The reasoning behind a municipality using a tender or an RFP in the procurement of construction has a common matrix.
The most important question to ask when deciding whether or not a tender is appropriate is this: Is it clear exactly what the contracting authority wishes to buy?
If not, then another option should be considered, which allows a more fulsome comparison of the various goods and services on offer as well as the competing merit of the suppliers of those goods and services.
In general, this role is played by the RFP.
When you ask most purchasing managers, a request for tender is used when they know what they want to buy. They use an RFP when they think they know what to buy and they use a request for information when they have no idea what they want to buy.
Nevertheless, in recent years, a tendency has emerged to publish requests for public competition which embody a mixture of the elements of each form of competition so that these distinctions have begun to blur.
As one moves away from the pure tender into the realm of the RFP, the determination of the best acceptable offer by reference to objective, quantifiable criteria becomes more difficult.
At some point the valuation mechanism becomes so highly subjective it is impossible to construct a scheme of enforceable rights based upon the RFP process.
The exact point at which this occurs is often obscure, with the result that disputes are likely to arise, which are frequently followed by litigation.
It is an implied term resulting from the use of the tendering process that all bidders will be treated fairly and equally. This standard is easily applied in the tender context, in which decision-making is guided by one primary concern, namely price.
It is far harder to apply when dealing with other forms of procurement. In an RFP, the range of non-price considerations may be quite wide and can include such subjective factors as perceptions of competence in a given field and even personal attributes such as whether a particular contractor or its staff is considered trustworthy.
Frequently, an RFP will call for the contracting authority to exercise a considerable degree of skill and discretion in the award of the contract.
Provided the criteria of assessment that are employed are those which are specified under the terms of the RFP documentation, there is little problem.
However, despite these features of the RFP, there are many cases in which at least some aspect of the right to receive fair treatment have been imported into RFPs in the law of tender.
The scope of these rights must obviously be modified to suit the specific terms of the RFP, including the discretionary elements of evaluation and the wide range of criteria that may be employed in evaluation.
To the extent that a municipality has reserved a discretion to conduct a subjective evaluation, that discretion should be respected by the courts.
Nevertheless, it is clearly not open to a contracting authority to introduce new evaluation criteria after the RFP has closed, nor to consider non-compliant proposals or bids received from non-qualified proponents.
It is not open for the contracting authority to adopt any personal, subjective method of assessment in place of the appropriate criteria and weighting contemplated in the documentation.
While the purpose of an RFP is to move the final decision away from pure consideration of price towards more complicated determinants, it does not follow that the law of tender has no application at all.
There is no presumption that an RFP will necessarily take the form of a mere investigation, and there is little question that a properly worded RFP may give rise to tender contract rights.
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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