February 6, 2012

Knowing the bid rules essential for contractor success

Procurement Perspectives | Stephen Bauld

STEPHEN BAULD

columnist

Government buyers make sure they follow the rules that apply when dealing with non-compliant bids. In both tenders and Request for Proposals (RFP), bids or proposals may be accepted only if they are compliant. It follows that the first step in reviewing the bids that have been submitted is to determine whether they are compliant with the terms and conditions of the tender.

Broadly construed, the “compliance” of a bid may be determined by a variety of considerations. These may include: timeliness of submission; correct form of content; possession of necessary licences and permissions; previous experience or training as well as the ability to satisfy mandatory performance specifications.

The determination of compliance is often more difficult in the case of an RFP than a tender, in view of the greater complexity of the submission required. However, compliance problems can arise whenever there are a number of mandatory criteria prescribed by the terms and conditions governing the contract competition.

Contracting authorities will generally seek to reserve the discretion to allow slight imperfections in the form of a bid to be corrected in some method (e.g., through a clarification process; through post-closing completion of qualifications and the like) – although a municipality is not obliged to waive even trivial non-compliance.

For instance, an authority may require that particular types of signs must be “approved for the usage on Ontario highways by the Ministry of Transportation.”

A key question in a given contract competition may be whether that requirement must be satisfied at the time when the contract competition closes or whether it is sufficient at the time when the contract is awarded.

The time at which a bid must be compliant in some particular respect, in order to be eligible for acceptance, turns largely upon the tender documents. Generally, it is sufficient if the requirements are met at the time when the contract is awarded. For instance, if a supplier must possess a given licence in order to perform the requirements of the contract, it is clearly essential that this condition be satisfied at the time when the contract is awarded. However, there are two obvious limitations upon late correction.

First, in virtually all cases, it will be essential that at least some of the requirements of the tender are met at the time when the tender closes, because if they are not, then the integrity of the tender process will necessarily be compromised.

For instance, it is clear that a bidder may not be allowed to deliver its prices for the supply after the opening of bids, because if one bidder were allowed to do so, it would have obvious advantage over everyone else.

Second, in some cases, the nature of the conditions that must be satisfied would seem to determine whether the bid can be made “compliant” after the close of the tender. For instance, if the bids must be submitted by September 30th, it is clearly impossible for late bid submitted on October 3rd to meet the conditions of the tender regarding timelines of submission.

Looking at trivial non-compliant bids, contracting authorities will frequently include language in the request for tender that allows a bid to be accepted even though there is a minor departure from the strict requirements set out in the request for tender. A typical provision is along the following lines:

The city may waive compliance with any minor requirements governing the submission of bids, including (but not limited to) any requirements to: attending any meeting or inspecting any site or thing, provided that in so doing the city shall not unfairly prejudice any other bid.

For a contractor, knowing the rules will give you better chance of not getting disqualified for a non-compliant bid.

Stephen Bauld, Canada’s leading expert on government procurement, is president and CEO of Purchasing Consultants International Inc. He is also the co-author of the Municipal Procurement Handbook, published by LexisNexis Canada. He can be reached at stephenbauld@bell.blackberry.net.

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