For everyone involved in public procurement, two critical lessons need to be learned: learning how to conform to the requirements and restrictions imposed on the procurement process under the law of tender; and learning how to observe for bid-rigging as well as what steps to take once a suspected case of bid-rigging is identified.
In terms of more specific advice, purchasing professionals must do at least the following steps to mitigate the risks:
Buyers need to acquire at least a working knowledge of the law of tender. They need to be familiar with the different methods of public procurement, the circumstances in which each may be used, the types of product and service for which is suited, and the requirements that must be satisfied in order to avoid a risk of legal proceedings.
Buyers need to be familiar with the kinds of misstep that can lead to liability under the law of tender. Client department staff are unlikely to possess such familiarity. Very often, municipal procurement efforts have led to expensive litigation because key decision-makers are simply unaware of what the law requires.
Buyers need to understand the relationship between the rules imposed under municipal purchasing bylaws and policies, and the restrictions that exist on the award of municipal contracts under the tender process.
Never bypass the rules in order to move the process along faster. Most municipalities have policies in place to handle rush purchasing issues and still keep within the rules set out under the governing procurement policy.
Make it a practice to seek advice. Even experts are unwise to guess. It is better to take the time to find out the correct answer.
When scoring an RFP with other people on the project, make sure everyone is using the same set of scoring criteria to apply to the process for every proponent. If the information on which evaluators are relying was not provided in the bid documents, it should not be counted.
Make sure all the bidders have provided the required information. Take the time to read the bids carefully to confirm they have the ability to perform the contract properly.
In relation to bid-rigging, the buyer’s responsibility is more to keep his or her eyes open and to report any suspicious transactions to his or her manager or director, rather than play the role of detective or accuser.
There are serious risks of liability in making unfounded accusations of fraud or near-fraudulent activity, which is essentially what bid-rigging amounts to. For this reason no concern should be taken public unless and until the matter has been properly investigated.
General advice in this area includes the following:
Avoid the risk of becoming an unwitting dupe for a bid-rigging scheme. Watch for specifications that are slanted in favour of one product or contractor. When the client’s draft specifications are written too tightly, and leave out equivalent type products, it is best to go back to the department to get an explanation as to why this product is the only one that can be used. In some cases, there could be a very good reason for the use of this specific item. If a satisfactory explanation is not provided, discuss the issue with the purchasing manager.
Ensure the prequalification documents are fair to all applicants bidding. Prequalification is not intended to exclude qualified bidders. The goal is to attract a reasonable number of qualified bids for every RFP issued.
Be aware of special relationships, such as a relative of a staff member being suggested as the person that has the best product that should be used. It may be the case, but make sure the person declares a conflict of interest and have them removed from the process.
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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