This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
The ever-tightening timeframes of the tendering cycle are putting increasing pressure on the bid submission process. To avoid becoming the next late-bid case study, purchasing institutions should accurately define their bid submission protocols, bolster their bid-related record-keeping, and phase out unnecessary and outdated bid submission practices. The following seven due diligence measures will help purchasing institutions avoid the pitfalls of closing time:
1. Define Your Deadline
Define your bid submission deadlines with split-second precision and be prepared to strictly enforce those deadlines. Leaving the specific point in time when the bid deadline lapses unclear sets you up for avoidable bid challenges. Furthermore, changing your bid submission procedures midstream inevitably increases the risk of confusion, error, and subsequent bid challenges. Avoid the temptation to help a bidder who is running late with improvised procedures since this could easily draw you into a protracted legal proceeding.
2. Define Your Location
Define your bid submission location with precision. To avoid confusion in your solicitation, avoid intermingling the delivery address for the required goods or services with the delivery address for the bids. To further mitigate this risk, avoid using bid submission locations that are difficult to find since couriers are notoriously prone to delivering to the wrong place. Try to locate your bid submission office as close to your front doors as possible.
3. Bolster Your Record-Keeping
To guard against improper disqualifications and bolster the defensibility of bid rejection decisions, ensure that you have accurate procedures for recording when bids were submitted. Having an accurate record-keeping regime reduces the risk of improperly rejecting valid bids and helps avoid protracted legal proceedings launched by late bidders who insist that they submitted a timely bid.
4. Avoid Tight Timelines
Avoid unreasonably tight bid submission deadlines since this will result in receiving fewer overall bids, more late bids, and more requests to extend your deadlines. Furthermore, overly tight timeframes can stifle competition and put your institution at risk of breaching its open tendering duties. When setting your bid submission deadlines, be mindful of the complexities of the pre-bid question and answer process. Leave your organization sufficient time to properly respond to questions, and leave bidders sufficient time to factor your responses into their bids.
5. Avoid Mandatory Meetings
Avoid creating unnecessary mandatory pre-bid meetings and site visits since a bidder’s failure to attend a mandatory meeting creates the same compliance issues seen in late bid disputes. Furthermore, if only one bidder attends your mandatory pre-bid meeting, this can result in a catch-22 situation since that bidder will know that it has no competition when it is preparing its price. Unless a pre-bid meeting is essential to your bidding process, make your pre-bid disclosures through documented processes rather than in-person meetings.
6. Avoid Public Openings
Avoid public openings since they help facilitate bid-rigging, collusion, and other bid manipulation practices. Furthermore, public openings increase the risk of bid disputes since bidders who attend public openings are often looking for any minor technicality to serve as a basis for a legal challenge to try to get their competitors disqualified from the competition. While public openings were historically conducted to increase transparency in the tendering process, in modern times those transparency requirements can be better met through widely available electronic bid submission technologies.
7. Use Electronic Bid Submission
Replace your outdated bid submission procedures, such as paper-based bid submissions, fax submissions, and email submissions, with more robust electronic bid submission platforms. Effective, low-cost electronic bid submission technologies are so widespread in the procurement industry that there are no excuses for remaining hardbound to paper-based bidding or continuing to use outdated procedures that rely on fax or email technologies.
Purchasing institutions should find the time to implement these measures within the next year if they are serious about reducing the risk of bid submission disputes and increasing the level of competition in their tendering processes.