Tim Johnson, head of development consulting, London & southeast at DTZ, gives step two of his advice to getting private developers involved.

To read Tim’s first article on this subject click here

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Having completed the preparation phase, you’re now ready to develop your strategy and approach for the procurement proper.

Strategy and approach – Part 1 – Procurement options

Considering this phase carefully can make your proposition attractive to the market by taking into account the time, resources and risk involved for potential partners.

First, use the time in advance of procurement to test your ideas on the market. Ask developers for their views and use feedback to knock any rough edges off your approach. These discussions can also form part of a broader marketing campaign to raise the profile of your project and start to warm up your target audience without prejudicing the result of the process.

Second, identify and assess the procurement options open to you. This should first involve checking whether you will need to procure through the Official Journal of the European Union (OJEU), since if you do then the Public Contracts Regulations (2006) apply.

If the Public Contracts Regulations do not apply, you have much more flexibility regarding how you want to procure. Straight land disposals with no enforceable obligations and schemes where the value of works is less than the OJEU value threshold (approximately £3.5m) are an example of where the Regulations may not apply.

If, however, the Regulations do apply, you will have to procure through one of the available procurement routes…

A ruling by the European Court of Justice in 2007 (the Roanne case) shed further light on how the regulations should be applied to developments.  The OGC published a useful Policy Note in October 2009, updated on 30 June 2010, on the application of the public procurement rules on development agreements. The Note sets out three questions you should ask  to determine whether the Regulations might apply:

1.       Is there a work or works required or specified by a contracting authority?

2.       Is there an enforceable obligation on a contractor to carry out that work or works?

3.       Is there some pecuniary interest for carrying out this work (not necessarily a cash payment)?

If the answer to all of these questions is ‘yes’, then it is likely that the public procurement rules might apply.

In the next post, I will set out the procurement routes open to you should you need to use them, and how to make your approach market-facing.

Click here to go back to Tim’s first article

Further articles on this topic are coming soon…

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