Construction practice guide: Expression of interest for construction projects

Introduction

This guide describes the elements of preparing an expression of interest (EOI) for construction projects on an open tendering basis. This document may also be used when preparing EOIs for construction projects on a selective basis.

It has been written following feedback from NSW government agencies for guidance about the EOI process together with documentation that may assist agencies when calling and evaluating EOIs.

Use the expression of interest standard form for the preparation of a request for expression of interest for construction projects on an open tendering basis.

Background

Context in NSW Government Procurement Policy Framework

This guide has been prepared to support the tendering activities carried out by NSW government agencies when delivering construction projects. It is consistent with NSW Government Procurement Policy and the NSW Government Code of Conduct.

Purpose and scope of the guidelines

This guide is designed to provide NSW government agencies and project managers engaged by agencies, a structured approach to preparing a call for an expression of interest (EOI) for construction projects on an open tendering basis.

The scope extends from determining when an EOI may be appropriate, preparing the documentation, evaluating and selecting a shortlist of service providers to proceed to the next stage of a multi-stage tendering process.

The guide primarily focuses on EOIs for selecting pre-registered service providers to be invited to tender in the second stage for a specific construction contract.

Complementing the guide are the following standard form documents that can be modified to meet users’ specific requirements:

• request for EOI (open tenders)
• request for EOI – returnable schedules (open tenders)
• request for EOI (selective tenders)
• EOI evaluation (for use with both open and selective EOI call documents)

Overview

Agencies should aim for an optimal arrangement that fully involves the market, achieves reasonable and effective competition, and limits the amount of unnecessary effort required in providing and evaluating the tenders.

Expressions of Interest provide a mechanism that limits tendering costs for industry as a whole in that only those service providers pre-registered after an EOI process are invited to tender. The associated costs to agencies are also lower through the reduced number of tenders to evaluate, compared with open tenders.

The use of an open EOI process is considered to be a suitable option for consideration by agencies.

Pricing is not sought at the EOI stage of the procurement process nor is a contract formed.

Expression of interest

Appropriateness of an EOI

An expression of interest may be summarised as a process of seeking an indication of the interest of potential service providers, capable of undertaking specific work.

An EOI is usually the first stage of a multi-stage tender process and may be used to:

• establish potential service providers for a single contract
• establish a panel of service providers for several contracts in an ongoing work program
• identify applicants with the best proposals, usually for more complex or unusual procurements.

EOIs enable the capabilities of applicants to be assessed in relation to a range of non-price evaluation criteria. An evaluation committee evaluates the suitability of each applicant and recommends a shortlist of the most suitable applicants to be invited to provide priced tenders or detailed proposals in the next stage.

EOI process

General requirements

The project manager (or in the absence of a project manager, the agency representative responsible for initiating the request for EOI) identifies and formulates the general requirements. Key points to consider are:

• ensure consistency of project objectives with NSW Government policies
• prepare a commercial strategy to achieve the project objective in accordance with legal and probity requirements.

Risk management

It is essential to identify risks at the commencement of the EOI process. Successful risk management planning in procurement is about identifying, then planning, appropriate and effective action to avoid or control these risks.

Some key steps that may assist in the risk management planning stage include:

• develop a plan of action to manage the EOI process
• appoint key personnel as necessary and define responsibilities, for example project manager
• develop a risk management plan for the EOI process.

EOI call document

The project manager is to ensure that the request for EOI documents the agency’s requirements fully and to ensure that the tendering process achieves the best results.

The request for EOI documentation consists of:

• Request for expressions of interest – Conditions for application. This document includes the details, scope and indicative timetable for the project, further steps proposed beyond the EOI stage, the terms conditions and processes governing the tender process for the EOI, the evaluation criteria;
• Returnable schedules. Schedules that are to be completed by applicants and form the basis on which applicants are to be assessed against the evaluation criteria.

View a standard form request for EOI for construction.

RFT number

A request for tender (RFT) number is required to identify the project in Tenders. The RFT number becomes the identifying contract number when the contract is awarded.

For the EOI stage, the RFT number is generally followed by EOI, for example 1200000 EOI.

Advertise the request for EOI (including mandatory and project-specific criteria)

• Ensure method of requesting and receiving applications is suitable for the EOI and in accordance with the NSW Government Code of Conduct.
• Ensure the advertisement clearly outlines the purpose of the EOI, the scope of project and capability/experience required to undertake the work, the mandatory and project specific evaluation criteria.
• Encourage applicants to provide relevant information in their response so that the evaluation panel is fully informed about the proposal.
• Stress to applicants not to assume that the agency and evaluation committee have any previous knowledge about an applicant’s skills, abilities or past performance.

EOI evaluation criteria

Pricing is not included in the evaluation criteria as pricing is not sought at the EOI stage.

The project manager, key stakeholders and the evaluation committee, as appropriate, are to be involved in determining the evaluation criteria.

In formulating the evaluation criteria, consideration must be given to mandatory criteria to be included. Such criteria are not weighted or scored, either a 'pass or fail' applies. More information on mandatory criteria is included below.

It is essential to select appropriate project-specific criteria that provide for applicants to demonstrate skills, capacity and capability to undertake the category of work involved.

Ensure that the evaluation criteria based on management systems for the construction contractor comply with the respective NSW Government management systems guidelines for the construction industry.

The evaluation criteria must be specified in the conditions for application and the information requested in the returnable schedules and otherwise is to match the evaluation criteria. This provides the basis for the proper assessment of applications as set out in the EOI evaluation plan.

Mandatory criteria

There are certain mandatory criteria that applicants must meet to be considered acceptable and the requirements to demonstrate compliance must be stated in the conditions of the Request for EOI. Mandatory criteria include:

• legal entity
• financial capacity
• work health and safety management
• environmental management
• quality management
• industrial relations.

