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Procurement Perspectives: Caution needed when addressing bid repair

Stephen Bauld
Procurement Perspectives: Caution needed when addressing bid repair

The area of bid repair and minor irregularities on municipal contracts often creates confusion for bidders.

Quite frequently during the evaluation of the proposals that have been submitted in relation to an RFP, ambiguities and gaps will be noted in one or more (and sometimes all) of the proposals submitted. The legal risks associated with bid repair and the correction of minor irregularities has always been a concern. In the United States, the Federal Acquisition Regulation provides that a defect or variation is immaterial when the effect on price, quantity or delivery is negligible when contrasted with the total cost or scope of the supplies or services being acquired.

This will not likely be correct under Canadian law of tender — although it is difficult to see why a negligible effect on price should be taken into account, where that effect does not alter relative ranking of the bid to other bids received.

Examples of minor informalities or irregularities include failure of a bidder to:

  • submit the correct number of original signed copies of a bid as requested by the terms and conditions, provided there is at least one copy;
  • submit sufficient duplicate copies;
  • furnish all requested information concerning its key employees, provided those individuals are identified as specified in the terms and conditions;
  • acknowledge receipt of an addendum, provided that the bid as received clearly includes that the bidder did receive and act upon that addendum (e.g., where the addendum is mentioned in the bid, or the addendum added another item to the required content of the bid and that additional item is included in the bid received); and
  • correct any other deficiency in a bid that has no effect on price, quantity, quality or delivery of the bid as submitted.

An evaluation committee will often ask whether it is possible to inquire of the proponent concerned, so as to eliminate these uncertainties in relation to the proponent in question. Any effort to seek such clarification is bound to be sensitive, because it smacks very nearly of negotiation. A clarification will often lead to what is in effect a modification. Allowing a bidder to clarify its bid can give that bidder an "unfair" advantage, if the bidder is astute enough to realize that its existing bid is not likely to be accepted.

That bidder thus gets an opportunity to modify its price, while other bidders do not. However, even recognizing the seriousness of concerns, some method of clarification is almost certain to be necessary to deal with unusual cases. As I have stated before, the tender process is not a game. It is a serious business, the primary purpose of which is to secure to municipalities suitable sources of supply. The rules must be sufficiently flexible to protect their interest. Therefore, the bidding instructions should:

expressly disclose that the municipality may, if it so chooses, clarify the terms of any bid (the right to do so should clearly be left in the municipality’s discretion; the obligation to provide a clear bid should be placed on the bidder; it is not appropriate for the municipality to take upon itself the obligation to inquire as to what the bidder intended);

set out the procedure for obtaining such clarification, including the restrictions that apply to the process; and

provide training for buyers as to how to deal with obtaining clarification.

Even with these protections in place, great care must be taken. As a general rule, the submission of any new information that enhances a bid after the bid closing date constitutes what is known as "bid repair". Allowing the repair of a defective bid generally is illegal in Canada in view of the obvious risk that the supplier who is allowed to make that repair will have an unfair advantage over other proponents.

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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