The Queensland Government recently released new market-led proposal guidelines. The guidelines are a positive step forward and provide the private sector greater guidance for submitting market-led infrastructure, development and other proposals to Government.
The guidelines are the result of the Government’s review of the Value for Money Framework implemented in 2001. As part of the review, the previous guidelines on exclusive mandates, which focused on maximising competition, were replaced with the new market-led proposal guidelines.
Market-led proposals – an opportunity for innovative public private partnerships
The new guidelines encourage the private sector to approach Government with innovative and unique project proposals.
The Government’s procurement process for major projects is usually based on a Government initiated competitive tender process. However, the guidelines provide an alternative which allows the private sector to initiate and submit to Government an unsolicited or market-led proposal which has not been specifically requested by Government.
If the proposal represents value for money, does not expose Government to material risk, is unique in achieving a government priority and satisfies the other assessment criteria, Government may accept the proposal.
If accepted, the proponent may be granted an exclusive right (known as an exclusive mandate) to negotiate with Government and deliver the project.
What areas can a market-led proposal cover?
A market-led proposal may cover a wide range of areas including:
- delivery of services to or on behalf of the government;
- provision of infrastructure;
- access to government assets – including government land;
- access to government information; and
- otherwise seeking government support to undertake a specific commercial activity.
Market-led infrastructure and real estate projects
The new guidelines are similar to the unsolicited or market-led proposal regimes in New South Wales and Victoria – both of which have been updated in the last two years. In those jurisdictions, market-led proposals have been submitted for various infrastructure and real estate development projects including:
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In Queensland, for a real estate or infrastructure project, the proponent must demonstrate why their proposal is unique in its ability to achieve a Government priority outcome, is unable to be replicated by a competitor and justifies a different process to a traditional competitive market tender process.
For example, if the proponent owns strategic land that limits competitors’ ability to deliver the project (eg land adjacent to Government land which would be developed with the Government land for the project) and/or has unique expertise to deliver the project (eg a railway manager or port operator who owns land which could be developed in conjunction with Government land to deliver a terminal or port facility or a consortium with unique collective expertise to deliver a project using government land).
THE ASSESSMENT PROCESS – THREE AND A HALF STAGES
The process for progressing a market-led proposal through to a final binding contract is:
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*This stage is optional but strongly recommended.
WHAT CRITERIA DOES GOVERNMENT CONSIDER?
When assessing a market-led proposal, Government may consider, among other criteria:
- community need and government priority;
- value for money;
- uniqueness and intellectual property;
- benefit of proponent’s preliminary investment;
- risk and cost allocation;
- capacity and capability of proponent;
- public interest and benefits to government; and
- competing proposals.
WHO WILL ASSESS A PROPOSAL?
The Market-led Proposal Panel and an assessment team will provide Government recommendations about each market-led proposal at the end of Stages 1 and 2.
The Panel will comprise senior members from Queensland Treasury, the Department of Premier and Cabinet, the Department of Infrastructure, Local Government and Planning, the Department of State Development and members from other agencies depending on the subject matter of the proposal. If the proposals relate to infrastructure, the panel will consult Building Queensland.