I just attended a meeting with several construction associations. One of the many concerns was the time it takes for a municipality to get back to the contractors when announcing the winning bid.
A tender, for example, is a time-limited competition. The original call for tenders will invariably specify a date by which bids must be submitted.
Usually bids are binding for a specified period after that date (for example 60 days) after which they lapse.
It is crucial to permit sufficient time before closing and the lapse of the binding period to allow the qualifications of the successful bidder to be verified (e.g. insurance to be confirmed in place). During that period, the second lowest bid is held open with the bidders’ bid security being retained until the first contract is firmed up.
Long delays between bid openings and contract award are not advisable as they tie up each bidder’s bonding credit and therefore increase the price. Far too often the 60 days runs out and the municipality then cancels the tender.
This approach makes it difficult for contractors to balance the workload for the season when they are the winning bidder and then the tender does not get awarded.
There is still a preference for public bid openings, although this is obviously not practical in some cases. Section (20) of Schedule C to the Oakville, Ont. Purchasing By-law No. 2006-86 provided that: "Tenders shall be opened at a public meeting at a time and location specified in the tender documents."
Usually bidders are represented at the meeting. One reason why bidders attend is to make sure that no late bid is accepted.
The concern is not so much with bids that arrive momentarily late, it’s with respect to the possibility that bids will be opened, with the lowest bid then being "shopped" to some other supplier.
Thus Clause (20)(f) of Oakville’s C Schedule reads: "The agent shall announce for each contract the contract number, the contract description, the name of the bidder, and the total amount of the tender, and shall prepare a list thereof. Any description as to acceptance or rejection of bids due to irregularities will not be made until a review has been conducted, and bidders will be instructed not to conclude any particular award results from the opening itself."
This is fine in principle, however, in many municipalities far too many bids are left to sit past the 60-day period and then just cancelled. This practice happens too often and leaves the contractors that were the low bidder in a bad situation.
Should a contractor have won three or four large bids and feel that they do not need to bid for further work that season, and all four bids get cancelled, this would have a devastating result on the contractor going forward that year keeping everyone working. Some municipalities need to do a far better job in making sure they do what is required to get these tenders issued in the 60-day period.
In a true tender, the contract is awarded to the lowest priced qualified bid. In a Request for Proposal (RFP), the contract is awarded to the highest evaluated qualified bid with the lowest price being given a relevant weighting in the overall score.
It is generally not possible to attempt any kind of evaluation at an RFP opening, so there is little point served in reading out bid prices at the opening, other than it does prevent the modification of the bid price at a later time.
In my opinion, as well as the contractors, this is one area that needs to be greatly improved.
When contractors put forth an effort to complete tender documents, municipalities should make a better effort to issue them.
Stephen Bauld is a government procurement expert and can be reached at email@example.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.