Conservation tenders use a competitive process to identify and secure cost-effective conservation works on private land. Agreed tenders are underpinned by enforceable agreements such as common law contracts or covenants. Conservation tenders are implemented in a number of sequential stages.

• The first stage is the detailed design of the conservation tender. This stage includes considering factors such as objectives, target areas, who is eligible to bid, budgets, metrics, tender design, contract design, communication and probity. Stage 1 is usually undertaken in conjunction with experts in natural resource management (NRM) and economics.
• The second stage is the call for expressions of interest from eligible land managers. This stage is underpinned by an information and awareness campaign, and may include meetings and workshops to increase land managers’ understanding of the program. This stage focuses on ensuring good participation levels in the tender process.
• The third stage of the process involves providing land managers with bid documentation, including details of the program, the roles and responsibilities of each party, and guidance on how to prepare their bids. This information is clear and concise and targeted to the needs of land managers.
• In the fourth stage of the process, land managers prepare their bids, outlining site details, the conservation works proposed and their price. Site visits by technical officers may be necessary to advise on priority management actions and to identify and evaluate environmental values. Bids are then submitted by land managers.
• Bids are evaluated using the metric and assessment mechanisms established during the design phase. Evaluation involves significant administrative effort and adherence to probity, and may require further technical work such as GIS mapping of bids and determining the relative environmental benefits of respective bids. The most cost-effective bids are selected and successful and unsuccessful candidates notified.
• Contracts are completed with successful participants. This involves finalising contract conditions—what, where, when and possibly how the conservations works are to be undertaken—and establishing payment schedules and other administrative arrangements such as contracts. These agreements are legally enforceable.
• After contracts are signed, land managers can start to undertake the conservation works according to formal agreements, including reporting on progress against contract requirements. Land managers typically invoice on completion of conservation works.
• As a final stage in the process, tender administrators monitor and evaluate implementation of the conservation tender, making any necessary program modifications allowable under contractual arrangements.

Key design and implementation principles

Conservation tenders are most appropriate for targeting important environmental assets, for example water quality in sensitive aquatic systems, where the private costs of conservation works exceed the private benefits—there is no incentive for land managers to improve conservation outcomes on their own initiative. Conservation tenders may also be used to fund or underwrite transitions from unsustainable practices to sustainable practices, even if there are long-term benefits to the land manager to do so privately.

Understanding the science of the relationship between conservation works and environmental outputs is essential for developing a robust conservation tender. These relationships can be formalised in a ‘metric’. Figure 1 shows a metric for a water quality conservation tender. The numerator calculates the impacts of the site attributes and the proposed management actions to estimate a change in loads, measured in physical units such as tonnes of sediment or a proxy indicator. The denominator reflects the bid costs, including site acquisitions, rehabilitation and ongoing management costs.

Figure 1: Example metric framework (water quality)

The metric allows the relative cost-effectiveness of individual bids or configurations of bids to be determined. Bids should be funded in a descending order of cost-effectiveness until the tender budget is exhausted or a maximum cost threshold is reached.

Conservation tenders can target single or multiple objectives. While complementary multiple objectives achieved via similar conservation works will produce cost efficiencies, the complexities of multiple-objective tenders are significantly higher.

Conservation tenders must be underpinned by enforceable common law contracts or mechanisms such as covenants. Ideally, contracts should specify outcomes to promote continuous innovation. However, for some issues, explicitly detailing inputs and approaches within contracts may be more appropriate to ensure that conservation outcomes are enduring.

To ensure an efficient market is established through the conservation tender, the program objectives, processes, timelines, assessment methodologies, and roles and obligations of all parties should be very clear and communicated to land managers.

Financial aspects of bids should remain commercial-in-confidence between the landholder and tender administrator. Tender probity should be central to implementation.

Formal monitoring and reporting of the performance of the conservation works, the environmental change achieved and the efficiency of the tender program should be undertaken to demonstrate value for money to funding organisations such as the Australian Government or state governments, and to ensure future programs are enhanced.

Resource and skill requirements

Of all market-based instruments (MBIs), conservation tenders are the most closely aligned with traditional regional NRM groups activities. However, conservation tenders can be complex, particularly where multiple objectives are to be targeted.

Consideration of the total tender budget should be made during the design phase, particularly when developing metrics and sophisticated tenders. Care should be taken not to ‘over-engineer’ the tender design, as efficiency gains may not justify the additional investment.

As with all MBIs, a strong scientific basis must underpin conservation tenders for a transparent and robust assessment of the environmental benefits. Expert inputs are required from the biophysical and economic sciences, while other technical, legal and probity advice is also required. Some regional NRM groups have these skills within their organisations. Expert advice is advised to assist where needed.

