specific criteria that will be used by the Contracting Authority and its appointed advisers in the evaluation of the tenders. In addition, it will also contain a number of detailed appendices that address a range of other matters including, where appropriate, the structure of the Financial Model and the anticipated allocation of risk between the Contracting Authority and the Contractor.



• Output Based Specification

This volume of the Invitation to Tender will define the precise needs of the Contracting Authority and set out the detailed requirements underlying the project. It will describe the scope and nature of the services required and identify acceptable performance standards for each service requirement. It should be noted that the Output Specification will not seek to be prescriptive or to set out the precise manner in which the requirements of the Contracting Authority are to be met. As a result, tenderers will be encouraged to come forward with innovative and flexible solutions that are capable of satisfying the project objectives while offering value for money.

• Project Agreement

This volume of the Invitation to Tender will set out in detail the views of the Contracting Authority on the exact nature and structure of the contractual arrangements that are to be put in place between the Contracting Authority and the preferred tenderer.

5.4 The Contracting Authority must issue the Invitation to Tender to the short listed applicants to submit their tenders simultaneously and the Invitation to Tender must include at least the following information:

• where appropriate, the address of the individual from which the tender documents and supporting documents can be requested and the final date for making such a request (if the documents are not issued directly);

• the final date for receipt of tenders, the address to which they must be sent and the language or languages in which they must be drawn up;

• a reference to the contract notice published;

• an indication of any documents to be annexed by the tenderers; and

• the criteria for the award of the contract if these are not given in the contract notice. It is recommended that the contract notice in the Official Journal simply refer to the tender documents on this point, to allow more time for thought on the criteria and weightings to apply.

5.5 The Instructions to Tenderers should indicate in clear language the requirements of the Contracting Authority in relation to the nature of a compliant tender. Tenderers should be left in no doubt as to the consequences, and what will constitute, a non-compliant tender. At a minimum, each tender, if further consideration is to be given to it, should address every aspect of the Output Specification. The Instructions to Tenders should make it clear that the Contracting Authority will require strict compliance with the minimum standards; otherwise, not all tenders will be on an equal footing. The Instructions to Tenderers should also very clearly indicate how variant tenders will be dealt with and set out the criteria for the review by the Contracting Authority of any alternative proposals submitted by tenderers. Once again, the evaluation criteria used must be objective, fair and reasonable.



5.6 Under the Directives the criteria may either be lowest price or most economically advantageous tender. Having regard to the complexity of contracts in the roads, water and waste sectors, the lowest price criterion is not considered suitable. The criterion of most economically advantageous tender can be broken down into a number of sub-criteria and example sub-criteria are set out below. A Contracting Authority may wish to prescribe other objective criteria.

price;

financial viability, if private finance is an element of the project;

delivery, or completion date;

running costs;

cost effectiveness;

quality;

aesthetic and functional characteristics;

technical merit of the proposal; and

security of supplies.

5.7 In the contract notice or the tender documents, the Contracting Authority, in listing the criteria from the above menu (or any other appropriate sub-criteria) should list them in descending order of priority if it is proposing to attach a different weighting to each of those criteria. If it does not wish to attach any weighting, then it should indicate clearly that they all have equal importance. This will facilitate tenderers in compiling their tenders to know how much emphasis to place on particular aspects. The Contracting Authority should consider making the weighting factors or marks available to the tenderers with the tender documents to enhance the process. There is no obligation specifically to do so but a Contracting Authority cannot be criticised on the grounds of objectivity, fairness and transparency if it chooses to release this information.

Tender Preparation

5.8 Tenders must be submitted in writing either directly or by mail. However, Council Directive 97/52/EEC provides that Member States may authorise the submission of tenders by any other means as long as it is possible to ensure that:

• each tender contains all information necessary for its evaluation;

• the confidentiality of tenders is maintained pending their evaluation;

• where necessary, for reasons of legal proof, such tenders are confirmed as soon as possible in writing or by dispatch of the certified copy; and

• tenders are opened after the time limit for their submission has expired.



5.9 In addition, reference should also be made where appropriate to any local bylaws governing the opening of tenders.

5.10 The Directives do not permit in the use of the restricted procedure the concept of the submission of outline proposals by applicants or tenderers. In this regard, the restricted procedure is quite rigid. Thus, tenderers cannot be selected on the basis of their outline proposals nor, at the second stage, can the selected list of tenderers be reduced further by the use of an Invitation to Submit Outline Proposals.

5.11 This is potentially a material problem in the case of Public Private Partnership procurements. However, there is nothing in the Directives to prevent a Contracting Authority from inviting comments from applicants on the tender documents in advance of the date for submission. This should allow the Contracting Authority, effectively, to market test the documents. Having received submissions from tenderers, it can then decide which comments to take on board and if appropriate, issue amendments to the tender documents in good time to the tenderers. If necessary, the tender period can also be extended.

