What a company writes in a tender response can have a real bearing on how successful it is. Its tender response can also create unintended legal liability.
Government departments, local authorities and private companies can all purchase goods, services or works through a competitive tender process.
In Part 1 I looked at how an organisation can help protect itself when issuing a request for tender (RFT). In Part 2 I will highlight some key guidelines for suppliers when responding to a customer’s tender for work, goods or services.
A public procurement process is the way many public authorities, like government departments and local authorities, purchase goods, services or works from suppliers.
The European Commission reports that from April 2016, new rules have come into force that change the way EU countries and public authorities spend a large part of the €1.9 trillion paid for public procurement every year in Europe.
However, my general guidelines set out below apply to customers in both the public and private sectors.
Rule 1: Understand the tender conditions
A supplier should carefully review the tender documents and fully understand the tender process, including the tender conditions.
This is because a tender response may be automatically rejected by the customer if it fails to comply with the tender process and conditions.
Rule 2: Tender response: “Subject to contract”
Unless it contains suitable qualifications, a tender response may constitute an irrevocable legal ‘offer’ (that is, the supplier cannot walk way from what it has said) capable of acceptance by the customer.
It is also common for customers to incorporate a complete copy of the tenderer’s response as part of the contract.
Accordingly, when the supplier does not intend any legal consequences to flow from the communications it is a good idea for its tender response to contain a general statement that it is submitted “subject to contract / contract denied”.
This allows the supplier to submit its tender response and changes to the draft documents without inadvertently binding itself to the contract.
Rule 3: Reserve right to negotiate
Tender responses should be clear, including an express indication of which parts of the tender (and provisions of any contract the customer has attached to the tender) that the supplier “complies” and “does not comply with”.
The tenderer should also explicitly reserve the right to negotiate the terms and conditions of the proposed contract at dialogue stage if it is down-selected or shortlisted.
Rule 4: Supplier’s representations in tender response
Care needs to be taken to ensure that the supplier’s representations set out in the tender response are factually correct and accurate.
As such, a supplier’s tender response should contain suitable disclaimers and qualifications where necessary. It should also avoid overly effusive expressions, jargon or phrases which they may not be able to justify later or which creates ambiguity.
It is prudent for a supplier to take care when providing technical and pricing descriptions and specifications of its works, goods or services and avoid comparisons to a competitor’s work’s goods or services as any inaccuracy could be viewed as misleading conduct.
Rule 5: Further information required
It is important that the supplier’s tender response clearly state what, if any, additional inputs or information it requires the customer to provide in order for the supplier to provide the goods or services.
Photo credit: Pixabay.com