Aboriginal participation may be included as a mandatory criterion, subject to consideration by the agency that it is required. For more information, refer to Aboriginal Participation in Construction Guidelines.

Project-specific criteria

In determining the project-specific criteria, select those criteria that will best assist in differentiating between applications. To achieve this, the criteria could reflect:

• the nature of the services
• factors critical to the success of the engagement
• associated risks.

Select at least 3 and preferably no more than 5 criteria.

Each criterion should have its main elements listed to assist in the evaluation. The elements will form the basis of scoring. The inclusion of response schedules clearly identifying the specific information required facilitates both the applicants in responding as well as the evaluation committee in assessing and scoring.

Examples of project-specific criteria

Organisation’s experience, capability and achievements:

• evidence of the applicant’s experience and performance on projects of a similar size, nature and complexity in Australia over a nominated number of years, for example 5 years
• proven capacity, ability and experience in working and delivering projects in an occupied/operational/heritage building/ environment (delete or modify as required)
• evidence of external performance recognition such as contractor performance reports, client reference letters, nominated referees who can confirm successful performance on completed projects

Experience, capability and availability of key personnel:

• the composition of the applicant’s construction delivery team, including the key personnel and major sub-contractors/consultants proposed (including relevant qualifications and experience)

Understanding of the engagement – task appreciation and methodology

• understanding and appreciation of the agency’s requirements in the delivery of the project
• he applicant’s commitment to and capability in meeting the indicative proposed delivery program
• he experience of the applicant with the conditions of contract named in the EOI call documentation
• demonstrated knowledge of public sector operations, policies and legislation relevant to the services
• demonstrated understanding of, and an ability to comply with, relevant requirements of the NSW Government Procurement System for Construction.

Briefing sessions

There may be instances when it is considered necessary to hold meetings prior to the close of the request for EOI to assist potential applicants’ understanding of the project requirements.

Attendance at the briefing sessions may be mandatory or optional depending of the nature of the meeting. Briefing sessions must be carefully planned and managed to ensure that no applicant is given any advantage over any other applicant because of the meeting.

Information on any briefing session including date, time, location, optional or mandatory attendance is to be included in the advertisement or invitation document. In addition, when mandatory attendance is required, include a statement that applications submitted by applicants who fail to attend will be passed over.

EOI evaluation plan

Develop an EOI evaluation plan to manage the evaluation process. The plan must:

• be consistent with and address the requirements stated in the request for EOI conditions for application
• describe how an applicant’s response to each evaluation criterion will be dealt with
• include a guide to scoring project-specific criteria and calculating final scores
• provide for the scores to be reached by consensus
• include the weighting to apply to each criterion based on their relative importance and likely impact on the outcomes of the project
• include the minimum and maximum number of applicants to be shortlisted.

In determining the number of applicants to be shortlisted, it is recommended that an additional number (for example 2) be considered as reserves to allow for possible withdrawal of selected applicants.

The evaluation plan, including the scoring and weightings to apply to the assessment, is to be completed prior to issuing the request for EOI and be approved prior to the date the EOI closes.

Evaluation committee

The evaluation committee is to comprise members who are familiar with the requirements of the request for EOI and have relevant skills, experience and expertise in the nature of the project.

The evaluation committee is to:

• ensure that the approved evaluation plan is followed and that all applications are assessed in accordance with the plan
• use its professional skills and experience to identify the applicants that best satisfy the evaluation criteria
• produce an evaluation report including a recommendation for those applicants to be pre-registered and to be given an opportunity to tender for the next stage of the project.

The principal will determine which of the applicants will be pre-registered. Only applicants that are pre-registered through this EOI process will be eligible to submit tenders at the next stage.

Scoring project-specific criteria

Document the procedure to be used for scoring adopting the following procedure.

• Score each criterion out of 100 based on the following scaling and include comments that support the rating:

• To assist in scoring each criterion and its elements, the evaluation committee is to identify and document the attributes of applicants’ responses that will determine the rating/score to be allocated within the scale. For example, if a response is considered to be a ‘good to very good’ rating, specify the factors that will determine if the score to be allocated is 34, 66 or a score in between.
• Ensure that there is consistency in the scores allocated and supporting comments across criteria and individual application assessments.
• The evaluation committee should use a collaborative, consensus-reaching approach in determining the scores. Each evaluation committee member should first score the criteria independently and record comments supporting the rating. Then the evaluation committee as a whole should compare the individual scores, discuss any differences and reach a consensus on the final score for each criterion together with supporting comments.
• Calculate weighted scores for each criterion by multiplying the consensus score for each criterion by its assigned weighting.
• Add the weighted scores to determine the total score for each applicant.
• Rank the applicants based on the total scores from highest to lowest.
• In the event of equal scoring for any applications, the final ranking will take account of contractor performance data from the Contractor and Consultant Management System (CCMS), agency’s own performance management system or formal performance reports from the applicants’ clients. The applicant with the higher level of performance will receive the higher ranking.

Shortlist appropriate applicants

• Submit a shortlist of applicants for approval.
• Recommend and obtain approval to proceed with tendering process with the approved pre-registered applicants.
• Ensure that the proposed tender documents are suitable for the procurement activity.
• Ensure that the EOI evaluation criteria are consistently reflected in the proposed tender documents.

Disclosure

• Notify successful and unsuccessful applicants of the EOI outcome.
• Provide unsuccessful applicants with a debriefing.
• Details of the request for EOI and the outcome of the EOI process must be disclosed in accordance with the Government Information (Public Access) Act (NSW) and Premier’s Memorandum 2007-01.

Related resources

Find more resources on the construction category page.