How to Manage Unsolicited Proposals
An unsolicited proposal (USP) is a proposal made by a private party to undertake a public-private partnership (PPP) project, submitted at the initiative of the private firm, rather than in response to a request from the government.
Governments may be presented with unsolicited proposals for infrastructure projects by private sector entities. How to respond to unsolicited bids so as to protect transparency in the procurement process and recognize the initiative of the proponent, is typically difficult.
A number of approaches have been developed, and examples are set out below:
The United Nation Commission on International Trade Law (UNCITRAL) has produced the useful Legislative Guide on Privately Funded Infrastructure Projects which considers these issues at paragraphs 96 to 117. It sets out suggested legislative language in provisions 20 to 23 of its text Model Legislative Provisions on Privately Financed Infrastructure Projects.
Whenever a host authority receives an unsolicited bid, UNCITRAL recommends that the authority first consider whether the proposal is potentially in the public interest. If so, the authority then requests further information from the proponent in order to make a full evaluation. If the authority decides to go ahead with the project, it determines whether the project necessarily involves intellectual property, trade secrets or other exclusive rights of the proponent. For projects that do not involve these rights, a full selection procedure is followed, with the proponent being invited to take part in the selection. If it does necessarily involve the proponent's intellectual property, a full selection procedure does not need to be followed.
New South Wales (NSW)
The Guide for Submission and Assessment of Unsolicited Proposals (2014) outlines a transparent and streamlined approach that will facilitate the NSW Government and private sector working together to develop and deliver innovative ideas. It has been developed to help those considering making a submission to confirm compatibility with the requirements of the process. Its key objective is to provide consistency and certainty to private sector participants as to how their unsolicited proposals will be assessed within a transparent framework with key drivers for the NSW Government being how the proposal helps meet a strategic Government objective and value for money.
Chile has adopted an approach whereby the project proponent is required to take part in a fully competitive tender process, but is given bonus points in relation to the evaluation. The process to manage unsoliticed proposals is found in detail (in Spanish) in a regulation (secondary legislation) to the law (reglamento) Reglamento 956 Chilean Concession Regulations 956. Click on Chile Summary for a summary of the regulations.
The South African National Roads Agency Policy - this grants the original proponent an advantage by giving it the opportunity to take part in the call for "best and final bids".
Further Reading and Resources
- Unsolicited Infrastructure Proposals - How Some Countries Introduce Competition and Transparency,
John T. Hodges Georgina Dellacha, Public-Private Infrastructure Advisory Facility (PPIAF), Working Paper No. 1, 2007, provides a discussion on how different countries manage unsolicited proposals.