As interest in market-led proposals gains momentum across
Australia, governments face some key challenges in ensuring their
market-led proposal policies:
are accountable and transparent; and
ensure successful proposals deliver clear value for money for
taxpayers (despite potentially not being value tested through a
competitive tender process).
However, equally challenging for governments, is balancing the
need to ensure these criteria are met – including delivering
quantifiable value for money for taxpayers – against
encouraging innovative ideas and private sector involvement in
major projects by ensuring good proposals are brought to life under
Some governments have been criticised for not bringing enough
proposals to completion. Others have implemented policies which
limit the types of proposals which may be submitted by the market.
Across Australia, there are variations in the criteria which need
to be met, and, the stages applicable, to a submitted proposal. The
policies reflect the difficulties in balancing the benefits of
flexibility against the need for policy certainty.
There are three key components of the process:
A market-led proposal must demonstrate
uniqueness. Meeting this requirement presents a
significant hurdle for many proponents. Uniqueness is assessed on a
subjective, contextual basis. It is important to provide detailed
guidance to proponents about how this is assessed, and to ensure
that the uniqueness test does not operate as a way of excluding
proposals which may otherwise have merit. For example, given that
the uniqueness test can function as a legitimate and defensible
justification for not testing the market, the reverse should be
permitted. That is, a failure to demonstrate uniqueness could be
used to trigger a market process, provided all the other
requirements are met.
The right to exclusive negotiation versus the option to
adopt a competitive process. Only one State has a policy
framework which expressly permits a proposal to revert to a
competitive process. Reversion to competition gives government more
flexibility, enables a proposal to be tested and may maximise the
chances of some version of the proposal achieving contract close.
Many other jurisdictions have policies which support exclusivity
reverting to competition in certain circumstances whilst still
recognising the value provided by the original proponent.
The relationship between proposal policy alignment and
project funding. A proposal will not be considered if it
does not align with government policy. The relationship between
this criteria and project status can create uncertainty. For
example, can a government consider a market-led proposal for a
project or service which has preliminary funding only? Should a
business case take account of a possibility that a proposal may be
submitted? It may be appropriate to more clearly delineate those
projects or services in respect of which an MLP will be
countenanced. For example, government could seek to drive and
stimulate the market by publishing a market-led proposal strategic
plan which specifically identifies project and investment
opportunities in respect of which proposals will be
Corrs has developed a thorough analysis of the MLP landscape in
the publication "
What's next for market-led proposal in Autralia?" In
it, we review the processes applying to market-led proposals and
make some suggestions for refinements which could be adopted in
the pre submission meeting;
the form and content of the proposal;
timelines for assessment; and
the costs incurred by both parties in terms of proposal
preparation, assessment and review.
We also identify some future trends in market-led proposals.
A number of MLP policies are under review, and we may soon see
some refinement as to the substance and structure of the process in
order to maximise benefits for both government and proponents.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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