1. 27 October 2011 Competitive dialogue in UK PFI PPP Forum Perspective Andrew Briggs, Partner

2. www.hoganlovells.com Scene setting PPP Forum concerns –Inefficiencies in way in which CD is applied to PFI projects –Lead to protracted timetables increased bid costs wasted resources overall adverse impact on competitiveness of UK PFI market To what extent are these inefficiencies created by legal requirements of the CD process or by those that operate them? 2

3. www.hoganlovells.com Availability of CD procedure Is CD always available for PFI projects? –Should open/restricted procedure be used for commoditised PFI? –Is the negotiated procedure ever available? CD vs. Open or restricted procedures –CD not automatic – justification needed –CD not a tool for 'free consultancy' CD vs. Negotiated procedure –Official guidance: negotiated procedure in truly exceptional cases –When is 'prior overall pricing' not possible? –When can contract specifications not be established? –Are there any practical differences between CD and a well managed negotiated procedure in any event? 3

4. www.hoganlovells.com Extent of dialogue Is there an obligation to discuss all requirements during CD? –Discretion vs. obligation –Bidder initiated discussions Is there an obligation to formalise and diarise a series of equal meetings with all bidders? –Flexible approach and equal treatment Can the MEAT criteria and their weightings vary during the course of CD? –Alteration of weightings at each stage of CD –Alteration of the criteria themselves at each stage of CD 4

5. www.hoganlovells.com Maturity at close of dialogue What level of bid maturity is required at the end of the dialogue phase? –Are a mature project agreement and well developed heads of terms sufficient? –Case of complex technical solution and legal / financial arrangements –Parent company support documentation –Interface agreements –Funding documents 5

6. www.hoganlovells.com Close of dialogue to financial close Are changes that: –are technical or administrative in nature –would have applied to all bids in the same manner –are not so material that the CA remains confident that the preferred bidder solution remains the MEAT permissible? Meaning of "clarify, specify or fine tune", "clarify aspects", "confirm commitments" without "distorting competition or causing discrimination" Funding competitions 6

7. www.hoganlovells.com How do other countries achieve this? Ireland Canada US 7

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