5.12 The Contracting Authority may decide to hold consultative meetings with tenderers during the tender period. This may take the form of an open day or days or, in the alternative, and preferably, a series of individual meetings with tenderers. These meetings provide an opportunity for the Contracting Authority to make a presentation (where considered desirable) and allow the tenderers to ask questions so that they better understand the requirements of the Contracting Authority. Care should be taken to ensure that an environment for collusion is not created.

5.13 The advantage of having such a consultation process in the form of an open day with all tenderers present is that this is the most open and transparent way of conducting the process. On the other hand, tenderers may be reluctant to open up at such meetings in front of their competitors. For this reason, serious consideration should be given to the use of individual meetings with tenderers with circulation to all of minutes of those meetings. Any confidential issues relating to, for example, innovative processes would not have to be circulated.

5.14 The Contracting Authority must be careful to ensure transparency in the conduct of such meetings so as to avoid any allegation of bias or improper procedure. Careful and accurate minutes of the meetings should be taken.

5.15 The clarifications arising from individual meetings should be sent to the relevant tenderers to allow them to identify those matters that they consider confidential or commercially sensitive, prior to the Contracting Authority circulating the minutes to all tenderers. Contracting Authorities, of course, must be mindful of the provisions of the Freedom of Information Act in this regard.

Tender Evaluation

5.16 Once the tenders have been compiled and received the process of evaluating them begins after the closing date. Tenders should initially be assessed for compliance with the Instructions to Tenderers and the other tender documents.



5.17 If, having checked all tenders, none of them are fully compliant, the Contracting Authority has the option to move into the negotiated procedure (please refer to the separate Guidance Note entitled Procurement Procedure Selection). Before moving to the negotiated procedure, the Contracting Authority should first formally close the restricted procedure. However, it is suggested that the use of the negotiated procedure in this instance should follow as closely as possible the restricted procedure. This means limiting the negotiations to requesting the tenderers to bring their tenders into compliance with the tender documents, removing any qualifications that may have been made to contract conditions and other non-compliant elements but not allowing any adjustment to the tender sum. The tender of any tenderer who does not wish to proceed on this basis can then be rejected.

5.18 In the process of evaluating tenders, the Contracting Authority will use only the evaluation criteria stated in the contract notice published in the Official Journal or, if not so published, as indicated in the tender documents. A Contracting Authority must be careful in its discussions with tenderers in light of restrictions placed upon them. Whilst the process of post-tender discussions with tenderers must be relatively fluid, at all times a Contracting Authority must be vigilant to ensure that these discussions relate only to the clarification or supplementing of tenders and not negotiation. For instance, unlike the negotiated procedure (and the development of that process in the United Kingdom under the Private Finance Initiative), the concept of best and final offer is not one that belongs within the restricted procedure.

Negotiated Procedure

Bid Documentation

5.19 Under the negotiated procedure, bidders are selected to negotiate the contract and will normally be asked to submit indicative bids. Broadly speaking the negotiated procedure and restricted procedure are run in the same fashion until the bidders are selected. Key differences with the negotiated procedure include the ability:

• to use an Invitation to Submit an Outline Proposals;

• to negotiate (and not just clarify or supplement bids) with one or more parties;

• to receive a best and final offer; and

• to have a shorter period for submission of bids than in the restricted procedure, if considered appropriate.

5.20 The Invitation to Negotiate should comprise the Instructions to Bidders, together with a full Project Agreement and Output Specification. Please refer to paragraph 5.3 above for a description of these important documents. The Invitation to Negotiate will make bidders aware of what is expected so that meaningful responses can be given. It should be remembered that the purpose of any negotiations is to improve an offer already under evaluation. Sufficient time should be given to allow bidders to compile their bids. The period may approximate to the 40 days allowed under the restricted procedure, although this should be extended as necessary.



5.21 Once bids have been received, they should be assessed for compliance with the Invitation to Negotiate. If compliant, the bids should then be evaluated using the most economically advantageous criteria. It is only when the process of evaluation has been completed that negotiations (if any) should begin. As a general rule, the Contracting Authority should try to limit as far as possible the scope and range of issues to be negotiated, to stay as close as practicable to the original Invitation to Negotiate and to minimise the time period leading up to contract award.

Bid Preparation

5.22 No minimum time limit is prescribed in the Directives for submission of bids under the negotiated procedure. Indicative bids will provide a firm basis for negotiation. However, there is no mandatory requirement for indicative bids and the Contracting Authority could, if it wished, proceed directly to negotiations. Pre-tender negotiations are also permissible.

