Highways Agency

• 1 introduction
• 2 the project
• 3 legal, contractual and commercial matters
• 4 timetable and selection process
• 5 prequalification questionnaire : introduction and guidance
• 6 submissions and enquiries

4 timetable and selection process

4 TIMETABLE AND SELECTION PROCESS

Indicative dates in the Project programme

4.1 Submissions for prequalification must be received by midday on 12 January 2006. TheAgency reserves the right to reject any submissions received after this time.

4.2 The selection process is outlined below. Indicative dates for the Project are:

The Agency reserves the right to modify this programme.

Selection process

4.3 The selection process that the Agency proposes to use for the Project is as follows:

Prequalification

• Candidates submit a completed prequalification questionnaire in the form set out in Annex D.
• The Agency evaluates PQQs and selects Candidates on the basis of the factors set out in Regulations 14, 15, 16 and 17 of the Regulations (i.e., eligibility criteria, economic and financial standing and technical capacity) (the prequalification criteria). The prequalification criteria and evaluation process are described in more detail in Section 5 below.
• All respondents who meet the Agency's requirements (as described in Section 5) go through to the next stage.

ISOP

• The Agency issues an Invitation to Submit Outline Proposals to all Candidates who have met the Agency's requirements in respect of the prequalification criteria (Prequalified Candidates). The ISOP questionnaire will be accompanied by a document containing relevant background information about the Project.
• Prequalified Candidates respond to the ISOP questionnaire. The responses will be treated as firm commitments to be taken forward into the Final IGT stage.
• The Agency evaluates the responses to the ISOP questionnaire against the following high level criteria:
  1. delivery of the required service to the required standard;
  2. robust processes;
  3. supportive values and behaviours;
  4. appropriate resources (human, financial and technical);
  5. robust pricing methodology.
• The Agency shortlists three bidders (Tenderers).

Final IGT

• The Agency issues full Tender Documents to the three Tenderers, including complete contract documentation, illustrative designs for all the widening works and complete or draft environmental statements.
• Tenderers submit comments on the form of DBFO Contract during the tender period.
• The Agency negotiates comments with Tenderers and issues a revised contract during the tender period.
• Tenderers submit fully developed tenders, including technical proposals and (except as discussed in paragraphs 4.11 to 4.14 below) provisional pricing for the entire project, and are expected to accept the revised contract without further negotiation.
• The Agency evaluates tenders on the basis of the most economically advantageous tender using the following criteria (the selection criteria) (but using only the provisional pricing):
  1. delivery of the required service to the required standard;
  2. robust processes;
  3. supportive values and behaviours;
  4. appropriate resources (human, financial and technical);
  5. appropriate price for the service.
• The Agency clarifies tenders with Tenderers if necessary.
• The Agency selects the provisional preferred bidder (PPB) on the basis of the selection criteria.

Post tender

• The Agency and the PPB finalise the DBFO Contract.
• The Agency possibly awards the DBFO Contract, with provisional price.
• The PPB runs a funding competition.
• Pricing is adjusted to reflect (only) the outcome of the funding competition.
• The DBFO Contract is signed (if it has not been signed before the funding competition).

Post Contract

• If not fixed before contract signature, the price for the later sections of widening is fixed by application of an agreed pricing methodology, for example by the DBFO Co competitively procuring the works or through a target pricing arrangement (see paragraphs 3.5 to 3.8 above).

4.4 The Agency reserves the right to change any aspect of the selection process outlined above.

Principal changes

4.5 The principal changes in the selection process compared to the process used by the Agencyon previous DBFO projects are discussed in paragraphs 4.6 to 4.14 below.

Two stage bidder selection process

4.6 The process for the selection of Tenderers for the M25 DBFO Project is a two stage process,under which all Candidates who meet the Agency's requirements at the prequalification stagewill go through to the ISOP stage. The ISOP will be used to reduce the number of bidders onthe basis of a quality assessment.

Number of bidders

4.7 Three Tenderers (rather than four as in previous DBFO road projects) will submit full tenders.

No Best and Final Offer

4.8 On all of the Agency's DBFO projects to date, the process has included a Best and Final Offerstage (BAFO). Under this process, after the Agency has received and evaluated tenders, ithas generally shortlisted two bidders for further negotiation. Following those negotiations, theshortlisted bidders were asked to confirm their bids in a best and final offer, and the Agencyhas selected the provisional preferred bidder on the basis of these BAFOs.

4.9 The Agency believes that the tender process can be shortened by eliminating this stage,without detriment to the robustness of the tender process. This is particularly the case given itsintention to negotiate with all bidders during the tender stage. In order to omit the BAFO stage,the Agency will need to satisfy itself that the provisional preferred bidder's proposal isdeliverable.

Negotiation of DBFO Contract during tender period

4.10 The DBFO Contract will be negotiated during the tender period. Tenderers will submitcomments on the draft DBFO Contract (including any comments funders are likely to make).The Agency will negotiate those comments with each Tenderer during the tender period. TheAgency will issue either a single revised contract reflecting the comments of all Tenderers orseparate contracts negotiated with each Tenderer.

Funding competition

4.11 In past Agency DBFO procurements, bidders have been required to provide with their tendersdocumentary evidence of commitments from financial institutions. However, given themagnitude of the funding required for the M25, the Agency believes that it would be moreappropriate for a funding competition to be held once the provisional preferred bidder hasbeen selected. This will avoid the potential strain on the financial market of providingcommitments for such large amounts for multiple bidders.

4.12 It is therefore proposed that a funding competition be held. This will either be run by theprovisional preferred bidder or possibly by the DBFO Co after contract signature but before theCommencement Date.

4.13 As part of their tenders, Tenderers will be required to:

• submit a funding plan;
• deliver evidence of the achievability and realism of the funding plan; and
• commit to those equity elements of the funding plan that will come from the Tenderer or Member Organisations.

4.14 The purpose of the funding competition will be to compete the senior debt elements to thefunding plan to obtain best terms for that debt.

Availability of information

4.15 Further details of the Project will be set out in the ISOP and the Tender Documents. Thesedetails will be supplemented by information deposited in an electronic data room.

Contract award

4.16 The basis for the award of the DBFO Contract will be the most economically advantageoustender. The high level criteria to be applied are those set out in paragraph 4.3 above. Thecriteria will be set out in more detail in the ISOP and Tender Documents.