Network of Procurement ProfessionalsFriday 13 November 2015

“Capturing a Tender Offer in the Contract”

Brett Kahland, Senior Commercial & Contracts SpecialistMerryn Cossey, Team Leader Procurement & Contract Management

Adelaide City Council

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Presentation Outline

How can a tender offer be captured in a contract? How can Council ensure that it gets what was offered?

Adelaide City Council’s processes:

Planning is key – it starts with a robust procurement process

It continues with a robust evaluation process It further continues with robust contract management

Recent experiences – you can still get caught!

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Procurement Process

Preparation prior to approaching the market is fundamental

Specifications – detailed, clear and complete Evaluation Panel – relevant experience with market

knowledge and understanding Tender Period – give sufficient time Evaluation Criteria & Weightings – must be relevant Price – consider what to ask for and how best to

evaluate Tender Response Schedules – non-conformances

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Evaluation Process

The Procurement & Contract Management team aims to ensure that evaluation processes are conducted with rigour

All tender offers are carefully evaluated Do the Tenderers understand what the Council wants? Does the preferred Tenderer’s offer align with the

Council’s Specification? Check for stated ‘non-conformances’ If anything is unclear, seek clarification Beware of abnormally low prices being offered

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Pre-Contract Activities

Conduct a pre-contract meeting with the preferred Tenderer

Negotiations are fundamental What documents are to be incorporated in the final

contract? Do any pre-contract discussions or emails change

aspects of the contract? ‘Priority of Documents’ clause Both parties to review the contract and sign-off

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Contract Management

Carefully manage the resulting contract

Appoint an accountable officer Conduct regular reviews Always check invoices for accuracy Monitor timeframes and deliverables Only Council-driven variations should arise!

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Adelaide City Council Experiences

Acceptance of a tender offer with a low price

Major design contract Tenderer undercut in order to win the contract Security of Payments Claim Settlement – based on ‘reasonableness’

Early Contractor Involvement Model

Collaborative approach Involvement of contractor at early stage of project

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Adelaide City Council Experiences

Complex pre-contract negotiations – GMP (Guaranteed Maximum Price) GMP was very competitive – abnormally low? Significant discussions and email correspondence

regarding inclusions in the GMP Final contract did not include all aspects of the pre-

contract discussions Dispute as to scope inclusions Numerous variations issued by the contractor

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Questions

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