One of the biggest problems with municipal procurement documents is a direct result of writing confusing and complex language.
As we all know, there are many reasons why things go wrong. One of the most important is the problem of poorly conducted transactions by lawyers. Read through any book on contract law, and the surprising thing to discover is that the same kind of disputes seem to get litigated over and over again.
The reason why this is true may perhaps be traced back to the approach taken in legal education: when lawyers study contract law, they do not study the kind of disputes that are likely to arise and how to deal with them. Instead, they study how to make (and then how to attack) a binding contract. In the end, clients suffer from this misdirected focus.
A variant of the same problem arises where the client is guilty of over delegation, as a result of which the lawyer goes off on a frolic of his or her own. Many clients do not seem to understand that their relationship with their lawyer is not expected to be one of passive acceptance. Lawyers need to be properly instructed by a client in order to draft contract documentation properly. Clients should provide clear instructions as to the underlying business purpose of the transaction — what the client hopes to achieve by entering into it. There should also be clear instructions as to the risks that the client cannot afford to assume, and the "upset price" beyond which the client cannot pay.
The client should instruct the lawyer as to whether the client is bottom line focused, or wishes to enter into a secure contract that carries with it a high expectation of proper performance. Each one of these choices influences the terms in which the contract should be drafted. Since each client is unique in terms of his or her level of risk aversion, the lawyer should inquire even if the client is silent.
When a lawyer instructs a client, it is wise to remember that lawyers as a class tend to be more risk adverse than most business people or governments. Lawyers are trained in the law. They do not necessarily know anything about business or public administration — although senior lawyers may well have acquired a good deal of understanding concerning these subjects over the years, if only by way of osmosis. Clients need to read the draft documents that their lawyers present to them with a critical eye.
The goal of this review is not to catch the lawyer in a mistake, but rather to confirm that the documents that have been produced conform to the business realities of the transaction, as well as the expectations and tolerances of the parties.
Contract documents that are incomplete, difficult to understand or ambiguous are likely to lead to a dispute. Departing from the norms of good writing also tends to produce a document that is confusing. For instance, the use of inconsistent terminology (using different words to describe the same thing, or the same word to describe two different things) will confuse contractors. Long, poorly structured sentences and the use of too much government jargon can add further confusion. Disorganized documentation is another source of difficulty. Common problems include scattering related information throughout the documents without making the linkages between various parts of the document clear and incorporating key terms of the supply arrangement into the proposed "contract" that will be entered after the successful bidder is selected.
Bidders need a fair opportunity to identify what the customer is seeking to buy. Failing to do so may undermine the "bullet proofing" that a municipality tried to build into its contracts through the inclusion of carefully worded provisions.
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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