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Procurement Process

A competitive process is widely considered the best practice method of procuring PPP contracts. Key advantages are transparency and use of competition to choose the best (best blend of quality and price) proposal.

Any PPP procurement requires a set of procurement guidelines or strategy. This is usually defined by the PPP implementing agency (such as a PPP Unit) following the process of developing PPP laws and regulations or it is defined in the countries’ procurement laws themselves.

 The guidelines should define the following key aspects of the procurement process:

  • Pre-qualification: whether to use a pre-qualification process to select the firms or consortia that will participate in the bidding process
  • Bid process: whether to use a single-stage process to select the preferred bidder, or a multi-stage process, in which proposals and the bidding documents may be reviewed and iterated
  • Negotiation with bidders: to what extent discussions with bidders may lead to changes in the initial draft contract, either during the bidding process (with multiple bidders), or after final bids have been submitted
  • Basis for award: whether to rank proposals and choose the preferred bidder based on a single financial or value-related criterion (after screening for technical merit), or some weighted evaluation of financial and technical criteria

Following these guidelines, the tender process is usually defined by the following four steps:

Step 1: Marketing the upcoming PPP project, to interest prospective bidders (as well as potential lenders and sub-contractors)

Step 2: Identifying qualified bidders through a qualification process

Step 3: Managing the bid process, including preparing and issuing a request for proposal, interacting with bidders as they prepare proposals, and evaluating bids received to select a preferred bidder

Step 4: Ensuring all conditions are met to reach contract effectiveness and financial close.

Learn More

    • 2014
    • Asian Development Bank (ADB), World Bank Group (WBG), Inter-American Development Bank (IDB), PPIAF

    PPP Procurement

    PPP Reference Guide Version 2.0

    Section 3.5 describes the procurement process for PPPs including choosing a procurement strategy, qualifying bidders, and the bid process. A competitive selection process is typically recommended to procure PPP contracts. Key advantages are transparency, and use of competition to choose the best proposal—the mechanism most likely to result in value for money.  The PPP Reference Guide presents a global overview of the diversity of approaches and experiences in the implementation of PPPs, providing an entry point to the substantial body of knowledge on PPPs that has been built up by practitioners in governments, the private sector, international institutions, and academics. It seeks to provide advice on what PPP practitioners should...

    • 2014
    • European Investment Bank (EIB)

    The EPEC PPP Guide

    The European PPP Expertise Centre (EPEC) has published several versions of its Guide to Guidance over the last few years. The Guide to Guidance is principally aimed at public procuring authorities considering the use of public-private partnership (PPP) arrangements. Given the positive feedback it has received, EPEC decided to turn the Guide to Guidance into a webtool rebranded as the EPEC PPP Guide. The aim of the EPEC PPP Guide is to give users easy access to regularly updated PPP guidance and allow them to interact with the EPEC team (e.g. propose new guidance, rate the EPEC PPP Guide).  

    • 2010
    • Edward Farquharson, Clemencia Torres de Mästle, E.R. Yescombe, and Javier Encinas
    • PPIAF

    How to Engage with the Private Sector in Public-Private Partnerships in Emerging Markets

    This guide reviews the necessary steps to successfully engage and manage a public-private partnership (PPP) from the early stages. It presents a framework that highlights the requirements, options, and challenges that governments face when embarking into PPPs, and explains how to address them so that a sound PPP program can be implemented and the benefits for both public and private partners can fully materialize. This book draws on experiences from both mature and developing PPP markets across the world, and case studies illustrate the key messages throughout. It discusses the policies, processes, and institutions needed to select the right projects and then manage preparation for market and operation. It identifies the underlying...

    • 1998
    • Michel Kerf, R. David Gray, Timothy Irwin, Céline Levesque, and Robert R. Taylor
    • World Bank Group (WBG)

    Concessions for Infrastructure

    A guide to their design and award

    This report aims at helping policymakers and advisers better understand some of the most important and difficult aspects of concession design, award, implementation, monitoring, and modification. Concession is broadly defined as any arrangement in which a company receives from the government the right to offer a service under conditions of significant market power.

    • 2004
    • Government of South Africa
    • Government of South Africa

    Public-Private Partnership Manual, South Africa

    Preface and Table of Contents

    South Africa is amongst the leading countries in the world in the law, policy and systems it has established for public private partnerships. The South African National Treasury’s PPP Manual is a best practice guide for PPP practitioners. Each module of the PPP Manual is issued as a National Treasury PPP Practice Note in terms of the Public Finance Management Act, 1999 (PFMA). It should be read with Standardised PPP Provisions, issued as National Treasury PPP Practice Note Number 01 of 2004.  

    • 2009
    • PPIAF
    • PPIAF

    Toolkit for Public-Private Partnerships in Roads and Highways

    The Toolkit is a reference guide for public authorities in developing countries for the development of PPP (public-private partnership) programs in the highways sector, particularly in assisting in PPP policy development, project preparation and the sourcing and monitoring of external expertise. It provides guidance in the definition of strategy and policy for PPP, the characteristics of PPP projects and the stages for their preparation. Module 4, "Laws & Contracts" https://ppiaf.org/sites/ppiaf.org/files/documents/toolkits/highwaystoolkit/4/index.html examines the legal framework and regulatory environment for PPPs.  It provides a framework for diagnosis and reform and provides the basis for preparation of PPP contracts. Module 5,...

    • 2014
    • Asian Development Bank (ADB), World Bank Group (WBG), Inter-American Development Bank (IDB), PPIAF

    Procuracion

    Asociaciones Publico-Privadas: Guia de Referencia Version 2.0

For legal and regulatory resources go to PPPIRC

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