5.23 The Directives, however, require that the number of bidders admitted to negotiate may not be less than three provided there is a sufficient number of suitable applicants. In this context it should be noted that the Green Book states that "in all cases, but particularly where it is not feasible to have open tendering, every effort should be made to ensure adequate competition; the aim should be to obtain at least three realistic tenders in each case".

Bid Evaluation

5.24 The award criteria that apply under the negotiated procedure are the same as those in the restricted procedure. Once again, it is considered that lowest price is not a sufficient criterion and most economically advantageous tender should be the chosen criterion.

Conduct of Negotiations

5.25 The Directives do not set out the detail of how negotiations should be carried out. Nevertheless, there are certain overriding principles emanating from the Treaty of Rome which must be complied with such as objectivity, transparency, fairness and equality of treatment. In any event, negotiations must not result in a significant change either to the scope of the project itself or to any of the bids submitted. Any significant alteration could invalidate the selection. For instance, if a preferred or successful bidder were permitted to negotiate a significant reduction in its obligations under the project from those in the bid documents, then the unsuccessful bidders would have grounds to argue that there has been unfair discrimination. Obviously whether any such infringement occurs will be a question of fact and degree which will have to be judged on a case by case basis. Having regard to the complexities associated with contracts in the roads, water and waste sectors, it is recommended that if the negotiated procedure is justified and used, indicative bids should be sought and that they should form the basis for any subsequent negotiations.



5.26 It is outside the scope of this Guidance Note to provide detailed advice in relation to the conduct of negotiations with a preferred bidder and the Central Authority should consider preparing detailed guidance for reference by those conducting negotiations. In addition, care should be taken by the Contracting Authority to ensure that, during the conduct of negotiations, a contractual relationship does not develop between the parties.

5.27 When considering the conduct of negotiations, a Contracting Authority should set up a separate negotiating team of no more than four to six people who should report to a project steering group in accordance with a predefined negotiation brief. Moreover, the Contracting Authority should also:

• organise a negotiation skills training session for the negotiating team;

• thoroughly analyse the bid documents and in particular the detail set out in the Financial Model;

• consider whether any of the bidders should not proceed further at this stage;

• identify and clarify the main issues to be negotiated;

• agree a shortlist of bidders for negotiation;

• agree detailed tactics for the negotiation process;

• agree with the shortlisted bidders a plan for taking the negotiations forward. This provides an opportunity to review the plan in light of developments to date. Involving the bidders in the review will also help to achieve their acceptance of the plan and this usually increases the likelihood of them adhering to it;

• consider requiring the bidders to involve their funders. Early involvement will help to speed up the final stages of the transaction although funders will usually only consider a project seriously when the competition is narrowed down to two bidders.

5.28 If reasonable terms are included in a properly drafted Project Agreement, then the necessity and scope for negotiating on those terms should be limited. On the question of negotiating contract terms, the following should be remembered:

• the Contracting Authority needs to recognise that in relation to risk allocation, there is a growing body of national and international precedent that can be considered (and in this regard the Guidance Notes entitled Risk Assessment and Key Contractual Issues reflect this experience); and

• the Contracting Authority is not allowed to depart significantly from the terms of the Invitation to Negotiate otherwise the procedures will be unfair.



5.29 In relation to the negotiation of operational and design aspects, the following should be remembered:

• bidders need to be informed of any concerns about the technical components of their bids;

• the discussions will have to focus on how the design and operating regime will complement each other, particularly in relation to innovative design solutions, while ensuring that there are no significant departures from the contents of the Output Specification;

• the Contracting Authority will have to put in place arrangements for its negotiating team members to report the result of individual negotiations (if any) to one another;

• the time spent on negotiations should be controlled and the whole process should converge once the Contracting Authority has concluded the basis of the best and final offer;

• minutes of all meetings should be maintained and, if possible, agreed with the relevant bidder before the meeting has concluded;

• if discussions are continuing with more than one bidder leading up to the recommendation of a preferred bidder, it is important that any runner up is not kept in the competition unnecessarily;

• having selected the preferred bidder, the Contracting Authority should enter final negotiations. It is recommended at this stage that other bidders should be informed of the status of the process and should be debriefed. However, consideration should be given to requesting those other bidders to keep offers open for a further period so that an entirely new process need not be begun if negotiations with the preferred bidder collapse irretrievably;

• all outstanding points and details should be resolved leading to the ability of the Contracting Authority to enter into a contract. The Contracting Authority should work with its legal advisers to ensure that all relevant documents are properly incorporated into the contract for execution.

