On 13 February 2014, the Victorian government released new guidelines dealing with unsolicited proposals to build infrastructure and/or provide services (“Guidelines”).

The Victorian Government has introduced the Guidelines to provide a framework to assess and develop proposals received from the private sector. The Guidelines primarily deal with unsolicited private sector proposals but also apply to direct approaches by Government to a private sector party.

In considering unsolicited proposals the Government’s objectives are to:

  • promote the development of innovative ideas;
  • ensure an open, transparent and fair process;
  • incorporate open competition, where appropriate;
  • ensure value for money is achieved;
  • ensure the benefits are measurable and can be maximised; and
  • ensure private sector intellectual property is respected and the private sector is fairly compensated.

A five stage process will guide the assessment of unsolicited proposals:

Stage one: Receipt of an unsolicited proposal

Stage one sets out the minimum information requirements for a proposal to be considered.

All proposals are first submitted to the Deputy Secretary (Commercial), Department of Treasury and Finance. Where a proposal meets the minimum requirements, the Government will respond within 30 days about how the proposal will be evaluated, the protection of confidential information and any additional information requirements.

Stage two: Preliminary assessment

Stage two evaluates whether the proposal should proceed for further development. At the end of this evaluation, the relevant working group can recommend that the proposal should not proceed, or should proceed for further development, through either exclusive negotiation with the private party or a competitive process.

Stage three: Developing the proposal in exclusive negotiations

A private party proceeds to stage three when it is invited by the Government to enter into a formal negotiation period to develop a full proposal for Government consideration. At the end of this process, the Government may choose to not proceed with the process, negotiate a final offer with the private party or contemplate another approach which may still include a competitive process.

Stage four: Negotiating and finalising a binding offer

Stage four is where the final binding offer is presented to the Government for approval. The Government determines whether the final offer is acceptable and represents value for money. If a final outcome cannot be successfully negotiated, the proposal does not proceed.

Stage five: Award contract

The Government and the private party enter into a binding contractual arrangement to deliver the proposed infrastructure or service. A project summary is released by the Government within 90 days of the contractual or financial close which summarises the proposal.

The Guidelines are similar to the three stage process set out in New South Wales’ Unsolicited Proposals Guideline (August 2012). Importantly, both guidelines specify that confidential information and intellectual property will be recognised and managed early in the process. In addition, both New South Wales and Victoria also apply their guidelines where the Government directly approaches a private party to deliver a significant project or service.

A copy of the Guidelines can be found here.