How to reduce impropriety in tendering
IN this second instalment of a three-part series that seek to address the modus operandi of running tenders, thereby reducing possibilities of impropriety, we shall examine what ought to be involved in the tender bid preparation process up to the declaration of the winner.
A tender system must specify the form and content of bids to be submitted by tenderers. A procuring entity must prescribe both the form and content of the bid to make comparison of bids much easier.
Issues normally covered under bid preparation include the language of the bid, the number of bid copies to be submitted and markings thereon. The overriding objective of the bid preparation process is for the procuring entity to extract from tenderers facts on the basis of which an objective evaluation of each tenderer’s offering can be ranked against competition for purposes of making an award.
A procurement system must clearly state, for each “request for tender” that it sends out, the deadline for submission of bids and the acceptable method of delivery of the bids. To be fair, a request for tender must also expressly state the consequences of late delivery of bids.
Where the procuring entity decides to extend the deadline for the submission of tenders, on its own initiative or at the request of a tenderer, such an extension must be communicated to all would-be tenderers at about the same time and through an advertisement in the public media.
The law does not allow procuring entities to treat some tenderers less favourably than others, especially if the uneven-handed treatment of tenderers is going to cause loss or injury to those tenderers that would have been treated less favourably.
All tenderers must thus be treated even-handedly to avoid nepotism and hence possible breaches of duties imposed by the Administrative Justice Act (Chapter 10:28) under Section 3 on procuring entities and the acts and omissions specified in the First Schedule of the Competition Act. These include the following:
Bid opening: Organisations that value the transparency of their tender administration systems invite tenderers to witness the tender opening process. Scheduling tender opening immediately after the cut-off time for submitting tenders has the advantage that most tenderers might still be present.
On that occasion, the tender box is opened and the names of the bidders and the value of the bids are announced.
The significance of taking such a step is two-fold. Firstly, the tendering process is not a one-way street. Tenderers justifiably expect procuring entities to constantly “account” to them by giving feedback at appropriate stages in the process.
Secondly, tender administration is not and should not be a “black box” to tenderers. Opacity breeds corruption and nepotism. In fact, all the other evils that are harmful to the process of competitive selection generally thrive under opacity.
Accounting to tenderers by procuring entities is therefore an important device for keeping possible deviant behaviours in check. After all, tenderers have an interest not only in the final award but the entire process .
Adjudication and award: The process of adjudication and award of a tender involves evaluating and attaching weights to a tenderer’s response and ranking the tenderer against competition. Put differently, adjudication is supposed to look into the merits of a tenderer’s offering against the offerings of competitors.
The adjudication and award phase of tender administration must be a transparent, reasonable and objective process that is based only on the qualification criteria that was communicated to tenderers at the beginning of the tender process and not any other previously unstated or undeclared or extraneous consideration(s).
As with all the other stages, procuring entities must observe procedural and substantive compliance with the relevant laws if a subsequent award is to survive scrutiny by unsuccessful bidders and the courts of law. Care must therefore be taken at this stage to avoid decisions that can afterwards be demonstrated to not have been objective.
Organisations can make themselves less prone to the risk of arriving at indefensible decisions by incorporating, at the planning stage, measurable standards for adjudication as opposed to adjudication criteria that are imprecise, vague and largely discretionary and therefore not capable of yielding objective results.
Objectivity is paramount in tender adjudication. But one may ask: “How do we test for objectivity or otherwise of the adjudication criteria?”
Well, whether an adjudication criterion is objective or not is a matter that can be resolved by a simple test.
Criteria that are objective should enable decision-makers, irrespective of their identities, to arrive at more or less the same decision, based on the same facts, and provided the decision-makers possess about the same educational background and of the same average commercial experience.
Organisations can thus conduct in-house “objectivity tests” before inviting the public to participate in their procurement process.
As mentioned before, failure to pass the objectivity test has been a source of embarrassment for many companies and their officials.
Board members and senior management can save money and time as well as avoid the ignominy associated with tender scandals by instituting tender systems that make it impossible for a few people among their number to disgrace the board, management and the entire organisation.
Notification: Once the successful bidder has been selected, a procurement system must give feedback to all participating bidders, in writing.
Such feedback is important for a number of reasons.
Firstly, every participating bidder has a vested interest in the outcome of the tender and as such, is entitled to a reply.
Secondly, notification is a crucial milestone in the tendering process. Aggrieved tenderers have a right to challenge an award. For purposes of reversing the award, unsuccessful tenderers can only do so after being notified of the outcome of the tender process. Where no time limit is stipulated in a tendering process, aggrieved tenderers have a window of opportunity to challenge the award between their being notified of the outcome and before the successful tenderer begins to implement the contract.
But once the successful tenderer begins to execute the awarded contract, any challenge subsequent to this would be of academic and no practical consequence.
Keeping unsuccessful tenderers in the dark following an award effectively denies them the opportunity to challenge any perceived impropriety regarding the awarding of a tender.
And, without this vital check, decision-makers may thus successfully evade due accountability, thereby defeating the very ends of competition for which the whole tendering process was undertaken in the first place.
Written feedback regarding the outcome of a tendering process therefore plays a crucial “homeostatic” function without which a procurement system may very easily become hostage to a cartel of insiders to the overall detriment of the company and society at large.
- Chikomwe is a Harare corporate and finance lawyer. This article was written in his personal capacity. He can be reached on firstname.lastname@example.org