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Procurement Perspectives: Why some contractors don’t bid for government contracts

Journal of Commerce
Procurement Perspectives: Why some contractors don’t bid for government contracts

When speaking at construction events some contractors tell me they are suspicious of the way many government tenders and RFPs are written.
I always ask them why they feel that way and the answers they often give me have some merit. Some of the more common ones I am told often include innovative techniques that maintain the outward appearance of fair competition, yet favour specific contractors.

Some of the examples include specifications that are so vague only the preferred bidder can understand what is wanted. There are an almost limitless number of ways to skew the specifications to favour a preferred bidder.

Instead of all the requirements being set out in one place, they are scattered randomly throughout the document. The form of tender or proposal does not specifically reference all the mandatory information that must be set out to properly bid the work.

This information is then stated in the 95-page RFP documentation, but not always presented clearly.

Also, asking bidders to quote for optional extras, none of which are ranked relative to each other, is a common issue. The argument of this approach is that the municipality requires a facility that meets a specified minimum configuration.

Beyond this limited specification, there are a number of features it would be “nice to have,” if the available funding is sufficient to meet the cost of any one or more of them once the bids are received.

Some of these features are obviously far more expensive than others. If there is insufficient funding to purchase the most desired features, the municipality nevertheless wants the option to purchase the lesser desired options, to the extent that the funding is available. The “priority” of the options therefore cannot be predicted until the bids are received.

The problem with this line of reasoning is the evaluation team often can effectively gerrymander the competition, by cherry-picking features.

I would say the biggest and most common concern among contractors is the perception of weighting the evaluation criteria to favour one supplier over the other.
For example, we can look at a contract to build a library.

ABC Construction Inc. has built three of them. The experience specification for the new library reads “must have built at least three libraries.” ABC also has an in-house interior design department. The specification also includes a requirement for an in-house interior design department.

The lead design consultant has been a practising architect for 35 years. The evaluation criteria say a favourable weighting will be given to a contractor whose design consultant has broad and extensive experience in all aspects of construction.

Not surprisingly, ABC wins the contract.

Short-term submission deadlines are also an issue for contractors who are busy with many other bids and current projects.

A concern with any tender and RFP contest is there is no way of knowing whether someone has been tipped off that the competition was about to start. A party who has a week or two head start can put together a much better bid. By making the deadline very short, no one else has a clear chance. The outward appearance is that the municipality is acting quickly to cover off a critical need.

As a previous purchasing manager for a very large municipality, I can assure everyone this is not the case in most government agencies.

Could these rumours of rigging bids be true in the past in rare cases? There must be some truth to these accusations for so many contractors to be dissuaded from bidding for municipal contracts.

I would suggest to contractors if they feel a tender or RFP is worded in a one-sided way to favour one contractor, they bring it to the attention of the owner before the bid closes.

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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