In Part 4 of Cotney Canada’s series on the procurement and tendering process, we take a look at final four items to be aware of before an RFP opportunity is evaluated and a response is prepared, which we will examine in more detail in Part 5.
Specific Rules and Restrictions
Depending on the particular procurement, the RFP may include provisions that specifically seek to limit the owner’s obligations arising from Contract A or from a flawed tender process. For example, these provisions, such as privilege clauses or limitations of liability, may specify that no representation is made as to the accuracy or completeness of any data in the RFP and that the bidder has the onus of verifying such data. The RFP may also provide that the bidder is not entitled to compensation from the owner for any time, effort, or expense in preparing its bid. Furthermore, the owner usually reserves its right:
- Not to award any contract at all;
- Not to award the contract necessarily to the lowest-priced bidder (but rather to the bidder offering the “best value”);
- To conduct negotiations with one or more bidders in the event that the negotiations with the first bidder are unsuccessful;
- To conduct a survey of potential bidders to obtain clarification of their proposals as part of the evaluation process;
- To cancel and reissue the RFP; and
- To extend any deadlines and amend the procurement process.
While such clauses are typically stated quite broadly in RFPs, they do have limits. The Supreme Court of Canada has held that those who issue tenders for construction work with the clause that “the lowest or any tender shall not necessarily be accepted”, cannot use it to accept a non-compliant bid over compliant bids. This does not mean one should not place close attention to the RFP and its terms, as this is crucial to a successful procurement.
The RFP may also specify the technical qualifications required of prospective bidders. These are often a confirmation of the qualifications outlined in the RFQ relating, generally, to the same provisions: financial history, managerial experience, claims history, and workplace and safety compliance. Depending on the type of procurement and the goods and services to be supplied, there may also be regulatory qualifications. These could include requirements to hold certain licenses or that relate to safety and security clearances for the bidder’s premises or personnel.
If it is anticipated that the bidder will be a consortium, then the RFP may require an executed copy of the bidder’s joint venture agreement. Such an agreement will specify the establishment and mandate of the consortium; how the business of the joint venture will be structured, managed, and financed; and who will be the bidder’s key contact with the owner. The owner may require financial information, shareholder status and other relevant information from consortium members.
Developing a Short List
The owner may want to reduce the number of bidders at either the RFQ or the RFP stage. The advantage to the owner is generally that a shorter list of bidders means that those left are more likely to invest more time and money into their bids because the chance of success goes up with fewer bidders.
During the RFP process, a short list of successful bids allows the owner, who will select a preferred bidder, to have an alternate on hand should a satisfactory contract not be reached with the first bidder. Having an alternate may also make the first-place bidder more amenable to an owner’s desire for better pricing or creative “value-engineering”.
However, the short-list process is usually used only on large-scale contracts. In most circumstances, the owner and winning bidder go straight to the contract finalization phase after the owner has evaluated the bids.
Written by Jeremy Power, a lawyer in our Toronto office
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.