Report on the Tendering Process

5.30 On completion of a Public Private Partnership procurement, the Contracting Authority should prepare a Report on the Tendering Process. The report should contain a full summary of each phase in the procurement process, including:

• the requirements of the Output Specification;

• a summary of the overall procurement timetable and key outcomes, including the qualification of interested parties, negotiation with bidders (under the negotiated procedure), tender evaluation and selection of preferred tenderer;



• the results of the tender evaluation, including specific details of the content of each tender, the compliance assessment, the assessment of tenders against the stated evaluation criteria, and the selection of a preferred tender;

• the results of the value for money assessment that must be undertaken to ensure that the preferred tender provides value for money;

• the conclusions on the accounting treatment for the Public Private Partnership project; and

• the recommendations in relation to contract award.

5.31 The Report on the Tendering Process should form the basis of a submission from the Contracting Authority to the Central Authority seeking approval to enter into a Public Private Partnership contract with the preferred private sector contractor.

Tender Costs

5.32 It is recognised that the rules set out in the Directives are not ideal for the procurement of Public Private Partnership contracts. The tender costs will in all probability be significant and it is not inconceivable that they may be so high going forward that it may be a disincentive to tenderers, particularly if the unsuccessful tenderers have no opportunity of recovering or mitigating the costs. The issue of tender costs and the long term impact on the Public Private Partnership process will have to be closely monitored and reviewed from time to time.



VI. Value for Money Assessment

Introduction

6.1 The final assessment of whether a Public Private Partnership represents improved value for money can only be made at the conclusion of the procurement process. At this stage, the Central Authority and the Department of Finance need to be satisfied that the preferred tender represents value for money before approving the award of contract.

6.2 The achievement of value for money in a Public Private Partnership procurement is evidenced through effective competition between potential private sector contractors and, on projects that involve public money, through a value for money assessment of the costs and benefits of the preferred Public Private Partnership tender.

6.3 The value for money assessment is therefore undertaken once all the tenders have been evaluated and a preferred tender selected. The nature of the value for money assessment will depend on whether the Public Private Partnership is financially free standing, generates the majority of its revenues from third parties, or is reliant on public subvention. The nature of the value for money assessment for each type of project is summarised in the paragraphs that follow.

Financially Free Standing Projects

6.4 Financially free standing projects require the Contractor to recover all costs through charges on the final users of the service. The public sector plays a facilitating role but no public money is involved. It is therefore the responsibility of the Contractor to determine whether the project is commercially viable and suitable for investment.

6.5 The Contracting Authority should satisfy itself through the Project Appraisal and the Public Private Partnership Assessment that a Concession contract is the preferred form for the project, and that the application of user charges is appropriate. The Contracting Authority should determine its preferred approach to the setting of user charges, and develop a payment mechanism that will deliver government policy, the objectives of the project and protect the public interest. Further advice on this issue is provided in the Guidance Note entitled Payment Mechanisms.

6.6 Given that the project involves a commercial transaction between the Contractor and the users of the project and that there is no public money involved, there is no need to undertake a detailed value for money assessment at the end of the procurement process. Value for money is achieved through the competitive tendering process.

Concession Contracts with Public Subvention

6.7 The issues set out above for financially free standing projects also apply to those projects where the Contracting Authority contributes a subvention but the revenues come principally from user charges.



6.8 However, such projects do involve the investment of public money and there is therefore a need to ensure that the project represents the best use of the public subvention. For this reason the benefit gained from applying the subvention to the Public Private Partnership project should be compared with the benefit gained from applying the subvention to an alternative project that would otherwise not proceed. Policy priorities will be an important consideration in this regard.

6.9 Public subvention could take a number of forms, including capital grant and revenue support. Indirect costs, such as the cost to the Contracting Authority of providing connecting roads to a major road scheme, should also be taken into consideration.

Projects where the Public Sector is the Main Purchaser

6.10 In the case of projects where the public sector is the sole or main purchaser of the services being provided (i.e. direct and indirect subventions are greater than 50 per cent of total cost), a detailed value for money assessment is required at the end of the procurement. The assessment should compare the costs and benefits (in monetary and non-monetary terms) of the preferred tender with the costs and benefits of traditional procurement, or under certain circumstances, with other comparable measures. The parameters used to undertake the value for money assessment for such projects are established at the end of the Public Private Partnership Assessment. The requirements of the value for money assessment for these projects are described in the paragraphs that follow.

Elements of the Value for Money Assessment

6.11 The value for money assessment should be undertaken at the end of the tendering process once a preferred tender has been selected. In the case of projects where the public sector is the sole or main purchaser, the value for money assessment comprises two key elements:

• Monetary comparison - comparison of the cost of the preferred Public Private Partnership tender, with the cost of traditional public sector procurement, expressed in terms of discounted cashflows over the life of the contract (the Financial Comparator); and

• Non-monetary comparison - comparison of all the factors that are difficult to quantify in monetary terms, but their value to government and the wider public is significant. Examples include speed of project delivery, quality of service, and security of supply.

