As governments look for proactive ways to push the development of infrastructure, it seems that businesses may have the best answers, writes Glenn Keys, as they are forced to be innovative and adaptable in order to survive.
Governments around the country and the world are looking for innovative ways to drive infrastructure development and service delivery with the goal of cost-effective, quality outcomes that generate the highest return for the community.
Often the best ideas come from the private sector, where businesses’ very survival depends on them being adaptable, inventive and up to date with the latest technology.
In most jurisdictions in Australia, a private company is able to approach government with a concept it believes will provide substantial benefits to the local economy through a process known as “unsolicited proposals”.
Unsolicited proposals can be poorly understood and are often subject to criticism. As an unsolicited proposal, at least in the first instance, consists of a single provider in discussion with government regarding a project, it can be decried as a backroom deal.
In fact, this is far from the reality of an unsolicited proposal, which is a legitimate and strategic procurement process utilised by forward-thinking governments.
Governments which have implemented unsolicited proposal policies, such as the ACT government, are pragmatically accepting the truth that governments do not have all the answers.
The ACT’s own guidelines for unsolicited proposals state: “By having a process to manage unsolicited proposals, the government can ensure that value to the community can be delivered from genuinely unique ideas.
“Where a mutually beneficial outcome between a proponent, ACT government and the territory can be demonstrated, the ACT government intends that successful bidders receive a fair return for their efforts, particularly for genuinely unique ideas.”
What this means for me as a business owner is that if my company can offer something specific to benefit the people of Canberra, our proposal will be valued and not automatically create an opportunity for others to step in and profit from our intellectual property.
It is this comfort that will ensure the private sector does not avoid sharing ideas with government in the future.
By the same token, the unsolicited proposals process in place in the ACT gives the community a guarantee that a company cannot in any way pressure government in order to obtain a commercial advantage. The rules are spelled out and above board.
There are a number of unsolicited proposals underway in Canberra at the moment garnering attention. These are the redevelopment of the Casino Canberra site and Manuka Green proposals.
Calls for transparency and consultation are understandable, but we have to be careful not to confuse concerns about an individual project with opposition for Unsolicited Proposals.
It seems from the outside, people are worried the process these two proposals are going through means the companies involved will be able to do whatever they want without any consideration of factors such as existing neighbourhood amenity.
Every unsolicited proposal made by the private sector is not eagerly and warmly embraced by government. For example, in NSW in recent years 17 unsolicited bids have been submitted and only five approved. It must be noted that the five bids accepted are believed to have brought around $5 billion to the state economy.
In the ACT, the government retains the right to reject proposals that are not consistent with tests for public interest, appropriate risk allocation, and/or value for money.
When considering a proposal and whether it is in the public interest, the proponent may be required to conduct public consultation and the findings of the consultation will be taken into account.
In addition, if the government accepts a proposal, it has a “Six Ways” Framework that means the project will be awarded through an agreed commercial tender model. Of the Six Ways, only one gives the proponent an exclusive right to negotiate directly with government. You can read more about the unsolicited proposals process and the Six Ways framework here.
Under this framework, proponents are required to identify a preferred commercial tender model from the Six Ways and outline their reasoning for the selection. The ACT government will take the proponent’s preferred selection into consideration but reserves the right to select a final procurement process that it considers, in its view, to be in the overall best interests of the Territory.
Business has the capacity and know how to help us build and grow as a city, community and economy.
We have to be careful that vocal opposition to individual projects is not based on a lack of knowledge about the unsolicited proposal process and does not discourage companies from stepping up or lead to the government dismantling this system.
The ACT government has implemented a robust approach to assessing unsolicited proposals. We need to trust in this process and understand it is actually designed to consider the needs of us all, rather than to reward an individual business or consortium. Knee-jerk condemnation of projects before they have gone through the process puts at risk our ability to foster great ideas in the future.
Keep up with Commercial Real Estate news.
Keep up with Commercial Real Estate news.