Highways Agency

The Procurement Process

Prequalification

A Contract Notice is published by the Agency in the Official Journal of the European communities inviting requests from interested parties ("Candidates") to prequalify with a view to later being invited to tender for a DBFO Contract in respect of the Project. The Prequalification Document provides additional information and describes the procedure ("prequalification") for selection of Candidates with whom the Agency wishes to invite to tender and enter into negotiations. It should be read in conjunction with the Public Works Contract (Negotiated Procedure) Notice published in the Official Journal.

The Agency will wish to be satisfied that each Candidate selected to tender for the Project has the appropriate qualities and resources available to it, to undertake the tasks required of the DBFO Co. Candidates are selected in accordance with the negotiated procedure and are typically required to supply information regarding the following:

• financial and economic standing;
• technical capability and approach;
• the capability to secure appropriate technical, financial and legal advice for negotiating and finalising the contract; and
• the avoidance of arrangements which could constitute a conflict of interest.

Tender

In order to initiate the tendering process, the Agency sends to Tenderers a set of tender invitation documents (the "Tender Invitation Documents"), including a draft of the DBFO Contract (the "Draft Agreement"). The Tender Invitation Documents set out the Agency's position regarding the definition of obligations and the allocation of risk. Tenderers are required to submit a tender on that basis (the "Standard Bid"). The Agency will also consider Variant Bids subject to compliance with the specified requirements (a "Variant Bid").

At tender stage a substantial amount of information is made available to the Tenderers, including any existing design information. For early DBFO Projects, this information was provided by way of dataroom document facilities, but more recently have been provided to Tenderers at the start of the tender period on CD-ROM. Tenderers are required to propose their own designs for the Project, and are encouraged to incorporate innovative ideas which deliver good value for money for the Agency.

During the tender period, Tenderers are required to agree, in principle, with the Agency any significant departures from standard, outline proposals for structures and any proposals for new or alternative standards.

In addition to their technical proposals, Tenderers are required, in their Standard Bid, to stipulate the amount of DBFO Payments which they propose on the basis of the obligations and allocation of risk as set out in cash flow projections, which include forecast cost, revenue data and financing proposals.

Tenderers are also encouraged to propose alternative obligations or allocations of risk as Variant Bids. They are requested to state the amount of DBFO Payments on the basis of such Variant Bids, with the same level of detail defined as that of the Standard Bid.

Negotiation

The Agency negotiates with Tenderers to refine and finalise the definition of obligations, the allocation of risk and the attendant payments to be included in the DBFO Contract. At the conclusion of the negotiations the Agency selects the successful Tenderer (the "DBFO Co") on the basis of the most economically advantageous tender.

Award

DBFO Contracts are awarded under the negotiated procedure applicable to Public Works Contract Regulations 1991 (SI 1991/2680) ("the Regulations") which implement the EC Works Directive (93/37/EEC).

The basis for the award of a DBFO Contract will be the most economically advantageous bid, with criteria to be considered set out in the Tender Invitation Documents. Value for money, which is achieved by minimising cost and allocating risk to the party (Public or Private Sector) best able to manage it, is a key factor in the Agency's evaluation of Tenders.