I have always had concerns over the various ways that the addendum process is conducted.
This goes for both the municipalities, as well as contractors dealing with subcontractors. Given the potential liability for inaccurate specifications or test and survey results, it is not surprising to find that many purchasing authorities reserve to themselves a right to amend guidelines, plans, specifications and other relevant rules and aspects of the bid at any time up until the close of tenders. A typical provision in the terms of tender will read:
The City reserves the right at any time prior to the award of the contract:
To withdraw or Cancel the Tender;
To extend the time for the submission of Bids;
To modify these Instructions, the Tender Notice, the Form of Tender, the Specifications, the Special Provisions, or the Description of the Project, Work or Supply; or
To change the project or contract documents; by the publication of an addendum or other notice, shall be liable for any expense, cost, loss or damage incurred or suffered by any bidder (or any other person) as a result of its so doing.
Some municipalities also reserve the right to resubmit a proposed contract for tender, where an error is discovered after the opening of tenders but before a contract for the substantive work is concluded. Provided such reserved rights have been properly disclosed, there would seem to be no problem in a contracting authority relying upon them. However, even where such rights exist, they do not open the door to unfair practice.
Most municipalities and other contracting authorities also include in their terms and conditions an express procedure under which prospective bidders are given an opportunity to submit queries with respect to a tender or RFP, which is sometimes described as a Request for Information of Bid Consultation.
After the opening of the bids, it is not permissible for a contracting authority to depart from the original tender requirements, and negotiate substantial changes to the specifications with one bidder, without giving all bidders the chance to revise their bids, in order to take those changes into account. Even where a privilege clause applies giving a right to decline all tenders, the contracting authority’s options are limited: it may reject all, or accept the lowest compliant tender, but it may not award some alternative contract to one of the bidders who replied in response to the request for the original work.
I should also mention that, in my opinion, it is never a good idea to use post tender addendums. Any time I have ever seen post tender addendums issued, I would suggest that you are asking for some sort of legal action to follow. I would strongly recommend not issuing any sort of changes to the bid after the tenders have been opened and the numbers are public knowledge.
Having said that, most municipalities require addenda to be in writing and many also require all questions relating to a tender be directed to a "designated buyer" (generally specified in the request for tender). There are clear advantages to both of these requirements. They allow a proper record to be maintained of all communication. They also facilitate the process of ensuring that all bidders receive comparable information. Nevertheless, a contracting authority may find that representations made by one of its officers or other agents bar it from insisting upon strict adherence to the terms of the tender documents.
The bottom line when it comes to addendums is that you must always try to be fair, open, and transparent when you use this process. The rules are applied differently when it comes to private and public sector procurement but the principals of being fair to both parties always apply.
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.
Recent Comments
comments for this post are closed