Choosing a tender

In order to resolve any mistakes or qualifications in tenders it is often necessary to hold a discussion with one or two of the tenderers. Such discussion must only take place with the knowledge of the employer, and in accordance with any restrictions set by him. At this stage there is a strong possibility that tenderers will know the prices quoted by at least some others, so the negotiator must be alert to any attempt by a tenderer to adjust his price, so as to become the lowest or, if he is already the lowest, to reduce the gap between himself and the next lowest. A contractor has admitted that ‘It is always a great advantage to have the opportunity of taking a second look at one’s tender when discussing it with a client.’
There has been a growing demand that tenders should be assessed on the basis of quality as well as price. Any quality criteria to be applied must be stated in the documents. Quality assessment is of major importance under design and construct contracts where the contractor has control of design, the materials supplied, and the workmanship. For such contracts the parties should endeavour to agree all significant design matters prior to award. For constructiononly contracts the quality of the permanent works is already defined in the drawings and specification accompanying the tender documents, so it is the contractor’s prospective performance that remains to be judged. This cannot be defined in measurable terms, hence the need for pre-qualification or similar assessment of tenderers.
The final assessment of tenders must, of course, take into account any rules set out in the tender documents. The EC Directives, for instance, require the methods of comparing tenders to be described in the documents, and they must be adhered to. Failure to do so could entitle a disappointed tenderer to challenge the award of contract to another and claim compensation for the lost opportunity.
Having made all necessary comparisons of tenders, a decision must be made as to which tender should be recommended for acceptance, if the employer requires this. Once tenders have been compared on a uniform basis and all non-conformities and queries have been resolved, the question must be asked: is there any cogent reason for not recommending the lowest ranked tenderer by price? Any reason put forward for this must be a real reason, such as clear evidence of a tenderer’s financial problems or his lack of experience in some essential operation required under the contract. The report on tenders must be careful to present a balanced view, and not over or understate the case for any tenderer. It is important not to ‘mix fact with opinion’. The facts or evidence should form one statement; any comment thereon should form a separate statement. Supporting information such as bankers’ reports or references should be appended to the report. These problems of reportage are more likely to occur with open tendering. Under selective tendering, the competence of tenderers will already have been approved, so it is almost axiomatic that the lowest unqualified offer will be favoured.