Procurement
December 15, 2014

If it’s broken – fix it!

Last month I supported the argument that if a received bid does not comply with some minor aspect of a call for bids, but the non-compliance will not put either the procurement or the resulting contract at risk, the bid should be accepted and the bidder given time to “fix” the problem.

To emphasize to potential bidders the seriousness of your administrative requirements and clearly discourage sloppy bid preparation, include in your point-rated evaluation criteria a penalty of X points for each “fix” you make.

Work quickly. Correcting a minor omission must not let the bidder repair the bid by providing information that was not available in the initial bid: you are only looking for material that the bidder already had when it submitted its bid. With modern communications it is quite reasonable to give the bidder 24 hours – at most 48 – to fix the problem: “send it by e-mail, fax, or courier – just get it here now.”

A bid with no information on a particular topic is not trivial, and allowing the bidder to provide additional information after bid closing would be an unaccountable repair. If, though, the problem was the CVs and the number of copies described in my previous column, as long as at least one copy of the required CVs was in the bid, getting copies later (to me) poses no issue.

What about the items raised by my colleague: bid bonds, insurance, or conflict of interest declarations? They represent broader issues and decisions.

Bid bonds are required when the buyer wants to make sure that the apparent winning bidder will actually enter into contract: that is, they are required because of a substantive need. If you give the bidder time to “fix” an omission, you also give that supplier the chance to not provide the bond and fall out of the competition, which defeats the purpose. This places bid bonds squarely as a mandatory: if no bond, reject.

Insurance requirements may be different, because the buyer must decide whether proof of insurance is really needed at time of bid or when the contract is about to be awarded. Meeting an insurance or similar requirement may cost a bidder money which is only recouped if the contract is won, so if you wait to get proof of “whatever” until you are ready to award, you may save bidders money and perhaps encourage more suppliers to bid. Make sure to be clear on this in the call for bids. On the other hand, if on due consideration the context and requirements of a particular procurement do require proof of insurance from all bidders, then the requirement is substantive and mandatory: if no proof, reject.

Conflict of interest and other declarations move into the field of “when is enough, enough?” It is not unusual to see calls for bids that require a bidder to sign multiple such declarations or face rejection. In my previous article I said that one of the two core administrative requirements is that the bidder must sign its bid or be rejected. When a supplier does sign, it is usually (and should be always) formally confirming that it has read the call for bids in its entirety, and agrees to be bound by the requirements, terms and conditions therein.

So if the call for bids specifies that the bidder must not be in a conflict of interest situation, and a supplier does so affirm by signing its bid, what is the additional value of requiring that the bidder also to sign a specific conflict of interest declaration? And what is the downside of accepting a properly signed bid without the signed declaration and giving the bidder a day or two to provide it?

In suggesting that, some of what are today administrative Instruction to Bidder requirements should be made mandatory, I may appear to fly in the face of the direction given in many jurisdictions that the number of mandatory requirements should be kept to a minimum. The key here is the quality of the mandatories. They have to include topics that have been identified as clearly essential to the procurement, and not requirements that would unfairly and unreasonably exclude qualified suppliers.

If you can run a procurement with only a handful of mandatories (or even none), good for you. If it takes more, keeping mandatories to a minimum means the minimum needed to ensure the success of your procurement and the resulting contract.

Keep in mind, if you make mandatory a university degree (excluding honourary), you exclude Bill Gates.

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