6.12 Under certain circumstances other measures such as independent price benchmarks and comparable Public Private Partnership projects may be used instead of a Financial Comparator. The circumstances under which these measures may be used are set out in the separate Guidance Note entitled Public Private Partnership Assessment. However, it is recommended that for the pilot projects at least, wherever possible the Financial Comparator should be based on the estimated cost of delivering the project (to the standards set out in the initial output specification) through traditional public sector procurement.



6.13 Whilst the value for money assessment is undertaken formally at the end of the tendering process, the Financial Comparator can be updated during the course of the procurement to reflect the specific requirements of the Output Specification and the Project Agreement, including:

• changes to the price base used to cost the project;

• changes to the scope of the project in terms of service requirements and performance standards;

• changes to both the allocation and valuation of risk arising from the detailed risk assessment; and

• changes to the key contractual terms, including contract duration and project phasing.

6.14 Once a preferred tender has been identified, then the cost of the preferred Public Private Partnership tender, expressed in terms of discounted cashflows over the life of the contract, should be compared with the Financial Comparator.

6.15 At the same time, a non-monetary comparison should be undertaken to identify the comparative cost or benefit of the preferred tender relative to traditional procurement. The results of the non-monetary comparison may be usefully presented in the form of impact statements or a weighting and scoring matrix.

6.16 The non-monetary factors to be considered by the impact statements or weighting and scoring matrix should be established at the end of the Public Private Partnership Assessment. Consideration should be given to all the factors that are difficult to quantify in monetary terms, but whose value to government and the wider public is significant. Examples include speed of project delivery and quality of service.

6.17 The results of the monetary and non-monetary comparisons should then be combined to provide an overall view on whether the preferred tender represents improved value for money when compared to traditional procurement. In some cases, for example when the preferred tender results in a greater financial cost than traditional procurement but also results in significant additional non-monetary benefits, a judgement has to be made as to whether the additional benefits provided by the preferred tender are worth the additional cost. The basis for such decisions should be clearly recorded in the value for money assessment and included in the Report on the Tendering Process.

Disclosure of the Financial Comparator

6.18 The Financial Comparator should be prepared and updated by the financial advisers to the Central Authority, with relevant input from the Contracting Authority and the technical advisers. It is important that the results of the Financial Comparator remain confidential and therefore the Central Authority will communicate the details of the Financial Comparator to the Contracting Authority and its advisers only after tenders have been received.



6.19 Details of the costs included within the Financial Comparator should never be disclosed to tenderers as this could weaken the position of the Contracting Authority in terms of obtaining the best possible tender. However, where competition is strong, it may be appropriate to disclose details of the assumptions used within the Financial Comparator to avoid misunderstandings regarding required service levels, and to encourage greater innovation and cost reduction from private sector tenderers.

Results of the Value for Money Assessment

6.20 The results of the value for money assessment determine whether or not establishing a Public Private Partnership with the preferred private sector contractor will deliver improved value for money compared with traditional procurement. The value for money assessment is the fundamental tool in deciding whether or not to proceed with a Public Private Partnership contract. The results of the value for money assessment should be set out in detail in the Report on the Tendering Process, as they will inform the decision of the Central Authority on whether or not to approve the Contracting Authority entering into a Public Private Partnership contract with the preferred Contractor.

6.21 If the results of the value for money assessment are not entirely positive, the Contracting Authority needs to consider the realistic options for the project and reflect these in the Report on the Tendering Process. This should include the implications of abandoning the project, the chances of an alternative being implemented (particularly if the tendering for the Public Private Partnership has been competitive), the likely market impacts and the impact of time delays. It will often be more expensive in overall economic terms to abandon an infrastructure project having gone through complex procurement.

6.22 It is essential therefore that the Report on the Tendering Process for such a project is retained by the Central Authority and made available to other Contracting Authorities to ensure that the experience of completed PPP projects is taken into account in the development of future Public Private Partnerships.



VII. Post Contract Award

Debriefing of Tenderers

7.1 After a contract has been awarded, a Contracting Authority should consider having a debriefing for unsuccessful tenderers. The minimum requirement in the Procurement Directives is that the Contracting Authority, within 15 days (and promptly in the case of the Utilities Directive) of the date on which a written request is received, must inform any eliminated tenderer of the reasons for the rejection of its tender and of the characteristics and relevant advantages of the tender selected as well as the name of the successful tenderer.

7.2 However, a Contracting Authority is permitted by the Directives to decide to withhold certain information on contract award where the release of that information:

• would impede law enforcement or otherwise be contrary to the public interest; or

• would prejudice the legitimate commercial interests of particular undertakings, public or private; or

• may prejudice fair competition between contractors.

