Article

Procurement Perspectives: Defined rules integral in a tender

0 205 Government

by Stephen Bauld

The fact that every municipality will not have the same format related to the tender process does not preclude them from following the same basic rules. Since a tender is a contract competition conducted in accordance with defined rules, the terms of those rules must be clear and understood by the potential contractors who participate in the contest.
Procurement Perspectives: Defined rules integral in a tender

The timetable for the tender should be clear and readily identifiable. Any requirements as to the bonding or other security should also be made prominent. There should be no ambiguity or inconsistency in the documentation. Contract terms should not be buried so that an inexperienced bidder will be likely to miss them.

Although there is a general obligation on bidders to read over the tender documents carefully, the courts construe any ambiguity (or particularly harsh provision) in such documents against the municipality, under a principal of contract interpretation known as the "contra proferentem rule." Therefore, it is highly advisable to bring any unusual provisions to the attention of the reader. A checklist should be provided of all tender documents, so that each bidder can confirm that it has received the complete package. It is also advantageous to specify the number of pages in each document (e.g., many municipalities follow the practice of numbering each page as "page n of m").

A specified procedure should be provided for clarifying any ambiguous or otherwise uncertain aspect of the process. The same clarification should be provided to all parties, not just the contractor who requests it. For a tender to be conducted fairly, it is necessary that everyone is required and allowed to play by the same rules. There can be no special arrangements. Allowing one contractor to depart from the understanding on which all other contractors are competing creates the appearance of a biased process. Inherent in each contractor's right to be treated fairly is the right to insist upon a level playing field.

The tender rules should also include a binding dispute resolution procedure. All suppliers should be required to lodge a formal written complaint within a specified time limit, if they wish to object to the manner in which the tender was conducted. The tender rules should exclude any right of dispute outside this process. If nothing else, such a regime can bring closure to any lingering debates or doubts as to whether a contract was fairly awarded.

The implicit tender contract also necessitates taking great care in preparing the tender documents to ensure that they make sense to the reader. Although clarity and precision are important when a request for tender, proposal or information is employed, its importance is of a different order of magnitude in a tender, as contractual obligations may flow without further discussion between the parties. Tender documents should be drafted in accordance with the best standards of legal drafting. The documents must be well organized, and written in appropriate language for a legal document. The use of terminology must be consistent. It is also essential not to leave important elements of the total contemplated transaction to chance. For instance, where the tender calls for the ongoing supply of materials, the tender documents should specify the time during which the obligation to supply will continue.

Although a tender may provide for supply of indefinite duration, in general rule, such a tender will be construed as containing an implied condition that it is terminable on reasonable notice. As the amount of notice required may be the subject of some dispute, it is advisable to deal with the matter expressly.

Even though all tenders may not look the same from one municipality to another, they must all follow the basic rules of tender law. Fair, open, and transparent are the key aspects to every tender.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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