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Unsolicited versus solicited public partnership proposals: is there a trade-off between innovation and competition?
Gonzalo Ruiz Diaz* 
Article | Year: 2024 | Pages: 311 - 335 | Volume: 48 | Issue: 48 Received: December 12, 2023 | Accepted: May 18, 2024 | Published online: September 3, 2024
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FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
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Author
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Country
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Findings
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Zawawi, Kulatunga and Tayapharan (2016)
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Malaysia
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Lack of competition in UP processes.
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Mallisetti, Dolla and
Laishram (2021)
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India
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Several flaws in their policies regarding implementation features
across the stages of UPs, such as defined objectives, absence of fees and
review timeframes in the submission, time frame and guidance on benchmarking
and market testing in the evaluation and development stages, and the time
frame for bidding and access to information in the procurement stages.
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Takano (2021)
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Peru
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Lack of competition in UP processes particularly at the subnational
government level.
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Marques (2018)
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Brazil, USA, Korea
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Success factors for UP programs: commitment and mutual help are
central to the process, robust and well-developed UP frameworks, competitive
tenders, sound governance practices and leadership of PPP units.
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Camacho, Rodriguez
and Vieira (2017)
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Brazil, Chile
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Difficulties in fostering competition (very few winners that are not proponents).
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Government's knowledge
of S (all technical solutions)
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Modality of
the PPP
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Scenarios
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Results
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Complete information
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SP
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Transfer design risk
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No new technical solution can be offered by the
proponent. Unique source of efficiency is competition.
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No transfer design risk
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No new technical solution can be offered by the
proponent. Unique source of efficiency is competition.
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UP
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Competitive tender
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No new technical solution can be offered by the
proponent. Unique source of efficiency is competition.
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Directly negotiated
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Null increase in welfare.
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Incomplete information
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SP
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Transfer design risk
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Both competition and a technical solution can be
a source of efficiency.
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No transfer design risk
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Unique source of efficiency is competition.
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UP
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Competitive tender
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Both competition and a technical solution can be
a source of efficiency.
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Directly negotiated
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Welfare enhancing effect of technical solutions
is offset with higher tariffs applied by the proponent.
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Source: World Bank (2014).
 Source: International Renewable Energy Agency (IRENA).
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Country
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Number of
unsolicited proposals
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Percentage
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Brazil
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105
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40.1
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India
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17
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6.5
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Colombia
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13
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5.0
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Peru
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10
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3.8
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Turkey
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9
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3.4
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Mexico
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8
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3.1
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Indonesia
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7
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2.7
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Jordan
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7
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2.7
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Honduras
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6
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2.3
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Philippines
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5
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1.9
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Russian Federation
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5
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1.9
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Bangladesh
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4
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1.5
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Dominican Republic
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4
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1.5
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Malaysia
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4
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1.5
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Pakistan
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4
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1.5
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Others
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54
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20.6
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Total
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262
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100.0
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Source: PPI World Bank.
Ahmad, E., Vinella, A. and Xiao, K., 2017. Contracting Arrangements and public private partnerships for sustainable development. Public Sector Economics, 42(2), pp. 146-169 [ CrossRef]
Baron, D. and Myerson, R., 1982. Regulating a Monopolist with Unknown Costs. Econometrica, 50(4), pp. 911-930 [ CrossRef]
Bederman, N. and Trebilcock, M., 1994. Unsolicited Bids for Government Functions. Alberta Law Review, 35(4), pp. 903-943 [ CrossRef]
Buccino, G. [et al.], 2019. Competitive Dialogue: An Economic and Legal Assessment. Journal of Public Procurement, 20(2), pp. 163-185 [ CrossRef]
Camacho, T., Rodriguez, B. and Vieira, H., 2017. Unsolicited Proposals in Infrastructure – Lessons from Brazil and Chile. In: J. Leitao, E. de Morais Sarmento and J. Aleluia, eds. The Emerald Handbook of Public-Private Partnerships in Developing and Emerging Economies, pp. 559-578 [ CrossRef]
Cova, B. and Salle, R., 2011. Shaping Projects, Building Networks. In P. W. G. Morris, J. K. Pinto and J. Söderlund, eds. The Oxford Handbook of Project Management, pp. 391-409).