7.3 In this regard, the provisions of the Freedom of Information Act, 1997 will also be relevant.

Award Notices

7.4 The Directives require Contracting Authorities who have awarded a contract (entered into a binding contract) to make known the result by means of an award notice. This notice is to be published in accordance with the model set out in the Annex to the relevant Directives. However, certain information on contract award may, in certain cases, not be published where the reasons noted in paragraph 7.2 apply. The award notice must be sent to the Official Journal of the European Communities by the latest 48 days after the award of the contract in question.



VIII. Remedies

Introduction

8.1 The importance of strict compliance with, and adherence to, the provisions of the various Directives becomes apparent in light of the remedies that are available to a party who objects to the procedures adopted in the award of a contract.

8.2 A disappointed tenderer may challenge the award of a contract to another tenderer on the basis of an allegation that the Directives have not been complied with in some way. The existence of the Remedies Directives (operative in the Works, Services and Supplies as well as the Utilities regimes) which have been transposed into national law makes it important to ensure that, where appropriate, the procedures are followed strictly. More will be said of the Remedies Directives below.

Complaint to European Commission

8.3 Outside of the Remedies Directives, a party may make a complaint to the European Commission, which in turn may utilise its power under Article 226 of the Treaty of Rome. This gives the Commission a crucial role in supervising the compliance by Member States with their obligations under the Treaty of Rome including compliance with specific Directives. If the Commission considers that a Member State has failed to fulfil an obligation under the Treaty it may, after certain procedural steps, bring the matter before the European Court of Justice.

8.4 The Commission cannot award damages to a complainant; the complainant must avail of its remedy in the High Court to obtain damages. The Commission is limited to bringing proceedings not against the offending Contracting Authority but rather the Member State itself under Article 226 of the Treaty of Rome.

8.5 However, it should be noted that a party does not need to have a legal interest in the contract in order to bring forward a complaint. Accordingly, the complainant can be a taxpayer or an interest group (not just a dissatisfied tenderer). The complaint is made free of charge (although legal representation may be required) and the identity of the complainant will not be disclosed by the European Commission.

Remedies Directives

8.6 The Remedies Directives do not seek or set out to harmonise the national laws of each Member State but rather give minimum criteria and safeguards to ensure protection of the rights that flow from the Classic and Utilities Directives. An application for a remedy will be addressed to the High Court and the remedies include:



• Interim measures - these are measures to suspend or to ensure the suspension of the procedure of the award of the contract or the implementation of any decision taken by the Contracting Authority. This allows action to be taken swiftly even when a decision has been made. The remedy essentially amounts to injunctive relief.

When considering whether or not to order interim measures, the High Court may take into account the probable consequences of the measures for all interests likely to be harmed as well as the public interest, and may decide not to grant such measures where their negative consequences could exceed their benefits. However, a decision not to grant interim measures will not prejudice any other claim of the person seeking relief, such as a claim for damages.

• Setting aside of unlawful decisions - this allows a decision that has been taken unlawfully to be set aside and also allows the removal of discriminatory technical, economic or financial specifications in the procurement documents. An aggrieved tenderer may seek this remedy at all stages of the procurement process when an unlawful decision has been made. For instance, the remedy is available where a decision had been made to exclude particular tenderers from the award procedure on grounds other than those grounds permitted in the appropriate Directives. The High Court may declare a contract, or any provision of it, void, declare that the contract may have effect only subject to such variation as the High Court shall think fit or make such other order concerning the validity of the contract or any provision of it as the Court shall think fit.

• Damages - where a contract has been concluded subsequent to its award, the High Court may award damages to any person harmed by an infringement of the legislation. This is quite wide-ranging in that it envisages damages being awarded to any person harmed which is a wider category than simply the tenderer who stood to obtain the contract. It conceivably allows an award of damages to all candidates who took part in the whole tender process to which the infringement relates. The method that would be used to calculate these damages, however, remains to be determined, as the Remedies Directives do not specifically address this issue. That will be left to the national courts.

A person harmed by an infringement may be equated with a person suffering loss due to a tortious act. Failure to comply with the procedures on the part of a Contracting Authority amounts to a breach of statutory duty. The measure of loss in tort is the compensation required to place one in the position one would have been in had the wrongful act not occurred. If the disappointed candidate would not, in any event, have secured the contract, he has suffered no loss. A complainant may also wish to frame an action on the basis of damages for loss of chance.



The point remains to be decided, but it would seem that a disappointed applicant who could prove that he would have been the successful tenderer in the absence of an infringement of the rules, may be able to recover his loss of profits, as well as the cost of preparing the tender where it could be shown that he would have recovered those costs, had he been successful in obtaining the contract.



