Better market engagement

...being open about the process


Colin Lange - 02 February 2005.

On 1 January 2005 the US/Australia Free Trade Agreement (USFTA) came into effect. Chapter 15 on Government Procurement contains 15 Articles and numerous annexures – it's tough going.

My attention was drawn to Article 15.6 sub paragraph (e), viz… documentation shall include a complete description of: “any other terms or conditions relevant to the evaluation of tenders”.

Could this mean there is a mandatory requirement to describe how the evaluation will happen? It sure looks that way. Supporting this view, the Australian Government Department of Finance circulated advice to Australia governments in January 2005, Guidance on the Mandatory Procurement Procurements, which highlighted the need for agencies to include in their Request for Tender document:

I’ve been including a section within Tendering Conditions called ‘Tender Process’ for many years.

This section is deliberately designed to ‘engage’ the market. I often suggest it is the section where mutual process obligations are described – i.e. what the tenderers can expect from us and what we can expect of them.

What they expect from us is: a ranking of evaluation criteria; advice about where and how to respond; what to include and exclude in their tender; an evaluation timeline; evaluation stages and what they mean; what will happen if they are shortlisted; negotiation protocols (or not); a statement suggesting the preferred tenderer will be the one (if any) which offers best value for money and not necessarily the cheapest conforming tender. Finally they can expect a de-brief.

What we expect from tenderers is: a tender prepared as per the Tender Process guidance – there should be no excuses by tenderers if you’ve clearly described and explained your response expectations; no surprised looks or undue delays too when we ask for a demonstration or presentation after telling a tenderer they’ve been shortlisted; and tenderers ‘trying their best to win’ first time round.

A ‘good’ Tender Process section will eventually (it doesn’t take long!) lead to better and more competitive tenders. After managing about 25 requests for tenders for suites of management software over 3 years in the same industry sector, whole of life prices reduced by about 50% towards the end and clients were getting better software and service. The market had simply become far more competitive. Reason enough to think someone got it right at Article 15.6 sub paragraph (e).