The following is an open letter from Cr Tegan Swan to the State Member for Coffs Harbour, Gurmesh Singh , asking for information/clarification in regards to the tendering process for the CCS construction.
As we previously discussed on the phone, I would appreciate your assistance in helping me clarify a process that seems to be creating some confusion and concern within the community.
From what I can see there appears to be some ambiguity around the Early Contractor Involvement (ECI) process specifically for local government infrastructure projects.
As you are aware our Council are currently in the middle of a decision-making process to construct a new building in our CBD which will consolidate all our council staff offices into one place and also provide a larger library space to help us reach the state guidelines for libraries and also co-locate our gallery and museum in a combined area.
The project was earmarked to be expedited and was given approval to undertake processes that would facilitate that goal. One of those acceleration methods was to move to an ECI process for the detailed design and then construction for the building under a 2-phase contract.
At the request, and on behalf of the community, I am writing to you to seek guidance from the Office of Local Government (OLG) on the ECI process. I would appreciate if you could facilitate a formal response for OLG on the requirements under the Local Government Act 1993, Tendering Guidelines for NSW Local Governments and any other relevant circulars or best practice examples which could provide a clear direction of what is required for Local Governments utilising this process.
My understanding from the research I have done as part of my responsibility in the decision-making process, is that while ECI is common in infrastructure projects privately and somewhat in State and Federal examples, it is still only a relatively new option for Councils. As such, clear guidelines and examples have been more difficult to access.
Below is the information I have been able to find. Along with the information submitted to me by community members who would like their information included in this request.
According to a report prepared by Holding Redlich, “NSW local councils are unable to run a ‘single ECI’ process with only one proponent due to NSW Local Government procurement requirements including under the Local Government Act 1993 (NSW), as opposed to State and Federal government and private sector entities who are able to run ‘single ECI’ processes with a single shortlisted proponent.
A ‘double ECI’ process also complies with NSW Local Government procurement requirements, however, a ‘triple ECI’ was selected for this process having regard to the particular aspects of the contract and other market considerations.”The report can be accessed here: https://www.holdingredlich.com/blog/unlocking-the-value
While this appears to be a clear-cut explanation, as the report focuses on service contracts, it’s application to infrastructure contracts is being disputed. Clarification on the application of NSW Local Government procurement requirements specifically relating to large scale infrastructure projects would be appreciated.
Additionally, according to the National Alliance Contracting Guidelines – Guidance Note 6: Early Contractor Involvement and Other Collaborative Procurement Methods, Section 5 explains ECI as, “The default model involves a competitive ECI Phase; however in exceptional circumstances there may be justification to conduct a non-competitive ECI Phase (the alternative ECI model)*.
These options are described below. In the default ECI model there are three Phases:
1. Expression of Interest (EOI);
2. Request for Proposal (RFP); and
3. Early Contractor Involvement (ECI) or Tender Phase.
The EOI Phase can be open or select, with Suppliers invited to submit an EOI. This EOI is evaluated on the basis of non-price indicators such as capability, experience, financial capacity, personnel, and systems. The evaluation of this EOI is typically conducted as a desk top evaluation, resulting in a shortlist of Suppliers to be invited to submit a Proposal through the RFP process.
The RFP Phase is shortlisted to ideally no more than three tenderers. This Phase is generally more interactive than the EOI Phase with each tenderer submitting a Proposal to participate in the ECI Phase and evaluated on their schedule of rates and programme.
In the ECI Phase (or Tender Phase), two Suppliers are engaged under a services agreement (‘ECI agreement’) to work collaboratively with the Client and Designers in parallel to deliver upfront project development work and prepare a risk adjusted price for the Construction Phase to be delivered as a lump sum contract”.
The * associated with the alternate ECI model represents NOTE 11 in the guidance notes which states;
“NOTE: To satisfy government procurement requirements, the ECI Phase should always involve at least two Suppliers and a ‘single’ ECI Phase should be the exception, and only used where exemption has been sought and approved under the National Alliance Policy Statement. Competition underpins the achievement of VfM outcomes and is a requirement of government procurement processes. The default model is based on the best practice of a shortlist of two Suppliers competing in parallel in the ECI Phase as this creates optimum effective competitive tension.”
The entire document can be accessed here: https://www.infrastructure.gov.au/…/files/NACG_GN6.pdf…
To be completely transparent the document does not specifically reference any level of government rather refers to them in blanket terms. There is also a paper published in the International Journal of Construction Management on “Overcoming the Challenges of Early Contractor Involvement in Local Government Projects” which makes multiple references to the requirement for 2 contractors.
It can be accessed here: https://www.tandfonline.com/…/10…/15623599.2020.1744216Or on UNSW website here: http://unsworks.unsw.edu.au/…/binbe8c0ce0-7959-4bd6…
As always there are two sides to every story and as such, I have also found this practice note referencing a single ECI contractor.
In fairness to considering all information I am also including this document as well.https://www.infrastructure.nsw.gov.au/…/aca…
Your assistance would be greatly appreciated. Unfortunately we are under a tight timeframe as a rescission motion involving the project has been lodged as has a request for an extraordinary meeting.
Due to this, the information above will be considered on this Thursday evening the 4th March, instead of the following Thursday as part of the ordinary meeting cycle.
Cr Tegan Swan
Councillor Coffs Harbour City Council.