how to attract bidders
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Bremner Management Services Limited. How To Attract Bidders. Presented By Sandy Bremner 24 th March 2005. TODAY’S PRESENTATION. Sandy Bremner’s background and experience The PPP market The private sector’s perception Who are the bidders and what do they want? How to attract bidders. - PowerPoint PPT PresentationTRANSCRIPT
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How To Attract Bidders
Presented By
Sandy Bremner
24th March 2005
Bremner Management Services Limited
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TODAY’S PRESENTATION
Sandy Bremner’s background and experience
The PPP market
The private sector’s perception
Who are the bidders and what do they want?
How to attract bidders
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COMPETING MARKETS IN THE UK
England, Northern Ireland and Wales– Courts– Defence– Education– Health
• PFI
• LIFT
– Housing– Prisons– Roads– Waste
Scotland– Education– Health– Prisons– Roads– Waste
Signed Projects (586) - £40,161 million Signed Projects (85) - £2,441 million
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SCOTTISH SCHOOLS PORTFOLIO
School PPP Projects By Value
24%
54%
8%
14%
Done Deals Being Negotiated Advertised Potential
Capital Value - £2,872 million
The Market
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SCOTTISH SCHOOLS’ MARKET
• Comhairle nan Eilean Siar Schools• Falkirk Schools PPP2• Scottish Borders Schools• Inverclyde Schools• Moray Schools (A)• Aberdeen City Schools (A)• East Dunbartonshire Schools (A)• West Dunbartonshire Schools
• £48 m• £70 m• £50 m• £80 m• £50 m• £80 m• £100 m• £100 m
• £578 m
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PRIVATE SECTOR’S PERCEPTION
• Confusion• Disappointment • False promises• Lack of urgency• Lack of confidence• Poor and inaccurate communication• Poor business practice
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PROCUREMENT TIMINGS
WEEKS SAMPLE SIZE
AVERAGE MAXIMUM MINIMUM
OJEC to ITN 12 25 39 14
ITN to Preferred Bidder
12 34 65 13
Preferred Bidder to Financial Close
12 39 61 21
OJEC to Financial Close
12 97 122 70
ITN to Financial Close
12 73 102 52
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PPP MARKET PARTICIPANTS
• Project Sponsors– Construction companies– Facilities managers– Advisory consortia
• Equity Funds
• Funders
• Advisors
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THE PRIVATE SECTOR DRIVERS
• Budgets bettered.
• Certainty.
• Planned financial returns achieved or bettered.
• Quality repeat business.
• Reputation enhanced.
• Risks mitigated and managed.
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RISK MANAGEMENT
HighImpact
LowImpact
LowLikelihood
HighLikelihood
Moderate RiskMinor Risk
Major RiskModerate Risk
ELIMINATE or
AVOID
ACCEPT
TRANSFER
REDUCE
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HOW TO ATTRACT BIDDERS
• Commitment
• Command
• Communication
• Confidence
• Content
• Culture
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PROJECT STRUCTURE
• Quality Components– Confidence– Location– Political Support– Right Mix– Focused Business Plan– Affordable– Process Driven
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PROJECT SCOPE
• Realistic– Do-able– Deliverable– Uncomplicated– Few issues
• Don’t be excessive• Be prepared
• Affordable– Know the benchmark
economics• Funding
• Capital cost
• Facilities Management
• Life Cycle
• Management and administration
– Know the interrelationships– Budget from top down– Demographics to be satisfied
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THE MIX
• New build
• 75 : 25 - New build / refurbish
• 50 : 50 - New build / refurbish
• 25 : 75 - New build / refurbish
• Refurbish
Attractive
Unattractive
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AUTHORITY’S PROJECT TEAM
• Dedicated team– Well led– Delegated authority– Commercialism– PFI experts– Experience
• Experienced external advisers– Procurement– Operational
• Project knowledge– Know what you want– Be realistic– Stretching to create
“Best Value”– Continually analyse the
market
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PROCUREMENT CONUNDRUM• Clearly describe the procurement process and its various
stages.• Keep it simple.• Stick to the rules.• Use published guidance.• Categorically state the evaluation methodology.• Demonstrate that you know and can manage the process
from all angles:– European– UK Government– Scottish Executive– Partnerships UK– Local Authority
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OPTIMAL PROCUREMENT PERIODS
WEEKS SAMPLE SIZE
AVERAGE MAXIMUM MINIMUM
OJEC to ITN 12 25 39 14
ITN to Preferred Bidder
12 34 65 13
Preferred Bidder to Financial Close
12 39 61 21
OJEC to Financial Close
12 97 122 70
ITN to Financial Close
12 73 102 52
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THE SOLUTION
Don’t do this
Do this
Communicate
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A VERITABLE TALE
“Never in all history have we harnessed such formidable technology. Every scientific advancement known to man has been incorporated into its design. The operational controls are sound and foolproof.”
…………….E.J. Smith (Captain of the Titanic)
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Bremner Management Services Limited
Contact Details
Sandy Bremner
T – 01383 861504
M – 07906 856035
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Financial Partnerships Unit
Local Authority Training Seminar