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Procurement Perspectives: Bid imperfections have a clarification process

Stephen Bauld
Procurement Perspectives: Bid imperfections have a clarification process

I am constantly asked about the process that is acceptable when contractors submit bids with imperfections, including late bids.

As a rule, contracting authorities will generally seek to reserve the discretion to allow slight imperfections in the form of a bid to be corrected in some method (i.e., through a clarification process; through post-closing completion of qualifications and the like). Although a municipality is not obliged to waive even trivial non-compliance.

The time at which a bid must be compliant, in some particular respect in order to be eligible for acceptance, turns upon the tender documents. Generally, it is sufficient if the requirements are met at the time when the contract is awarded. For instance, if a supplier must possess a given license in order to perform the requirements of the contract, it is clearly essential that this condition be satisfied at the time when the contract is awarded. However, there are two obvious limitations upon late correction.

First, in virtually all cases it will be essential that at least some of the requirements of the tender are met at the time when the tender closes, because if they are not, then the integrity of the tender process will necessarily be compromised. For instance, it is clear that a bidder may not be allowed to deliver its prices for the supply after the opening of bids, because if one bidder were allowed to do so, it would have an obvious advantage over everyone else.

Second, in some cases, the nature of the condition that must be satisfied would seem to determine whether the bid can be made “compliant” after the close of the tender. As an example, if bids must be submitted by Sept. 30, it is clearly impossible for a late bid submitted on Oct. 3 to meet the conditions of the tender regarding timeliness of submission. This, however, is not the end of the story.

Another common area of difficulty is with respect to bids that are submitted moments after the stipulated deadline. For example, where the tender is stated to be open until 11 a.m. local time, what should be done where the bid is received a few seconds after the stipulated time?

In grappling with this problem, courts have tended to place what many would consider to be emphasis on minor variations in wording in the terms and conditions governing the tender.

For instance, in the Bradscot (MCL) Ltd. V. Hamilton-Wentworth Catholic School Board, the court allowed a bid that was filed 30 seconds after the hour commenced, concluding that when bids were required to be submitted by a particular minute, bids were not overdue until the end of the minute stipulated (i.e., when the hand moved off the :00 position to the :01 position).

In contrast in Smith Bros. & Wilson (B.C.) Ltd. V British Columbia Hydro and Power Authority, the court concluded that where the competition was stated to be open until 11 a.m., by implication, this meant that bids would be received “not later than” 11 a.m., so that the commencement of the minute brought the bid submission period to a close.

The approach taken in these cases might be considered arbitrary. However, if one rejects such a semantic approach, the question then becomes how to apply the time limits of the tender. Late bids may be especially detrimental to the competitive bid process.

Many contracting authorities make it a practice to open bids publicly immediately after the close of a tender or RFP, and to read out prices. Although the chances of unfairness are limited, where a bid is submitted within seconds of the time of closing, a bid submitted as little as several minutes after closing may easily have been adjusted to reflect the lowest bid.

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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