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Closing time

How to avoid being a late-bid case study


January 3, 2017
by Paul Emanuelli

From the December 2016 print edition

Paul Emanuelli is the general council of the Procurement Law Office.

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should define bid submission protocols, bolster their bid-related recordkeeping and phase out unnecessary and outdated bid submission practices.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:

Define your deadline: Define your bid submission deadlines with split-second precision and be prepared to strictly enforce those deadlines. Leaving unclear the specific point in time when the bid deadline lapses 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 draw you into a protracted legal proceeding.

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.

Bolster your recordkeeping: 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 from late bidders insisting they submitted a timely bid.

Avoid tight timelines: Avoid unreasonably tight bid submission deadlines since this will result in receiving fewer bids, more late bids and more requests to extend 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.

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 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.

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.

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.