Great Western Franchise – Invitation to Tender Great Western Franchise Invitation to Tender 27 July 2012 Page 1 of 164 Great Western Franchise – Invitation to Tender TABLE OF CONTENTS IMPORTANT NOTICE ...................................................................................................................................................4 SECTION 1: INTRODUCTION AND CONTEXT ............................................................................................6 1.1 PURPOSE OF THIS INVITATION TO TENDER........................................................................................................6 1.2 SCOPE OF THE GREAT WESTERN FRANCHISE....................................................................................................6 1.3 THE DEPARTMENT'S OBJECTIVES FOR THE GREAT WESTERN FRANCHISE ........................................................6 1.4 CLOSING DATE FOR BIDS ..................................................................................................................................7 SECTION 2: INFORMATION AND INSTRUCTIONS TO BIDDERS ..........................................................8 2.1 FRANCHISING TIMETABLE AND PROCESS..........................................................................................................8 2.2 RESTRICTION ON COMMUNICATIONS/PRESS RELEASES ETC DURING FRANCHISE COMPETITION ......................8 2.3 CHANGES IN CIRCUMSTANCES..........................................................................................................................9 2.4 COST OF BIDDING AND MODEL AUDITS............................................................................................................9 2.5 PREPARATION OF BIDS......................................................................................................................................9 2.6 DATA SITE ......................................................................................................................................................10 2.7 QUERY PROCESS.............................................................................................................................................10 2.8 STRUCTURE AND FORMAT OF BIDS.................................................................................................................11 2.9 EXECUTIVE SUMMARY & DELIVERY PLANS ...................................................................................................15 2.10 SPECIFIED PRICED OPTIONS ............................................................................................................................15 2.11 BIDDER INCREMENTAL OPTIONS ....................................................................................................................16 2.12 NON-COMPLIANT BIDS, STATEMENTS, CHANGES IN CIRCUMSTANCE AND SOSRAS ......................................16 2.13 SECRETARY OF STATE'S RISK ASSUMPTIONS (SOSRAS).................................................................................18 2.14 VALIDITY OF BIDS ..........................................................................................................................................18 2.15 INDUSTRY CONSULTATION AND DISCLOSURE OF INFORMATION IN BIDS........................................................18 2.16 EVALUATION OF BIDS.....................................................................................................................................19 2.17 INTERACTION WITH INTERCITY EXPRESS PROGRAMME (IEP) ........................................................................20 2.18 NEGOTIATION AND AWARD ............................................................................................................................20 2.19 DEBRIEF FOR BIDDERS....................................................................................................................................21 2.20 COMPETITION MATTERS .................................................................................................................................21 2.21 TRANSPARENCY AND FREEDOM OF INFORMATION ACT 2000.........................................................................22 2.22 REDACTIONS FROM THE FRANCHISE SIGNATURE DOCUMENTS.......................................................................23 2.23 VARIATIONS TO THE FRANCHISE AGREEMENT................................................................................................24 SECTION 3: THE BID SUBMISSION – REQUIREMENTS FOR DELIVERY PLANS............................26 3.1 INTRODUCTION ...............................................................................................................................................26 3.2 THE DELIVERY PLAN STRUCTURE ..................................................................................................................26 3.3 EVALUATION PROCESS – DELIVERY PLANS 2 – 11..........................................................................................30 3.4 EVALUATION PROCESS – DELIVERY PLAN 1...................................................................................................32 3.5 EVALUATION PROCESS – DELIVERY PLAN 12.................................................................................................33 3.6 SELECTION OF WINNING BID (EVALUATION PROCESS CHARTS 5 & 6) ............................................................33 3.7 VALUE FOR MONEY (VFM) ............................................................................................................................34 SECTION 4: THE FRANCHISE SPECIFICATION AND DELIVERY PLANS .........................................35 4.1 DELIVERY PLAN 1: STARTING THE NEW FRANCHISE SEAMLESSLY.............................................35 4.2 DELIVERY PLAN 2: MANAGING THE FRANCHISE COST EFFECTIVELY & EFFICIENTLY TO DELIVER BETTER VALUE FOR MONEY ................................................................................................40 4.3 DELIVERY PLAN 3: DELIVERING APPROPRIATE SOLUTIONS TO ACCOMMODATE PASSENGER GROWTH......................................................................................................................................................47 4.4 DELIVERY PLAN 4: MANAGEMENT AND DELIVERY OF INFRASTRUCTURE CHANGE..............60 4.5 DELIVERY PLAN 5: MANAGEMENT AND DELIVERY OF ROLLING STOCK CHANGE..................76 4.6 DELIVERY PLAN 6: ACHIEVING RELIABLE & PUNCTUAL TRAIN PERFORMANCE.....................86 4.7 DELIVERY PLAN 7: IMPROVING THE CUSTOMER OFFER AND EXPERIENCE...............................90 4.8 DELIVERY PLAN 8: BETTER STATIONS & ACCESS TO THE NETWORK..........................................97 4.9 DELIVERY PLAN 9: FARES POLICY AND MARKETING ....................................................................104 4.10 DELIVERY PLAN 10: TICKET SALES & REVENUE PROTECTION....................................................107 4.11 DELIVERY PLAN 11: MANAGING STAKEHOLDER RELATIONS & DECENTRALISATION.........111 4.12 DELIVERY PLAN 12: MODELLING CHANGE & PROFIT SHARING..................................................123 Page 2 of 164 Great Western Franchise – Invitation to Tender SECTION 5: THE BID: FINANCIAL ELEMENTS......................................................................................124 5.1 INTRODUCTION .............................................................................................................................................124 5.2 MODEL REQUIREMENTS AND CONSTRAINTS.................................................................................................125 5.3 FINANCIAL MODEL TEMPLATES ...................................................................................................................129 5.4 GENERIC BIDDING ASSUMPTIONS.................................................................................................................132 5.5 RECORD OF ASSUMPTIONS AND OPERATING MANUAL .................................................................................133 5.6 SPECIFIED PRICED OPTIONS, INCREMENTAL OPTIONS AND 'BLANK OPTION'................................................136 5.7 DEROGATIONS ..............................................................................................................................................136 5.8 MODEL SIGN-OFF -T ERMS OF REFERENCE....................................................................................................137 5.9 FINANCIAL STRUCTURE AND FUNDING.........................................................................................................141 5.10 OTHER INFORMATION REQUIRED..................................................................................................................142 5.11 FUNDING AGREEMENT..................................................................................................................................142 SECTION 6: FURTHER INFORMATION ....................................................................................................143 APPENDICES: .......................................................................................................................................................144 APPENDIX 1A: EVALUATION PROCESS CHART 1...............................................................................................145 APPENDIX 1B: EVALUATION PROCESS CHART 2...............................................................................................146 APPENDIX 1C: EVALUATION PROCESS CHART 3...............................................................................................147