The panel will discuss the myriad of procurement perspectives with a focus on the perceived (un)fairness of the process.
The panel at the Vancouver Regional Construction Associations, 2013 Construction Learning Forum, will discuss the myriad of procurement perspectives with a focus on the perceived (un)fairness of the process.
Issues to be discussed include how specific procurement participants, “onerous” bid clauses, post-bid negotiations and “onerous” construction contract clauses influence the participants’ relative viewpoints on and approaches to the process.
The panel will also discuss potential responses and / or solutions to these issues.
Speakers: Tyler Galbraith, Jenkins Marzban Logan LLP, Gavin Yee, Stuart Olson Dominion Construction Ltd. and Chris Kieswetter, P.Eng, Matcon Demolition Ltd.
Tyler is the moderator for this discussion and is starting out by defining procurement.
He is a lawyer and said some of the cases he sees are simply because a contractor didn't read the tender documents.
Requests for Proposals (RFPs) are not tender documents.
Tyler: Two central issues for procurement: All parties must trust each other; and the rules of the procurement process must be clear and fair.
Based on a question from the audience, Tyler is explaining the difference between a bid and a quote.
A quote is more informal and could be shopped because it's not a formal bid.
Tyler said, regardless of what you do, get everything in writing to protect yourself.
“The less formal the process, the less likely it’s a tender,” Tyler said, adding that’s a rule of thumb, not a hard and fast rule.
It's very grey area from when it changes from a quote to a bid, he said.
The inclusion of onerous clauses in the procurement documents;
Post-bid negotiations and addendums; and
The inclusion of onerous clauses in the construction contract.
Gavin: The behavior of contractors depends on the formality of the process.
Companies have to have a good training program in place for employees for when they ask subs about price, to make sure they’re not bid shopping," he said a bit later.
How is it possible to create a perfect tender document as some aspects are subjective, Chris asked, which has generated some good discussion in the room.
If you’re not getting good drawing and specs, it makes thing difficult for everyone involved.
Some "Onerous" Bid Clauses:
Privilege Clauses - discretion to not necessarily accept the lowest bid or other conditions;
"Be careful when you see these things," Tyler said.
"Make sure you read the bid document and you understand it," he added.
From a general’s perspective, we also expect the subtrades to read the general requirements: Gavin.
Unless the tender documents expressly state otherwise, the bid calling entity must use consistent and equal evaluation of bids without:
1. Hidden preferences or secret evaluation criteria; and
2. Giving a bidder an unfair competitive advantage within the tendering process criteria.
Pay when paid clauses.
Just because there may have been a Pay When Paid clause between and a general and a sub before on previous contracts, it doesn’t mean the clause is in effect on a new contract.
A Pay When Paid clause must be explicitly included each time.
"The whole point of this talk is about relationships and fairness," Tyler, but added that there are no owners in the room.
“Be clear when you’re bidding, what the payment terms are,” Tyler
Another “onerous” bid clause is a discretion clause. It permits a bid calling entity to waive irregular (defects) in a tender form.
However, a Discretion Clause can also be drafted to allow a calling entity to accept a non-compliant bid.
Another "onerous" clause is the Limitation of Liability Clause.
"Look out for this clause. It's appearing in a lot of documents," Tyler.
More to come
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