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INTRODUCTION
In the Netherlands, government is responsible for the development
and maintenance of the road infrastructure network. At national level, the
Ministry of Transport, Public Works and Water Management (hereafter,
Ministry of Transport) is responsible for the national network of
highways. The role of contractors is usually limited to consultancy
during the project-plan preparation stages (engineering, designing,
-------------------------------*Marcelle van Valkenburg, LL.M, works for the Public Private Partnership
Unit, Ministry of Transport, The Netherlands. Sander Lenferink, MSc., is a
Ph.D. Researcher, University of Groningen. Roel Nijsten, MSc., works for the
EIA/ Transportation-Centre, Rijkswaterstaat of the Ministry of Transport, The
Netherlands. Jos Arts, Ph.D., is a Professor of environmental and infrastructure
planning, University of Groningen; and also works for the Centre for Transport
& Navigation, Rijkswaterstaat of the Ministry of Transport, The Netherlands.
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DEFINING QUESTION
There are two specific ways to combine the tender procedure with
the route determination/EIA-procedure:
1. Parallelization: the tender procedure starts before the consent
decision and therefore runs parallel to the route determination/EIAprocedure. There is no exchange of information between the
procedures.
2. Interweaving: the tender procedure starts before the consent decision
and is interwoven with the route determination/EIA-procedure, the
procedures are coordinated and information is exchanged explicitly.
A 3rd way is to select first a contractor in a tender procedure and then
start the route determination/EIA-procedure. Examples of this approach
can be found in the UK, but this has not been applied in the Netherlands
for national road projects. It is therefore not a subject of this paper.
The main goals of early contractor involvement are (V&W 2005, see
also Nijsten and Arts 2007):
1. Innovation: using the conceptual freedom, innovative and creative
input of contractors (better price/quality ration by competition);
2. Project control: decision-making based on committed bids from
contractors, thus more robust information base for the consent
decision and a businesslike and transparent decision-making process;
3. Time: gaining time by parallel instead of a sequence of procedures.
After several years of gaining experience the question arises if these
goals are met by applying early contractor involvement in Dutch
infrastructure planning.
RESEARCH DESIGN
To answer that question the authors have studied four projects where
tender and route determination/EIA-procedures are carried out parallel or
by interweaving. This paper is based on the first experiences with early
contractor involvement in infrastructure planning in the Netherlands (in
line with the recommendations of FHA, 2005), and subsequently it has a
descriptive character. It is based on interviews with project managers and
document research (e.g. tender documents). The authors have also used
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PLANNING PROCEDURE
The planning procedure for the (re)construction of national roads is
laid down in the Dutch Infrastructure (Planning Procedures) Act (V&W
2006b). In this so-called route determination/EIA procedure the plan
preparation and environmental impact assessment (EIA) procedures are
fully integrated (see Figure 1).
As the first step of this procedure the Ministry of Transport draws up
a Notification of Intent, which broadly outlines the proposed road
development project. This outline includes an indication of the problem,
the project objectives, and some possible solutions (alternatives). It
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FIGURE 1
The Route Determination/ EIA-Procedure
Reconnaissance Study
Activity proposed in program: EIA required?
EIA required
Rijkswaterstaat draws up
Notification of Intent
Final Guidelines
by Ministers of Transport & Environment
Rijkswaterstaat prepares
Route Plan / EIS
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TENDER PROCEDURES
The European Public Procurement Directive (EU, 2004) is
implemented in Decree on tender regulations for award of contracts by
contracting authorities (NL, 2005). The Directive identifies different
tender procedures:
1. Open procedure (no selection);
2. Restricted procedure (with pre-selection, pre-qualification);
3. Negotiated procedure without prior publication, very strict
application thresholds;
4. Negotiated procedure with prior publication (hereafter: negotiated
procedure) e.g. applicable if the nature of the projectis such that
specifications cannot be drawn up with sufficient precision to permit
the award of the contract by means of the open- or restricted
procedure (no specifications ground);
5. Competitive dialogue (new), specifically introduced for complex
situations/projects and applicable if:
o
FIGURE 2
General Outline for the Competitive Dialogue
1. Announcement
Application
Selection
2. Dialogue I
Tender / offer
Evaluation
Dialogue II
3. Final Bid
Preliminary
Award
Elaboration / Explanation
Award of contract
(grant)
Transfer (delivery)
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FIGURE 3
Three Models of Interweaving Procedures (Models 1-3) And The
Traditional Approach Of A Process In Series (Model 4)
Track of
route determination/EIA
procedure
Track of
tender procedures
Explorative
stage
(reconnaissance
study)
Project
study
Notification
of intent
Selection
Dialogue 1
tender
Selection
Dialogue 2
Dialogue 1
tender
Dialogue 2
tender
Dialogue 1
Guidelines
Route Plan/EIS
Standpoint
Draft
Route Decision
tender
provisional award
Dialogue 3
tender
Dialogue 3
Route Decision
Realisation
Realisation Decision
(construction)
tender
Selection
tender
provisional award
Dialogue 2
tender
Dialogue 2
tender
Final award
Final award
Model 1
Model 2
Dialogue 1
tender
Dialogue 1
tender
(Dialogue 2)
(tender)
Final award
Model 3
(completion)
Management
and Maintenance
Model4
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and, on the other hand, limiting the extra (political) process risk related
to an early start and prolonged tender procedures (Arts et al 2006).
