I have said before that some, but by no means all, municipal purchasing bylaws contain extensive sets of rules governing the manner in which the municipality is to conduct tenders and similar contract competitions.
There are inherent risks in the incorporation of provisions of this nature into any purchasing bylaw. If any instructions of this kind are included, it is best that the bylaw make very clear that they are intended as being directive or indicative only, rather than prescriptive.
Instead, b-law provisions of this nature tend to sink to a level of detail that is not desirable in any law for both business and legal reasons. On a business level, giving minute directions constitute micro-management. Almost invariably, they impose an unduly cumbersome process on the conduct of a tender. They prevent or at least deter the municipal staff from responding effectively to the dynamics of the market.
These problems pale, however, in comparison to the legal problems to which such an approach to drafting gives rise. There is an inherent tendency when drawing up instructions as to how something is to be done to specify what is perceived in the abstract to be the optimal manner of conducting the activity in question.
Even where there is something to be said for the description that is provided, no laws should prescribe the idea as the minimum standard that must be attained. Where such an approach is taken, then every deviation from the ideal constitutes a breach of law. Any such breach raises questions about the authority of municipal staff to act, unless they have adhered perfectly to the instructions that have been given.
Perfection would not be a realistic expectation even if every tender were conducted under ideal conditions. In reality, ideal conditions are rarely encountered as is perfect performance. Indeed, deviations from perfection are very often the inevitable result of the fact that real world tenders are not conducted under ideal conditions.
For this reason, laws should not set down a code of perfection. Rather, they should prescribe the minimum standard of acceptability: the point at which even by the rough and tumble standards of free market capitalism, what is going on is just plain unfair or otherwise improper.
Requiring municipal staff to conduct every tender for nuts and bolts in perfect adherence to an ideal set of rules encourages litigation. Unsuccessful suppliers, who naturally resent not getting the business that the call for tenders represented, look to the detailed rules that have been prescribed, to manufacture an arguable legal complaint as to the manner in which the tender was conducted. Courts confirmed with such minutely prescriptive details have little option other than to take the municipal council at its word. The rules set down are not interpreted as a general set of instructions as to what should be done, but as fine-tuned requirements that must be followed to the letter in every case.
Thus, great care needs to be taken by any municipality that includes in its purchasing bylaws minute instructions as to how each aspect of a tender is to be conducted. For those drafting purchasing bylaws, I offer the following guide. Including its amendments, there are 8,882 words in the Constitution of the United States of America. If the draft purchasing bylaw for a municipality has 11,000 words or more, then the drafters of that bylaw have gone very much overboard.
As I have previously mentioned, a true tender is in the nature of an open competition. For many types of contract, a completely open competition is ill-advised, even when bids are being sought to carry out work that has been in minute detail. It would be reasonable to say that the drafting of tender documents requires considerable care.
Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.
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