Contract Law - Tender/RFP Presentation

Question 1

What is Tender and RFP Law?

Answer 1

The law governing the competitive bidding processes

Question 2

What is the challenge with tender/RFP law?

Answer 2

It is constantly developing which creates uncertainty

Question 3

What is a Tender?

Answer 3

A competitive selection process that:
- replaces negotiation
- specifies the scope of work and contract terms
- seeks an irrevocable bid
- provides bid security

Question 4

What 3 things does the formation of a contract require?

Answer 4

• offer and acceptance
• consideration (i.e. exchange of promises)
• certainty as to essential terms (i.e. price)

Question 5

What did the Ron Engineering Case bring into existence?

Answer 5

Contract A and B theory

Question 6

What is Contract A

Answer 6

Where:
- Tender documents are sent out (Offer)
- Bids are received (Acceptance)

Contract A means Bid Contracts

Question 7

What is Contract B?

Answer 7

The awarding of the work to the winning entity from the bid selection (Construction Contract)

Question 8

When does Contract A arise?

Answer 8

With each bidder when bid is submitted (Only if bid is compliant!)

Question 9

What are the obligations of the owner in the bid process?

Answer 9

• Competition replaces negotiation
• Duty to follow express terms of Contract A
• Duty not to accept non-compliant bid
• Duty to treat all bidders fairly and equally

Question 10

What is the Duty of Fairness?

Answer 10

• Implied terms of Contract A that owner will treat all bidders fairly
• Don’t allow unfair advantages
• No hidden preferences
• Owner can reserve rights and priviliges

Question 11

What is the Privilege Clause?

Answer 11

• Reserves owner the right to not accept lowest or any bid
• Cannot use to accept non-compliant bid
• Allows nuanced approach to awarding bid

Question 12

What is the Discretion Clause?

Answer 12

• Reserves right of owner to waive minor irregularities and defects in bid
• Does not prevent later court review
• Does not allow owner to accept a materially non-compliant bid

Question 13

What is a Limitation/Exclusion of Damages Clause?

Answer 13

Clause in a contract which appears to exclude or restrict a liability or a legal duty which would otherwise arise

Question 14

What is the difference between a Tender and RFP?

Answer 14

Tender:
- invites a price for a detailed scope of work and a settled form of contract

RFP:
- invites proposals with varying solutions/scope and negotiation of a contract

Question 15

Does Contract A arise from RFP?

Answer 15

Depends on language of RFP

• Statement as to whether it is or is not a tender call
• Commitment to build
• Compliance with specifications a condition
• Duty to award
• Extent of right to negotiate Contract B?

Important for parties to clearly state whether they intend or not to contract

Question 16

What are 5 things to manage risk when putting out a bid?

Answer 16

• What kind of process you want (competition or negotiation)
• Issue clear and fair documents
• Reserve privileges
• Follow rules carefully and be fair
• Recommend owner get legal advice on compliance