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Procurement Perspectives: Key elements to fair and equal bidding practice

0 65 Government

by Stephen Bauld

It is a term resulting from the use of the tendering process that all bidders will be treated fairly and equally. This standard is easily applied in the tender context, in which decision-making is guided by one primary concern, namely price. It is far harder to apply when dealing with other forms of procurement practices.
Procurement Perspectives: Key elements to fair and equal bidding practice

In an RFP, the range of non-price considerations may be quite wide and can include such subjective factors as perceptions of competence in a given field and even personal attributes such as whether a particular contractor or its staff is considered trustworthy. An RFP will call for the contracting authority to exercise a considerable degree of skill and discretion in the award of the contract.

Provided the criteria of assessment that are employed are those that are specified under the terms of the RFP documentation, there is little problem.

However, despite these features of the RFP there are many cases in which at least some aspect of the right to receive fair treatment has been imported into RFPs from the law of tender. The scope of these rights must obviously be modified to suit the specific terms of the RFP, including the discretionary elements of evaluation and the wide range of criteria that may be employed in evaluation.

To the extent that a municipality has reserved discretion to conduct a subjective evaluation, that description should be respected by the courts.

Nevertheless, it is clearly not open to a contracting authority to introduce new evaluation criteria after the RFP has closed, nor to consider noncompliant proposals, nor bids received from non-qualified proponents. It is not open for the contracting authority to adopt any personal, subjective method of assessment in the place of the appropriate criteria and weighting contemplated in the document.

While the purpose of an RFP is to move the final decision away from pure consideration of price towards more complicated determinants, it does not follow that the law of tender has no application at all. There is no presumption that an RFP will necessarily take the form of a mere invitation to treat, and there is little question that a properly worded RFP may give rise to tender contract rights.

While the contract may not necessarily be awarded to the lowest cost bid, the general requirement for fair treatment continues to apply — at least until the point at which the rights of the supplier become so obscure and indeterminate as to cease to be legally enforceable.

The scope of that requirement for fairness and the manner in which it is to be applied vary widely depending upon the wording of the RFP documentation. The question of which rules under the law of tender should apply in any given case is complicated by the fact that the labels or names attached to the documents are not the determining factor; rather, it is the substance and terms of the contract that govern.

Whatever the case may be with respect to extreme forms of RFP, the law is clear that a "pure" tender (in which irrevocable bids are submitted on the understanding that the lowest compliant bid has at least a prima facia right to be awarded the contract) typically does in fact give rise to enforceable legal rights in favour of both the supplier and the contractor.

The determination as to whether such rights do in fact exist in relation to any given tender turns upon a series of questions, each of which must be resolved in favour of the prospective claimant.

The first bridge that a court must cross before deciding that so-called contract "A" rights have arisen in relation to a tender is to determine whether the terms and conditions governing the submission of a bid were sufficient to support such rights.

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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