IX. Conclusions and Recommendations

Principles

9.1 The principles of objectivity, transparency, fairness and equality of treatment should inform all of the steps taken by a Contracting Authority in the procurement of a Public Private Partnership project regardless of the procedure adopted.

Minimum Periods

9.2 The minimum periods for preparation and submission of meaningful tenders under the Classic Directives are too short for Public Private Partnership contracts. Serious consideration should be given to setting longer periods when the contract notice is being prepared. The length of the tender period will be a matter for decision on a contract by contract basis but is unlikely to be less than three months.

Number of Tenderers

9.3 In the case of the restricted procedure a number of tenderers should be prescribed in the contract notice, and to keep the number of tenderers to a manageable level a range of between five and seven should be prescribed and serious consideration should be given to limiting the number to five. In the case of the negotiated procedure, the minimum permissible number of applicants admitted to negotiate is three and that is the number that should be set out in the contract notice.

Prequalification of Tenderers

9.4 A Project Information Memorandum should be prepared which, while general in nature, will give information sufficient to fully inform the candidates in general terms of the size, nature, location and complexity of the project.

9.5 A proforma Request for Prequalification should also be prepared for each project. It consists of a proforma questionnaire that must be completed by each applicant. Such a document is helpful for both applicants and the Contracting Authority as it reduces the risk of the required information not being forwarded and allows the Contracting Authority to review, in a structured and convenient way, all of the submissions received. It is important to note that the Directives limit the kinds of questions that can be asked and it is important that only legitimate questions are asked.

9.6 The Contracting Authority should consider using contractor briefing meetings prior to the date for submission of expressions of interest and if this option is to be exercised then details of the information session should be set out in the contract notice to be published in the Official Journal.

9.7 Since it is possible that more applicants will submit an expression of interest than are prescribed in the range in the contract notice, the Contracting Authority should rank the applicant using a scoring system.



9.8 Whilst compliance with the Directives does not require the scoring system to be made public, the Contracting Authority must be guided by the principles of objectivity, fairness and transparency of procedures in compiling the scoring system. Serious consideration should be given to the publication in the Project Information Memorandum of the scoring system to be used. If it is not to be published it should, in any event, be prepared (as a matter of good practice) prior to the latest date for receipt of requests to participate at the latest.

Tendering Process

9.9 The process of preparing the tender documents should, as far as practicable, be commenced during the prequalification phase. The tender documents must be developed as fully as possible to minimise the scope for requests for clarification in the case of restricted procedure and the scope for negotiation in the case of the negotiated procedure.

9.10 In compiling the tender documents, the Instructions to Tenderers should indicate in clear language the requirements of the Authority as regards compliant and non-compliant tenders so that tenderers are left in no doubt as to the consequences, and what will constitute, a non-compliant tender. The Instructions to Tenderers should also clearly indicate how variant tenders will be dealt with and should set out the criteria for the review by the Contracting Authority of any alternative proposals submitted by tenderers.

9.11 It is not recommended that the lowest price criterion be used for Public Private Partnership projects in the roads, water and waste sectors; the most economically advantageous tender criterion should be used allowing the Contracting Authority to develop its own sub-criteria. The sub-criteria should be set out in the tender documents if they are not available for publication in the contract notice. If weighting is to be attached by the Contracting Authority to the sub-criteria, then they should be made known clearly to the tenderers.

9.12 Contracting Authorities should consider inviting comments from tenderers on the tender documents in advance of the date set for submission, effectively allowing market testing of the documents. In addition, the Contracting Authority should consider holding consultative meetings with tenderers during the tender period in the form of ‘open days’ or, preferably, a series of individual meetings with tenderers. As always, the Contracting Authority must be concerned with transparency, objectivity and fairness of procedures.

9.13 In the event that none of the tenders submitted are fully compliant and the Contracting Authority decides to move from the restricted to the negotiated procedure, it should follow as closely as possible the restricted procedure in the conduct of the negotiated procedure in that circumstance.



Using the Negotiated Procedure

9.14 Serious consideration should be given to the preparation of detailed guidance to provide a consistent framework for the conduct of negotiations where a procurement has been commenced with the negotiated procedure. The Contracting Authority should be mindful when conducting negotiations that, whilst there are no rules set out in the Directives, the principles in the Treaty of Rome of objectivity, transparency, fairness and equality of treatment will apply. Those principles also apply to any rules which member states may set down for procurement procedures for works and services concession contracts in the absence of specific provisions in the Directives.

