Problems still arise every week related to the tender process. 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 suppliers who participate in the contest. 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.
I see so many inconsistent tender documents from municipalities each week that it makes me wonder why every tender that is issued won't at some point end up in a dispute.
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 provisions, in such documents against the municipality, under a principle 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 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 specific procedure should be provided for clarifying any ambiguous or otherwise uncertain aspects of the tender process. The same clarification should be provided to all parties, not just the supplier 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 supplier to depart from the understanding on which all other suppliers are competing creates the appearance of a bias process. Inherent in each supplier's right to be treated fairly is the right to insist upon a level playing field.
The tender rules should include a binding dispute resolution procedure. All contractors and 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.
For instance, the tender guidelines might state: As a condition precedent to any legal right of action with respect thereto, any dispute over, 1) the award of contract; 2) any alleged breach of these guidelines (including the process of bid evaluation); or 3) any other rule applicable to the conduct of the tender or the award of the contract, must be made in writing, signed by the complainant, and submitted to and received by the manager of purchasing no later than 3 p.m. on the 10th business day following the posting of the name of the successful bidder on the purchasing department website.
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 whether 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.
Stephen Bauld is a government procurement expert and can be reached at email@example.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.