I had an opportunity to spend time talking to several companies that attended the recent TCA (Toronto Construction Association) Members Day.
Sadly, many of them advised me that they no longer bid for municipal tenders, or any government work at all. The general feeling is that it is just too much work, with very little return on investment due to poorly written documents. "It is much easier to get work in the private sector" was the general approach from the vast majority of people I talked with during the day.
It was difficult for me to argue that point and convince industry partners to take another look at bidding government work. I still strongly believe in the governments continued efforts to try to improve the present day systems related to process. Writing suitable documents is an exercise in sound business practice that requires common sense. The use of precedents is important in making sure that every "I" is dotted and "T" is crossed, as are carefully crafted provisions that protect the municipality from lawsuit.
On the other hand, there is no benefit in crossing every "I" and dotting every "T", if you don’t receive any bids, or enough to create a value for money proposition. It is also equally important to ensure that documents used are not drafted in a way that results in an unnecessary increase in the cost of supply. My feeling is that this is one of the biggest problems with the process.
There are two basic steps that any municipality could take to avoid some of the problems that I discussed during my panel conversations on Members Day. I had several concerns about the way procurement documents are drafted and tried not to be too critical of the present process.
First, have the documents been read by an informed person, (one that knows about construction and the government procurement process) who was not involved in drafting them.
If he (or she) finds them difficult to read, then they need to be revised.
If he (or she) cannot follow them, then there is a serious problem.
Second, before any document is issued, the purchasing manager should ask himself, "If I was the contractor, would I sign this contract?" If the answer is no, and it often is, then the contract is too one-sided.
I also mentioned during my answers to the panel questions that I was once the purchasing manager at a large city.
For those that haven’t walked a mile in those shoes, it is a difficult job with many long days just trying to defend the policies and procedures set down in bylaws from council. We often complain about municipal staff when things go wrong, but must understand you always have two sides to a story.
From the contractor perspective, a client who fails to review a proposed contract with its lawyer before signing it is inviting problems once the contract is signed. The general rule is that signed, written contract documents are determinative of the rights and obligations of the parties.
While there are a number of exceptions to the rule, it nevertheless remains an important threat to any party entering into a contract where he or she is not firmly convinced that the language of the documents reflects the original business intent. Accordingly, it is vital for each contract party to clarify any uncertainties before the contract is signed. In other words, always ask first and sign later.
For those companies that have given up on bidding for government projects, I would strongly urge you to give the municipalities a second chance. I will continue to stand by my statement that if you know how to fill out the government RFP documents, you have a great chance of getting the work.
Stephen Bauld is a government procurement expert and can be reached at email@example.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.