Report on Tendering Process

9.15 On completion of a Public Private Partnership procurement, the Contracting Authority should prepare a Report on the Tendering Process. The report should provide a detailed summary of each phase in the procurement process, including:

• the requirements of the Output Specification;

• a summary of the overall procurement timetable and key outcomes, including the qualification of interested parties, negotiation with bidders (under negotiated procedure), tender evaluation and selection of preferred tenderer;

• the results of the tender evaluation, including specific details of the content of each tender, the compliance assessment, the assessment of tenders against the stated evaluation criteria, and the selection of a preferred tender;

• the results of the assessment to show that the preferred tender provides value for money;

• conclusions on the accounting treatment for the Public Private Partnership project; and

• recommendations on contract award.

9.16 The Report on the Tendering Process should form the basis of a submission from the Contracting Authority to the Central Authority seeking approval to enter into a Public Private Partnership contract with the preferred private sector supplier.

Disclosure of the Financial Comparator

9.17 Where competition is strong, it may be appropriate to disclose assumptions used within the Financial Comparator to avoid misunderstandings regarding required service levels and relevant budget constraints, and to encourage greater innovation and cost reduction from private sector tenderers.



9.18 However, there is a limit as to what information should be disclosed to tenderers, and it is recommended that the Contracting Authority should never disclose details of the Financial Comparator that would weaken its position in terms of obtaining the best possible tender.

Tender Costs

9.19 In relation to tender costs, it is recognised that the procedures set out in the Directives are not ideal for the procurement of Public Private Partnership contracts, and that tender costs will, in all probability, be significant. It is recommended that the issue of tender costs and the long term impact of high tender costs for the Public Private Partnership process will have to be monitored.



Appendices

A. Public Private Partnership Policy Framework



Public Private Partnership Policy Framework

The Public Private Partnerships Policy Framework comprises a series of fifteen individual Guidance Notes, the titles of which are as follows:



• Legal Context





• Stakeholder Consultation



• Risk Assessment







Appendices

B. Information and Relevant Legislation



Information and Relevant Legislation

Introduction

1. Since July 1998, the tenders section of the Official Journal of the European Communities is available in electronic form only either in CD format or by way of on-line access to the Tenders Electronic Daily database (through the Internet or X25 network).

2. Notice proformas are available at http//simap2.infeurope.lu on the Internet.

Relevant Legislation

3. The following is a list of the relevant EU and Irish legislation which, whilst not comprehensive, sets out the principal sources of procurement legislation:-

EU Legislation

Council Directive 93/37/EEC (the Works Directive)

Council Directive 93/36/EEC (the Supplies Directive)

Council Directive 92/50/EEC (the Services Directive)

Council Directive 93/38/EEC (the Utilities Directive)

Council Directive 97/52/EC (the Amending Directive)

Council Directive 98/4/EC (the Amending Utilities Directive)

Council Directive 89/665/EEC (the Remedies, Works and Supplies Directive)

Council Directive 92/13/EEC (the Remedies, Utilities Directive)

Statutory Instruments

European Communities (Award of Public Works Contracts) Regulations 1992 (SI No. 36 of 1992)

European Communities (Award of Public Supplies Contracts) Regulations 1992 (SI No. 37 of 1992)

European Communities (Award of Public Supply Contracts)(Amendment) Regulations 1994 (SI No 292 of 1994)

European Communities (Award of Public Works Contracts)(Amendment) Regulations 1994 (SI No 293 of 1994)

European Communities (Award of Public Services Contracts)(Amendment) Regulations 1994 (SI No. 378 of 1998)



European Communities (Award of Public Supplies Contracts) Regulations, 1998 (SI No. 379 of 1998)

European Communities (Award of Public Works Contracts)(Amendment) Regulations, 1998 (SI No. 380 of 1998)

European Communities (Award of Contracts by Entities Operating in Water, Energy, Transport and Telecommunications Sectors) Regulations 1999 (SI No. 31 of 1999)

European Communities (Review Procedures for the award of contracts by entities operating in the water, energy, transport and telecommunications sectors) Regulations 1993 (SI No 104 of 1993)

European Communities (Review Procedures for the award of public supply, public works and public services contracts) (No.2) Regulations 1994 (SI No 309 of 1994).



Appendices

C. Contents of a Typical Project Information Memorandum



Contents of a Typical Project Information Memorandum

Section

I Introduction

Overview Definition of Terms Procurement Procedure Submission Requirements Disclaimers

II Project Background

Strategic Context Current Position Demand Forecasts Project Objectives Project Requirements

III Proposed Contract

Contracting Authority Key Contractual Terms Initial Risk Allocation

IV Procurement Process

Procurement Timetable Qualification Stage Tendering Stage Contract Award Stage

V Prequalification Procedure

Qualification Criteria Additional Considerations


Project Management · 2016. 2. 18. · Project Management of Public Private Partnership (“PPP”) projects. The purpose of this Guidance Note is to outline the recommended structures

Documents