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3 Aug 15
Market-led proposals - Queensland Government guidelines

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WHO SHOULD READ THIS

  • Proponents interested in submitting an unsolicited proposal to Government, and consultants assisting proponents on market-led proposals.

THINGS YOU NEED TO KNOW

  • Market-led proposals will be assessed over a three stage process. Proponents will need to demonstrate that their proposal is unique, delivers government outcomes, is unable to be replicated by a competitor and justifies a departure from the traditional competitive processes by achieving value for money.

WHAT YOU NEED TO DO

  • Before submitting a market-led proposal, contact us to assist you through this process.

The Queensland Government has released its guidelines on how it will deal with, consider, and assess unsolicited or market-led proposals.

Partner Ren Niemann and Senior Associate Ben Yeoh report on the key features of the guidelines, and how they differ from NSW and Victoria (click here for comparison table).

Background
In July 2015, the Queensland Government released its ‘Project Assessment Framework – Guidelines for the assessment of market-led proposals’ (Guidelines).   The Guidelines are the result of a review of the previous guidelines on exclusive mandates.

The Guidelines are similar to the NSW equivalent, but differ from the Victorian guidelines in a number of key areas.  A comparison of Queensland, NSW and Victorian guidelines is summarised in the table below.

The Guidelines
Market-led or unsolicited proposals will be assessed through a three stage process (see table for more detail).  The proponent must be successful in each stage in order to progress to the next stage.  Through each of the three stages, the proposal will be assessed on the following criteria:

  • community need/government priority
  • value for money
  • uniqueness and intellectual property
  • benefit of the proponent’s preliminary investment
  • risk/cost allocation
  • capacity and capability of proponent
  • feasibility
  • public interest and benefits to Government, and
  • competing proposals.

What areas can a market-led proposal cover?
A market led proposal is not limited to infrastructure projects and can cover a broad range of areas, including:

  • delivery of services to or on behalf of the Government
  • provision of infrastructure
  • access to government assets
  • access to government information
  • otherwise seeking government support to undertake a specific, and
  • commercial activity.

Key issues
While the Guidelines provide guidance around the granting of an exclusive mandate, there are number of issues that the Guidelines have not provided detailed guidance on.

Government and proponents will need to consider how the following issues will be managed:

  • Assessment criteria – there are nine assessment criteria.  The Guidelines are silent on each criterion’s relative importance to each other criterion, whether their relative importance may change from Stage to Stage or across different proposals, and whether the proposal must satisfy all criterion in each Stage. 
  • Demonstrating uniqueness – the proponent must demonstrate why the proposal is unique in its ability to deliver government priority outcomes, is unable to be replicated by a competitor, and justifies a different process to the traditional competitive process.  The Guidelines provide some examples of uniqueness:
    • the proponent owns or controls land, intellectual property or other rights that limit competitors from delivering the same outcomes
    • there are no competitors, or those currently in the market would be unable to deliver the same outcomes, and
    • a combination of unique attributes are demonstrated by the proponent to create a unique proposal and constitute an innovative departure from previous practice.
  • Protection of confidentiality and intellectual property – there is a risk to proponents that the proposal does not satisfy the assessment criteria and an exclusive mandate is not granted.  While the intellectual rights of the proponent will be protected, the concept encapsulated in the proposal itself may not. The Guidelines are clear that the Government may submit any market-led proposal to a competitive process.  Proponents will need to carefully form a view on whether its proposal is sufficiently unique to justify an exclusive mandate, such that it warrants accepting this risk.  Government should have regard to the balance to be reached between protecting the confidentiality of the concept against proceeding with a completive process, to maintain industry’s confidence in delivering innovative proposals.
  • Timings – the Guidelines are silent on timings that could be expected for consultation and assessment in each Stage.  This will need to be managed in light of Government’s competing priorities.

Final Comment
The Government is constrained in how it might meet the challenges it faces in services and infrastructure.  Market-led proposals provide a useful mechanism for the private sector to play an important role in developing strategies and projects which support the Government’s priorities but in a way that demonstrates value for money and innovation.
 

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication. 

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