Fernandez Moreira, T. and Sombra, T., 2019. An introduction to Public-Private Partnership in Brazil. Lexology, April 5, 2019.
Gilbert, R., 2006. Competition and Innovation. Journal of Industrial Organization Education, 1(1), 8. [ CrossRef]
Harsanyi, J., 1995. Games with Incomplete Information. The American Economic Review, 85(3), pp. 291-303.
Hodges, J. and Dellacha, G., 2007. Unsolicited Infrastructure Proposals. How Some Countries introduce Competition and Transparency. Gridlines, No. 19.
Hoezen, M., Voordijk, H. and Dewulf, G., 2012. Contracting dynamics in the
competitive dialogue procedure. B uilt Environment Project and Asset Management,
2(1), pp. 6-24 [ CrossRef]
Lissoni, F., 2005. The reaper and the scanner: indivisibility-led incremental innovations and the adoption of new technologies. Cambridge Journal of Economies, 29(3), pp. 359-379 [ CrossRef]
Mallisetti, V., Dolla, T. and Laishram, B., 2022. Unpacking the framework of unsolicited proposal for public private partnership projects – the Indian case. Journal of Financial Management of Property and Construction, 27(2), pp. 1366-1387 [ CrossRef]
Marquez, R., 2018. Empirical Evidence of Unsolicited Proposals in PPP Arrangements: A Comparison of Brazil, Korea and the USA. Journal of Comparative Policy Analysis, 20(5), pp. 435-450 [ CrossRef]
Osei-Kyei, R. [et al.], 2018b. Strategies for Effective Management of Unsolicited Public-Private Partnership Proposals. Journal of Management in Engineering, 34(3), 04018006 [ CrossRef]
Osei-Kyei, R. [et al.], 2018a. Motivations for adopting unsolicited proposals for public-private partnership project implementation: A survey of international experts. Journal of Financial Management of Property and Construction, 23(2), pp. 1366-4387 [ CrossRef]
Romer, P., 1990. Endogenous Technological Change. Journal of Political Economy, 98(5) [ CrossRef]
Sappington, D., 1991. Incentives in Principal-Agent Relationships. Journal of Economic Perspectives, 5(2), pp. 34-66 [ CrossRef]
Takano, G., 2021. The Competitive Performance of Public-Private Partnership Markets. The Case of Unsolicited Proposals in Peru. Utilities Policy, 27, 101274 [ CrossRef]
Tirole, J. and Laffont, J., 1993. A Theory of Incentives in Procurement and Regulation. Cambridge: The MIT Press.
UNCITRAL, 2001. Legislative Guide on Privately Financed Infrastructure Projects. New York: United Nations.
Victoria Partnership, 2001. Partherships Victoria: Practitioners’s Guide. Melbourne: Department of Treasury and Finance.
World Bank, 2014. Unsolicited Proposals – An Exception to Public Initiation of Infrastructure PPP. An Analysis of Global Trends and Lessons Learned. Washington D.C.: PPIAF.
World Bank, 2017a. Policy Guidelines for Managing Unsolicited Proposals in Infrastructure Projects, Vol III. Review of Experiences with Unsolicited Proposals in Infrastructure Projects. Washington D.C.: PPIAF.
World Bank, 2017b. Competitive Dialogue: How to Undertake Competitive Dialogue Procurement Process. Washington D.C.: The World Bank.
World Bank, 2020. Benchmarking 2020 Infrastructure Development. Assessing Regulatory Quality to Prepare, Procure and Manage PPPs and traditional public investment in infrastructure projects. Washington D.C.: The World Bank Group.
Yun, S. [et al.], 2015. Critical Organizational Success Factors for Public Private Partnership Projects – A Comparison of Solicited and Unsolicited Proposals. Journal of Civil Engineering and Management, 21(2), pp. 131-143 [ CrossRef]
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September, 2024
III/2024
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