Mikko AJ Ramstedt Senior Project Adviser Financial Partnerships Unit

1. Working with internationally oriented contractorsTraining event on PPP programming and process management 27 May 2008 Twinning Project CZ/2005/IB/FI/04 Mikko AJ Ramstedt Senior Project Adviser Financial Partnerships Unit

2. Introduction • Background • Issues • Contract • Importance of market soundings • How to organise the bid selection process • Common turn-offs for bidders

3. Background • PPP is an international market • Advisers • Funders • Contractors • Local sub-contractors

4. Issues • Great source of experience but beware of differences in practice & standards • Approach to dialogue • Due diligence • Contractual structures • Bid costs

5. Issues • PQQ ‘pitfalls’ • EU procurement law • Define qualifying ‘experience’ • Check deliverability of consortium structure • Financial standing - Reconcile across different reporting standards • Currency risk • References • Clarify the advisers to the consortium

6. Issues • Cultural differences between public and private sector parties • Degree of delegated powers • Length / process of decision making • Relationship between public authorities • Unitary vs. separation of functions • Relationship between public & private entities

7. Contract • Contract should be tight rather than ambiguous • Authority must be clear that contractor proposals fully meet its requirements • For the avoidance of doubt all project specific protocols should be agreed and annexed to the project agreement • Monitoring rights and requirements • Timetable should allow for adequate set-up

8. Importance of market sounding 1 • Market development • Formal & informal tests Competition drives VfM!

9. Importance of market sounding 2 • Allows project to test the market on proposed • Scope • Risk allocation • Contractual structure • Procurement timetable • Procurement strategy

10. How to organise the bid selection process 1 • Study the market; consider depth & bidder capacity • Actively engage the market through soundings and bidders days • Invest in the Project Prospectus and Information Memorandum

11. How to organise the bid selection process 2 • Be clear on risk allocation • Present a detailed and realistic procurement strategy • Include details of requirements (information & time) for formal authority approvals throughout the process

12. How to organise the bid selection process 2 • Be clear on risk allocation • Present a detailed and realistic procurement strategy • Include details of requirements (information & time) for formal authority approvals throughout the process

13. How to organise the bid selection process 3 • Demonstrate commitment and readiness • Consultations / consents • Site surveys • Outline planning permits • Reference designs • Project resourcing • Affordability

14. How to organise the bid selection process 4 • Specification should clearly reference applicable technical standards • If information required in particular format provide templates • Different standards of due diligence – be specific about requirements • Be flexible facilitate bidder access • Dialogue - not monologue!

15. Common turn-offs for bidders: • Lack of clarity over scope and requirements • Unrealistic affordability position • Lack of public sector resourcing • Lack of senior and/or stakeholder support • Poor timing

16. Summary • Be aware of different practices and facilitate participation through early engagement • Define and test your market, identify key drivers and reflect in the structuring of your procurement • Use commercial advisers’ international knowledge base to your benefit • Only go to procurement when the project is ready and the necessary resources are in place

17. Questions? Mikko AJ Ramstedt mikko.ramstedt@scotland.gsi.gov.uk 0131 244 4940