Contractors continue to move away from bidding on government projects.
Over the past several years, when I speak at construction conferences, I am told by half the contractors in the room that they do not bid for government work.
They have many different reasons for taking this position, however, it comes down to the perception of how the tender and RFP documents are issued.
Many contractors feel the process is not done in a way that would make them want to take the risk of bidding to municipalities.
Subject to the need to ensure proper qualifications, a municipality should try to encourage prospective contractors and suppliers to bid.
The municipal purchasing operation is not a gatekeeping function. An important role for the purchasing department while a tender for a major capital project is out for bid is to ensure that all prospective bidders understand properly how to go about submitting a qualified bid for the contract.
Incomplete and sloppy bid documents often leave government acquisition officials with no choice but to reject a bid that might very well have been awarded the contract if put together properly. Ultimately, it is the government that pays for these mistakes.
As important as government contracts are to the overall economy, they make up a minority of the total work available to the private sector. The open, competitive system of contract award is a process with which many private sector companies are only barely familiar.
As a result, many bidders make simple mistakes in preparing their bids, not realizing that those mistakes constitute deal-breakers.
Among the most important guides to provide are the following relatively self-evident measures:
• The need for the contractor to follow the directions given for the submission of bids or proposals should be stressed. In the private sector, the negotiation process allows customers and contractors to work through ideas through an exchange of information.
For example, if the customer is initially seeking Brand X widgets, the sales staff from Manufacturer Y has the opportunity to convince the customer that its widgets are a fully compatible substitute for those of Manufacturer X. Generally, it is not possible to undertake such a process of salesmanship within the context of a tender or proposal.
• Contractors and suppliers should be encouraged to confirm that they are providing all required information.
It is vital to read and fully understand the instructions to bidders to make sure that all required information is provided. In some cases, the request for particular information may not be readily apparent. If the information is not provided, the municipality may have little alternative but to reject the bid.
• Governments do make mistakes. Particularly at the municipal level, it is relatively rare for government staff to possess the same kind of subject matter expertise as the supplier’s or contractor’s staff. If the description of the objective in an RFP does not make practical sense, that should be discussed with the municipality before any bid is submitted.
Once again, I would advise that all suppliers and contractors should be encouraged to take advantage of the request for information procedure.
• Bidders should be instructed to seek clarification where the RFP or tender documents are unclear. Some firms believe that any perceived ambiguities in an RFP are left up to their interpretation. This is not the case. Except in extreme cases where some element of bad faith appears to be present, bids must meet the requirements of the tender rules as the municipality understands them.
If the document is ambiguous, most standard form RFP conditions require bidders to seek clarification. If they do not, and they guess wrong, they lose the contract.
Municipalities can also do much to improve their cause by streamlining tender and RFP procedures to produce a more efficient proposal.
Stephen Bauld is a government procurement expert and can be reached at firstname.lastname@example.org. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.