Unsolicited proposals: NSW on the right track a decade after AWH

By Harley Dennett

Thursday March 10, 2016

Unsolicited proposals are generally encouraged by governments as a means to innovative infrastructure or service delivery solutions with private sector partners who are uniquely positioned to provide value for money. But as evident in Kerry Schott’s experience with Australian Water Holdings nearly 10 years ago, they can be a magnet for corruption and accompanied by unscrupulous lobbying.

Since those darker times, the New South Wales Department of Premier and Cabinet has developed a new process for unsolicited proposals and launched a guide for submission and assessment that includes checks and balances that are now acknowledged as necessary.

“Unsolicited proposals warrant more disclosure as they pose a greater risk … ”

This week the NSW Audit Office gave a tick of approval to DPC’s co-ordination and governance arrangements — but suggested more transparency, both about the outcomes and reasoning of decisions, and the purpose of DPC’s oversight role. Acting auditor-general Tony Whitfield said enhanced public reporting could encourage greater public confidence that government processes that lead to direct negotiation are robust and only applied in appropriate circumstances.

“Unsolicited proposals warrant more disclosure as they pose a greater risk to value for money than procurements done through open, competitive and transparent processes,” Whitfield said. “This could include aggregate information about why proposals are declined, as well as more extensive information about proposals that have progressed beyond the preliminary and strategic assessment stages.”

Additionally, mechanisms separate the people who assess proposals and those who make recommendations to Cabinet. Whitfield says this separation is a key mechanism to protect impartiality in decision-making. He was also confident in DPC’s processes that ensure potential conflicts of interest are managed appropriately and transparently.

NSW's unsolicited proposal submission process
NSW’s unsolicited proposal submission process

Unsolicited proposals are relatively rare and successful adoption is even rarer. NSW has received 117 proposals since DPC’s new guide was launched in 2012. Of them, three successfully completed the process with a total value of over $5 billion, including the NorthConnex motorway and the more controversial Crown Sydney Resort project at Barangaroo.

Despite the low completion rate, senior executives from agencies that tend to be recipients have told The Mandarin the pathway remains a valuable source of new options for government.

DPC secretary Blair Comley wrote in response that he was pleased with the auditor’s findings and would work to implement greater clarity and transparency in the framework.

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