Conservation tenders use a competitive process to identify and secure cost-effective conservation works on private land. Agreed tenders are underpinned by enforceable agreements such as common law contracts or covenants. Conservation tenders are implemented in a number of sequential stages.

• The first stage is the detailed design of the conservation tender. This stage includes considering factors such as objectives, target areas, who is eligible to bid, budgets, metrics, tender design, contract design, communication and probity. Stage 1 is usually undertaken in conjunction with experts in natural resource management (NRM) and economics.
• The second stage is the call for expressions of interest from eligible land managers. This stage is underpinned by an information and awareness campaign, and may include meetings and workshops to increase land managers’ understanding of the program. This stage focuses on ensuring good participation levels in the tender process.
• The third stage of the process involves providing land managers with bid documentation, including details of the program, the roles and responsibilities of each party, and guidance on how to prepare their bids. This information is clear and concise and targeted to the needs of land managers.
• In the fourth stage of the process, land managers prepare their bids, outlining site details, the conservation works proposed and their price. Site visits by technical officers may be necessary to advise on priority management actions and to identify and evaluate environmental values. Bids are then submitted by land managers.
• Bids are evaluated using the metric and assessment mechanisms established during the design phase. Evaluation involves significant administrative effort and adherence to probity, and may require further technical work such as GIS mapping of bids and determining the relative environmental benefits of respective bids. The most cost-effective bids are selected and successful and unsuccessful candidates notified.
• Contracts are completed with successful participants. This involves finalising contract conditions—what, where, when and possibly how the conservations works are to be undertaken—and establishing payment schedules and other administrative arrangements such as contracts. These agreements are legally enforceable.
• After contracts are signed, land managers can start to undertake the conservation works according to formal agreements, including reporting on progress against contract requirements. Land managers typically invoice on completion of conservation works.
• As a final stage in the process, tender administrators monitor and evaluate implementation of the conservation tender, making any necessary program modifications allowable under contractual arrangements.

Key design and implementation principles

Conservation tenders are most appropriate for targeting important environmental assets, for example water quality in sensitive aquatic systems, where the private costs of conservation works exceed the private benefits—there is no incentive for land managers to improve conservation outcomes on their own initiative. Conservation tenders may also be used to fund or underwrite transitions from unsustainable practices to sustainable practices, even if there are long-term benefits to the land manager to do so privately.

Understanding the science of the relationship between conservation works and environmental outputs is essential for developing a robust conservation tender. These relationships can be formalised in a ‘metric’. Figure 1 shows a metric for a water quality conservation tender. The numerator calculates the impacts of the site attributes and the proposed management actions to estimate a change in loads, measured in physical units such as tonnes of sediment or a proxy indicator. The denominator reflects the bid costs, including site acquisitions, rehabilitation and ongoing management costs.

Figure 1: Example metric framework (water quality)

The metric allows the relative cost-effectiveness of individual bids or configurations of bids to be determined. Bids should be funded in a descending order of cost-effectiveness until the tender budget is exhausted or a maximum cost threshold is reached.

Conservation tenders can target single or multiple objectives. While complementary multiple objectives achieved via similar conservation works will produce cost efficiencies, the complexities of multiple-objective tenders are significantly higher.

Conservation tenders must be underpinned by enforceable common law contracts or mechanisms such as covenants. Ideally, contracts should specify outcomes to promote continuous innovation. However, for some issues, explicitly detailing inputs and approaches within contracts may be more appropriate to ensure that conservation outcomes are enduring.

To ensure an efficient market is established through the conservation tender, the program objectives, processes, timelines, assessment methodologies, and roles and obligations of all parties should be very clear and communicated to land managers.

Financial aspects of bids should remain commercial-in-confidence between the landholder and tender administrator. Tender probity should be central to implementation.

Formal monitoring and reporting of the performance of the conservation works, the environmental change achieved and the efficiency of the tender program should be undertaken to demonstrate value for money to funding organisations such as the Australian Government or state governments, and to ensure future programs are enhanced.

Resource and skill requirements

Of all market-based instruments (MBIs), conservation tenders are the most closely aligned with traditional regional NRM groups activities. However, conservation tenders can be complex, particularly where multiple objectives are to be targeted.

Consideration of the total tender budget should be made during the design phase, particularly when developing metrics and sophisticated tenders. Care should be taken not to ‘over-engineer’ the tender design, as efficiency gains may not justify the additional investment.

As with all MBIs, a strong scientific basis must underpin conservation tenders for a transparent and robust assessment of the environmental benefits. Expert inputs are required from the biophysical and economic sciences, while other technical, legal and probity advice is also required. Some regional NRM groups have these skills within their organisations. Expert advice is advised to assist where needed.