The final step in the process of gathering information from bidders is the RFP and is the key document in the procurement process. It outlines the scope of the project in detail, provides evaluation criteria for selecting a successful bidder, typically including a points system; outlines the business and legal issues in the project; provides, if appropriate, the draft contract to be signed by the successful bidder; and will provide the rules of the selection process. A well-structured and well-organized RFP ensures that the procurement process is clear, accurate and fair to all bidders. It provides an efficient and effective tool for communicating to multiple potential suppliers all at one time. It will also answer many of the potential bidders’ questions and reduce the amount of administrative time the owner is required to devote to answering such questions.
Understanding the rights and obligations arising from an RFP can be crucial, as its terms will govern the legal relationship between the owner and the bidders until and unless the subsequent contract for the construction of the project is finalized. Legally speaking, it is owner’s draft of Contract A. Part 3 and later Part 4 of our series on procurement and tendering therefore outline the key legal and business issues surrounding the RFP.
Delivery and Timing of RFP Response
An important aspect of any RFP is setting out the terms and conditions for the bid procedure. This includes the delivery requirements, such as the time for deliver of the response, the address for delivery, the number of copies, the language of the response and any other special delivery details. One of the fundamental principles for any RFP is the requirement that the bid be submitted on or before a specified time. The RFP should contain an express provision that any bid delivered after that time is disqualified and will be returned unopened. Many RFPs also contain a provision that prevents bidders from forwarding supplementary material for consideration after the deadline or supplementary material for consideration after the deadline. The acceptance by the owner of a bid that has missed the deadline or supplementary material can lead to a dispute and a potential legal wrangle. In addition, the receipt of supplementary material also interferes with the timeliness of the procurement process, since the supplementary material would then have to be evaluated and that bid reassessed. An RFP should also have a provision indicating how long a bidder’s offer must remain outstanding for consideration by the owner. The RFP also usually contains a timetable that the owner hopes to follow in the procurement process. There is no “standard” timetable so this should be negotiated carefully.
The RFP should also specify the prescribed format for the response, such as whether the bid may be submitted electronically and, if large numbers of copies are required, the designation of a “master copy”, which would be deemed the “official” bid proposal. In designing the prescribed format for the response, the owner should attempt to solicit bids that may be easily compared and evaluated. It may also provide template forms to bidders to assist in ensuring a more uniform and, therefore, a more easily assessed response from bidders.
Written by Jeremy Power, a lawyer in our Toronto office. This article is not legal advice and should not be construed as such.