Network of Procurement Professionals Friday 13 November 2015 “Capturing a Tender Offer in the Contract” Brett Kahland, Senior Commercial & Contracts Specialist Merryn Cossey, Team Leader Procurement & Contract Management Adelaide City Council 1

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! 2

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 3

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 4

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 s change aspects of the contract? ‘Priority of Documents’ clause Both parties to review the contract and sign-off 5

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! 6

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 7

Adelaide City Council Experiences  Complex pre-contract negotiations – GMP (Guaranteed Maximum Price) GMP was very competitive – abnormally low? Significant discussions and 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 8

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