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Procurement Perspectives: Instruction to Bidders a key document in construction

0 74 Government

by Stephen Bauld

A key document for the conduct of the tender (or RFP) is known as the Instruction to Bidders. It will usually begin with the procedure for the submission of bids.
Procurement Perspectives: Instruction to Bidders a key document in construction

This includes the following items: the bid is in writing; a stipulation as to the place for delivery; a prohibition of late bids; confidentiality requirements; the prescribed manner for quoting prices; the possibility of any variation in bid prices (usually, such variations are excluded); the manner of making payments; conflict of interest; withdrawal of bids by a bidder; the right of the municipality to issue a binding interpretation, clarification and addenda to the tender; a statement that bids are to be opened for acceptance for a specific time and are irrevocable until after the expiration of that time; and a statement of the successful bidder's responsibility.

It also includes any requirements as to bid security, performance and other security; any provisions governing review of the successful bidder's performance of the contract; any right reserved in favour of the municipality to nominate subcontractors; a description of the general insurance and WSIB requirements for the successful bidder; provisions governing proof of insurance and setting out a claims protocol; general indemnification obligations of the contractor (e.g., in relation to construction liens); and an express obligation to provide goods and services free and clear of any patent or copyright.

There are also usually provisions regarding the payment of taxes, permitting a bidder to offer alternate proposals, procedures governing the award of the contract and the notification of the successful bidder.

Any reserved privileges of the municipality, whether of a general or specific nature, are also mentioned along with an express obligation requiring the successful bidder and all other suppliers to deal in good faith and to treat the municipality as its most favoured customer.

Standard terms and conditions relating to such matters as samples and demonstration, the use of brand name and generic goods, standard warranty requirements, any security clearance requirements, a non-exclusivity clause (allowing the use of other suppliers), a statement of the term of the contract and any early termination rights reserved in favour of the municipality along with a description of force majeure rights are also included.

Many of the foregoing provisions are clearly intended to apply after the award of a contract and thus in many respects the instructions to bidders may be viewed as one of the core packages of documents in a contract award by tender.

However, the practice in this regard varies from one municipality to another. Where the instructions to bidders do not survive as part of the ultimate project contract, the contract for works must be expanded to include provisions covering much of the area that elsewhere is included among the instructions.

In addition to the invitation for bids and the instruction to bidders, the following contractual documents are common in the construction context: bid form; agreement form (sometimes called the contract for work); general conditions; special provisions or supplementary conditions; plans and working drawings or design requirements; specifications; and addenda.

Bid form, agreement form and general conditions, together with the instructions to bidders, are sometimes called the "front end" documents.

In the construction industry, most contracts are written and are of considerable length. There are a number of basic contractual documents encountered in the making of a typical medium or large construction contract.

For municipal and other government contracts of the design-bid-build variety, the first document in sequence of time is the tender or RFP notice, which will usually be published in a major local newspaper and in an electronic tender system.

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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