Modern procurement practices allow procuring entities to engage the market in an effort to develop specifications when procuring new technologies. The extent of the engagement of the market in conventional procurement involves trade fairS and exhibitions and, to some extent, consultative meetings with prospective suppliers. Procuring entities might know exactly what they require in terms of infrastructure and technology when they invite proposals for public-private partnerships (PPPs). The solutions from probable partners then are presented with different risks and returns that cannot be evaluated by a conventional evaluation criteria. Going with a conventional evaluation criteria is a sign that the project is smoke-screening competition, in short, the procuring entity would have identified a partner already and the call for bids would merely be to sanitise and legitimise the process.
PURCHASING & SUPPLY: NYASHA CHIZU
Transparency becomes a paramount factor in the procurement of PPPs. It is vital in the sense that when one concludes a PPP contract with only one compliant proposal after all fail to meet the requirements of conventional specifications in the request for proposal, that process lacks integrity. Transparency in PPP procurement achieves better value for money emanating from strong governance systems that improve the management of project costs. Once project costs that encompass costs associated with project designs are curtailed, it achieves sustainable projects and the requirement for renegotiations is minimised during the life of the project. When transparency is embraced, the projects then deliver service that impact positively to the general society.
Request for proposals for PPP contracts will be advertised when it is a solicited project. The rules of competition will ordinarily be explained in the invitation. Providers would then submit proposals in response to the call. The procuring entity must then define how and to what extent they will interact with the prospective partners given that it is inevitable to communicate during the process. The rules of engagement, together with the extent of the engagement, must be specified in the request for proposal to attain transparency, fairness and integrity in the procurement process. The interaction with prospective bidders varies from a mere exchange of information to serious dialogue, such as interactive dialogue through meetings and conferences.
Clarifications during tenders are normal. The clarifications during conventional procurement are limited to seeking explanation of vague elements of the requirements. In the procurement of PPPs, request for clarifications interrogates the project where prospective bidders seek more information pertaining to the project, asking possible variations on the existing design. Such provisions are not available during conventional procurement.
The reason why the interaction with prospective partners during the request for proposal stage requires regulation is because in some, if not most, of the instances, it is the beginning of the evaluation process of proposals that leads to the award of the contract. The evaluation of proposals ordinarily takes an elimination route where offers are rejected as clarifications from both sides lead to a measure of suitability of the solutions. It is, therefore, imperative that such processes are fair and transparent from the outset.
The interaction with the identified partner extends after contract award and before contract signature. It proceeds into contract implementation and project management. Such interactions should also be regulated. The general rule is that there are some elements of the proposals that cannot be negotiated after contract award. The idea is to enhance integrity of the PPP procurement since the providers compete on elements of quality, cost and time associated with the project before the award. It would then be unfair to negotiate on such elements after one has submitted their best and final offer. The negotiations should be limited to the discussion of elements that are necessary for the effectiveness of the project only.
Conventional procurement does not at all allow for negotiation of bids submitted after a tender process. Even in situations where a tender closes with a sole bid, the assumption is that the sole bidder was not aware of the non-existence of competition on that particular procurement hence, there price is considered competitive unless there is evidence of corruption in the process. In such cases during conventional tenders, procuring entities can undertake due diligence on the bid before award to satisfy themselves that the offer is competitive.
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Procurement of PPPs requires that the process is transparent given the multi-levels of interactions with suppliers during the submission and evaluation of proposals.
Nyasha Chizu is a fellow of the Chartered Institute of Procurement and Supply writing in his personal capacity. Feedback: [email protected] Skype: nyasha.chizu
