The Queensland Government recently introduced a new process for entering into exclusive transactions with private-sector organisations called Exclusive Dealings. Exclusive Dealings replaced the market-led proposals (MLP) process that had been in place since July 2015.
These reforms have been anticipated since an announcement by the Minister for State Development Manufacturing Infrastructure and Planning on 30 November 2018. Two weeks after that announcement the Queensland Auditor-General released a report on the extent to which the MLP initiative was meeting its objectives of creating jobs and stimulating the economy.
What is an Exclusive Dealing?
The Exclusive Dealing process provides a pathway for commercial proposals from the private sector to seek an exclusive mandate with Government. Proposals are to include a role for government and must provide additional benefits to Government and/or the Queensland community. They must present a clear justification as to why the proposal should be considered under an exclusive arrangement, as opposed to an ordinary competitive procurement process, and demonstrate how an Exclusive Dealing:
- aligns with the Queensland Government's priorities, which should be guided by "Our Future State: Advancing Queensland's Priorities";
- justifies the government dealing exclusively with the proponent, by being in the best interests of the public;
- represents value for money; and
- will be financially feasible and the investor has the financial and technical experience and capability to deliver the proposal.
Why have these changes been made?
The Auditor-General's report found that between July 2015 and August 2018 there had been 332 MLP ideas discussed with government, of which 164 had resulted in formal submissions, but that only four of those proposals had advanced beyond Stage 1, and only two had reached contractual close. The report found that the rate of ideas and submissions that Government received from industry for MLPs had been on a declining trend since its peak in the second quarter of 2016.
While the report concluded that the MLP process was a valuable initiative for the Queensland Government to have, it made a number of recommendations to enhance the process. These suggestions included:
- providing additional information to better inform proponents about how to improve their chances of success, eg. by publishing the reasons a proposal was unsuccessful;
- improving the effectiveness and efficiency of the process by strengthening the guidelines for assessors and decision-makers and introducing quality assurances processes, eg. by setting clear target timeframes for decisions and resolving issues to ensure proposals are not delayed unnecessarily;
- consulting with local government (where relevant) earlier in the assessment process;
- establishing clear protocols for communication about proposals;
- improving the performance evaluation and reporting framework, eg. developing more outcome, effectiveness and efficiency focused performance measures; and
- thoroughly assessing the benefits and risks of applying the process to any future policy on government targeted initiatives.
The expectation is that the new Exclusive Dealings process will provide a more streamlined approach, enabling more timely assessments and reduced costs to the private sector.
New name but fundamentals remain the same
The Exclusive Dealings process is the new way for private sector organisations to seek an exclusive mandate with Government. While the process has a new name and guidelines, the fundamentals remain the same – proponents will need to be able to demonstrate a value for money proposal that includes a role for government, aligns with Government's priorities and provides a clear justification for proceeding under an exclusive arrangement.
If you would like to discuss a proposal for an Exclusive Dealing with government, or you would like to know more about the new Exclusive Dealings process, please get in touch with us.
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.