Contractors consider government that knows what it wants as a very
important pre-condition for becoming involved in a tender procedure. In
other words, government should provide for a clear and focused question
(definition of problems and objectives).
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FIGURE 4
Map of the Netherlands with the Four Cases Indicated
N31 Zurich Harlingen
Second
Coentunnel
A4 Steenbergen
Passage A2
Maastricht
equally effective and cost efficient. However, the Minister had agreed
earlier on supporting the four-lane alternative, if the Province provided
the extra funding needed. The funding for the D&C contract is provided
by National Government, the municipalities involved and the Province of
Friesland. At this moment the route determination/EIA-procedure has
been completed successfully. In July 2006 the tender procedure resulted
in awarding the D&C contract. A year later, in July 2007, the actual
construction works had begun.
Goals and Expectations of Early Market Involvement
In the N31 Z-H project, the route determination/EIA-procedure and
the tender procedure were, for the first time in the Netherlands, being
performed parallel. The possibility to apply in this project the approach
of early contractor involvement only became clear after the project study
phase was (almost) completed. The Minister had already formulated the
Standpoint. An early contractor involvement approach in the form of
parallelization of procedures was chosen because of pressure of time
limits, caused by commitments regarding the projects date of
completion. In order to enable timely completion parallelization of the
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Lessons Learned
y A parallelization approach after the Draft Route Decision can result
in potential conflict between the Route Decision and the ToR of an
integrated contract. The level of detail of the Draft Route Decision
could limit the creative freedom of the contractors in the tender and,
subsequently, in the construction. A further specification of the
(Draft) Route Decision in order to improve the legal position of the
stakeholders, together with the formal-juridical character of the route
determination/EIA-procedure, can limit the possibilities and the
creativity of the contractors.
y The transaction costs of the project were relatively low when
compared to the total budgeted costs. However, considering the size
of the project and the limited room for creativity of the contractors, it
could be questioned if it is justified to let five participants develop
solutions that cannot provide for more creative quality.
y It is necessary to have commitment among the governmental actors
beforehand. Especially in this case, with multiple actors responsible
for funding and an experimental character, an agreement over the
scope, preconditions and the ToR, the main conditions for the tender
procedure, proves to be essential.
y The time gained by parallelization is substantial even if early
contractor involvement started in a relatively late stage.
Project Capacity Expansion Second Coentunnel
The project Capacity expansion of the Coentunnel is part of an
infrastructure construction program that aims at stimulating the
accessibility in the greater Amsterdam area. The project includes the
design and construction of a second Coentunnel, the renovation of the
first Coentunnel and a 30-year exploitation and maintenance of the
tunnels. The resulting DBFM-contract also includes (co) funding of the
project by the contractor.
In the preparatory stage of the tender procedure, the Minister of
Transport, the Province of Noord-Holland, the Municipality of
Amsterdam, the Authority of Amsterdam Region, and three other
municipalities involved, signed a covenant in 2004.
As in the N31 Highway case early contractor involvement started at
the end of the project study phase. Market parties were invited to suggest
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changes in the Draft Route Decision within the boundaries of the public
covenant. The DBFM-contract was reached through a competitive
dialogue procedure with 5 pre-selected market parties. The dialogue
included three stages:
1. In the first stage, the number of competitors was brought down to 3
on the basis of a proposed realization strategy, in which 5 essential
elements for success were incorporated in plans assessed and ranked;
2. The goal of the second, consultation stage was to optimize the tender
documents, and discuss the realization strategy and the inventory of
risks and wishes as part of the award criteria;
3. The third stage aimed at reaching agreement over the dialogue
products, the tendering and the DBFM-contract.
Subsequently, the definitive bids were requested and submitted.
Afterwards, the winning contractor could be selected. The contract close
took place in April 2008. The actual construction works is scheduled to
start in 2009.
Goals and Expectations of Early Market Involvement
Before the procurement procedure started, a concept for the Draft
Route Decision was formulated. The Draft Route Decision has been
elaborated parallel with the tender procedure. It was finalized in
February 2006. The final Route Decision was taken in February 2007. It
was intended to include in the final Route Decision the outcomes of the
public consultation as well as beneficial measures of the contractor.
These measures should have ensured a (legally) more robust Route
Decision. This illustrates the projects aim for early contractor
involvement, which could be characterized as focusing on project
control.
