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Wednesday, April 24, 2013

How to make an RFP (Request for Proposal) for a Public Private Partnership (PPP) project bid.

Components of RFP for PPP
Now that PPPs are in vogue, let's make that RFP. 
While our consultants were working on a government assignment, creating a detailed request for proposal (RFP) document to find a suitable private partner was part of our scope of work.

The people at Pillars who knew this stuff were all held up in a room by us, given warm samosas and chai and were asked to create the wire frame of an RFP document. Free!

If you were to create a Request for Proposal for a PPP bid or tender process, this framework should be helpful to build a comprehensive document. This is dependable information for which, we charge you nothing.

Components of the Request for Proposal.

1. Datasheet

This data sheet is to contain the tender details like who is inviting the tender, addresses, tender brief and critical dates like tender document availability, place of procurement, contents of the bid, earnest money if any and final date of submission and pre- bid meetings etc.
Tip: Do not get intimidated by all the jargon you see in another RFP. Keep it simple. Remember when the guy who is bidding reads it, he should feel nice and easy. The competition should unnerve him, not the document.

2. Instructions to the bidders

a. GENERAL- Include the basic general instructions and policies here.

b. NUMBER OF APPLICATIONS- Are you allowing a single application per bidder? Or more than one application? Mention that clearly.

c. PROPOSAL VALIDITY- How long is the bid/ process valid for. Mention dates and times neatly.

d. PRE-BID QUERIES- Bidders WILL have queries regarding the bid. How are you planning to address those queries in a transparent and open way. How do you plan to resolve them? A centralised email and a postal address, complete with how to send the queries and the last date for the same should be mentioned here.

e. AMENDMENT OF RFP- Nobody gets such a complex thing correct at one go. Not even the biggest names in the consulting industry. So feel free to incorporate this. If all your bidders think that something must change, then change it. Or you will have no one qualifying. And this ain't no IIT entrance test. Keep yourself open to a certain extent. Consult the organisation you are working for. Ask them about their comforts on this and make a statement here.

f. ELIGIBILITY OF ASSOCIATION OF FIRMS AND SUB-FIRMS OF THE DEVELOPERS- All the things that you desire from your new PPP association should be mentioned here. Highlight points that could cause a disqualification for a bidder. Consult your client in depth and note down everything. Once this RFP is out in the public you would not want someone pointing out that you missed something!

g. CONFIDENTIALITY

h. LITIGATION HISTORY- Does the bidder have a litigation history or a legal issue in the past? Such things are normal and you must clearly ask your bidder to tell you about such things if any. Remember that a PPP is a long term affair and all parties should be aware of each others' good and bad! That is the best way to build great real estate!

h. CONFLICT OF INTEREST- Add a note on what would be considered a conflict of interest and the possible action for the same.

i. FRAUD AND CORRUPT PRACTICES- Add a note on this as well. Spell out consequences. 

3. Terms of reference

a. BACKGROUND – This is to have the background of the assignment. About the city, your client organisation and the vision of the organisation for this particular project.

b. OBJECTIVE OF THE ASSIGNMENT- A neat, simple and preferable jargon free note on what you really want to achieve and how a private partner would add value to the project. Don't worry if it does not sound business like and important. That is not necessary. It must convey everything you want to achieve.

c. SCOPE OF WORK OF THE SELECTED PPP PRIVATE PARTNER- You would know this. Keep it detailed. And simple. Use bullet points of needed.

d. TEAM STRUCTURE OF THE BIDDER FIRM- What you are looking for when it comes to your private partner's manpower. Who works there? What have the team members individually achieved?

e. TIME PERIOD OF THE PPP ASSOCIATION

f. ELIGIBILITY CRITERIA- Years of experience, projects handled, projects delivered, specific real estate asset classes covered, financial turn overs, team etc should come here. Try using crisp one liners if that suffices. No one wants to read stories.

g. KEY DELIVERABLES- Almost like the Scope of Work above but the critical delivery points of the private partner should figure here. Even the intangible ones. The spirit of the contract is this.

h. JOINT VENTURE COMPANY FORMATION AND OTHER FINANCIAL AND LEGAL TERMS AS SET BY THE PUBLIC COMPANY- Mention them here.

i. SUPPORT AND INPUTS TO THE FIRM- What you seek from your private partner and a note on what you can offer in return.

4. Submission and Evaluation of the Proposal

a. SUBMISSION OF THE BID- The how to, whom to and other stuff comes here.

b. CONTENT OF THE PROPOSAL- What all should make the proposal complete from the bidders. List of annexures, exhibits, proof documents, certifications, forms and formats. (Sample Forms and Formats need to be created by you and included in this RFP Document. This shall come in the next section.)

c. EVALUATION METHODS- How you plan to evaluate the various proposals from your bidders. We suggest you make a clear marking system based on the contents of the proposal. For example you could have i. Firm's experience at building affordable housing- Total 10 marks - Over 5 lacs Sq ft - 5 marks. Over 10 lacs Sq ft - 8 marks and Over 15 lacs Sq ft - 10 marks. Keep it so crisp and simple that there is no room for ambiguity and question marks once you actually do the evaluation. Get it? Put the effort into the planning and the evaluation will become easy, transparent and ethical.

d. LAST DATE OF SUBMISSION OF THE PROPOSAL- There can only be one. Keep the emotional stuff to the minimum here. ;)

e. DATE OF BID OPENING- Ditto point 'd' above.

f. AWARD OF CONTRACT- A note on when and how you wish to award the contract. Would you have final negotiations before you sign up your new partner? Mention it. Keep back nothing.

5. Forms and Formats that should be used by bidders to submit the proposal

Use the word processor and the spreadsheet program in your computer and burn some midnight oil. Remember if you are floating this RFP, you would also have to evaluate the proposals that come in. It works best to have all those proposals reach you in a format you understand. The best route to that understanding is creating the formats yourself. You should create these formats and include them in the RPF.

Formats for Technical Proposal/ Bid

FORMAT - I: TECHNICAL PROPOSAL COVERING LETTER

FORMAT – II: PROFILE OF THE FIRM

FORMAT – III: FIRM’S RELEVANT EXPERIENCES

FORMAT - IV: FORMAT FOR SUBMISSION OF CVs OF THE DEVELOPER’S (CORE) TEAM

FORMAT – V: APPROACH & METHODOLOGY

FORM TECH - VI: FIRM'S TURNOVER

Formats for Financial Proposal/ Bid

FORMAT - I - FINANCIAL PROPOSAL COVERING LETTER AND THE PROPOSAL- Keep this information absolutely constant. Are you looking for an amount? A percentage? A revenue share? Leave no room for the bidders to interpret this.

FORMAT - II – FINANCIAL METHODS AND JOINT VENTURE CREATION (IF NEEDED)

FORMAT - III – REVENUE SHARING MANAGEMENT CONTROL SYSTEMS AND OTHERS (IF NEEDED)

There, once you have those points all filled out and written, choose a nice font, a legible font size, number and label all the points clearly and you have a cool RFP document for a PPP real estate project tender or bid.

Need suPPPort or assistance of some kind? We would be glad to offer our services. Write to Pillars Support and we will get back to you pronto.
- Cheers!

About the author
Rahul Mishra is a real estate professional who started his life as a salesman, selling homes in the city of Kolkata since 2001. He worked pan India in real estate organisations like MMG Realty, Bengal Shrachi, The Phoenix Mills and The Space Group before helping co found Pillars with a single objective - To make real estate easy!

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