Description of the Approach to Early Market Involvement
The latter related to the issue of air quality, which is critical success
factor to many road development projects in the Netherlands. In the
tender procedure, air quality has been used as a qualitative sub-award
criterion. It is one of the essential elements for success in the dialogue
phase and it is part of the definitive tender requirements. The essential
element of sufficient air quality had to be fulfilled; otherwise it would
result in a (fictitious) penalty on the offer. This qualitative criterion
related to the desire of the authorities to stimulate better air quality
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the Draft Route Decision (which has not been accepted and therefore is
not definitive), including all the studies and documents, will be handed
over to the competing contractors. The dialogue consists of three rounds,
and aims ultimately at realizing the aqueduct. The final offer must
include a maximum price for the complete contract, the price of the
aqueduct, other content-related data like the (spatial) dimensions of the
solution proposed, and drafts of the required (environmental) supporting
studies. After the preliminary award of the project, the responsible
authorities have the possibility to increase the budget for the aqueduct
solution. If the maximum price of the bids is within the budget of the
project, the competitors with the highest bids are excluded from the rest
of the bidding process. The remaining 3 competitors participate in a
fourth dialogue round, after which the final bids will be assessed, mainly
on basis of their price. If all maximum prices of the bids are higher than
the budget for the aqueduct, all competitors can make another bid for
constructing the bridge. The final supporting studies have to be delivered
shortly after awarding the project. The final Route Decision will be based
on the bid of the winning competitor. When this decision is irrevocable,
the contractor can start with the construction works.
Lessons Learned
y With hindsight, some sort of market consultation before the preferred
alternative was chosen would have been profitable for the early
contractor approach.
y The planning and procurement experts should cooperate in one team
in the preparation of a project. This cooperation is needed to address
the differences in the dynamics of the project study and the tender
process. However, coordination of the different teams could result in
time overruns because the teams have different aims. The project
study aims at a widely accepted solution, keeping as much
possibilities open until the end. The tender team aims at selecting
one solution, as quickly as possible, in order to contract a market
party.
y Inventing, coordinating and developing an interweaving approach
may take a lot of time. In this project this has taken about one year. It
has to be seen whether this preparation time will be effective with
respect to the time gained overall and/or the quality or project control
that is realized.
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56). Since not all issues will have priority, it is preferable to choose one
main goal when developing a strategy for early contractor involvement.
Of course, this might be combined with defining some sub-goals and
constraints. Therefore, it is important to clarify in an early stage which
added value contractor involvement may have for the specific project
that is planned. To this end, the Dutch Ministry of Transport has
developed a market scan instrument which has to be applied for every
new infrastructure project of the Ministry. This market scan is an inhouse analysis, which makes in a structured manner clear whether early
market involvement may provide opportunities for added value. This
scan should be carried out early in the planning process of a project; it
looks for potential value for money (i.e., in real money terms or in time
or in quality), it identifies which market parties might offer this added
value and how and when to approach them (V&W, 2006a). The market
scan starts from the governmental perspective. Its complement from a
mere market perspective is the market consultation.
Market Consultation: Technical Dialogue During the Planning
Procedure
The European Public Procurement Directive (i.e. consideration 8)
contains the possibility to request advice, before the tender procedure, by
means of a technical dialogue or accept an unrequested advice, which
can be used for defining the tender/contract documents. A requirement is
that this will not result in exclusion or limitation of competition of
market parties. Therefore, government should prevent that certain market
parties are given preferential treatment and gain such competition
benefits that they were not allowed to offer a bid.
By consultation with market parties the government, that want to put
out a tender, can test whether certain technical, financial-economical,
organisational, juridical or spatial pre-conditions would have the desired
result. In addition the government can discuss about the organisational
set-up of the tender procedure. In short, market consultation can be seen
as an exchange of information that is organised by the government with
interested (pre-selected or not) market parties or experts about the
coordination of mutual requirements for the preparation of a (major)
governmental project.
If interweaving or parallelization of the tender and planning
procedures is not possible (anymore) because of project specific reasons,
it can be relevant to carry out a technical dialogue before starting the
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ACKNOWLEDGEMENTS
The authors wish to thank Marjolijn Lubbert, contractmanager of the
project A2 Maastricht and Marijke Nagelkerke who works for the PPP
Unit, Rijkswaterstaat, of the Ministry of Transport for their invaluable
assistance.
REFERENCES
Akkermans, H.A., P. Bogerd & B. Vos (1999). Virtuous and Vicious
Cycles on the Road Towards International Supply Chain
Management. International Journal of Operations and Production
Management, 19 (5-6): 565-581.
Arts, J., Nijsten, R., & Sandee, P. (2006). Very early Contracting in
EIA: Dutch Experience With Parallel Procedures For Procurement
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