Are you thinking about, or in the process of, lodging a Commonwealth Government, a State Government or a Territory Government tender? Well, don’t lodge a tender response until you’ve seen this.
Lodging a response to a state or commonwealth government tender? Well, you don’t have to accept the draft contract that came out with the tender as is. Stand by, and I’ll tell you why.
Hi, team. Simon here from the Contract Company. Contracts, that’s what we do all day, every day, and sometimes overnight. Lucky us.
So, the commonwealth or state government has issued a tender, and you are responding. And in the tender pack, there is a draft contract. Well, you don’t have to accept the terms of the draft contract as they are presented to you.
You can look to vary the terms and conditions of that contract to make it more favorable to you.
And I would suggest you do that. This is because draft contracts often issued with these tenders have what’s called an inherent drafting bias. This means they’re drafted in favor of the party that presented them in this case, the government.
Actually, saying those contracts have a drafting bias is like saying Beethoven wrote a bit of music. You know what I’m saying? So, it’s in your interest to try and make the contract more reasonable to you.
How do you do that?
How to Lodge a Tender Response
Well, when you draft your tender response, you should include what’s called a statement of compliance.
Now, the tender documents themselves will tell you the form that that statement of compliance needs to take. But basically, it’s a document that sets out how you want to change the draft contract.
In other words, you’d specify which clause you wanna change and how you wanna change it. The key here is to change it enough to make the contract more beneficial to you.
But do not change it so much so that the government gives you an adverse risk rating when they do an assessment of your tender. So that way when they evaluate your tender, you’re not put in the too hard to deal with basket.
We have done statements of compliance for the Commonwealth and we’ve done risk ratings on vendor responses in two main ways.
Ways of Risk Ratings on Vendor Responses
The first way we’ve done them is you actually make a determination as to the risk that the Commonwealth or the state government would be accepting if you accepted the vendor’s terms and conditions as they were presented to you.
And that’s slightly artificial. This is because you issue a draft contract, the vendor responds with their proposed changes, but you actually wouldn’t end up there.
You would then have a negotiation between the successful vendor. Then you’d end up with contract terms that were somewhere between the two.
The other way we’ve done the risk assessments is basically to form a view as to how hard or time consuming it would be to deal with that vendor.
In other words, if we’ve issued a contract that says 50 clauses, not that you’d get out of bed for a contract that’s got 50 clauses, but if it was 50 clauses long and a vendor comes back and wants to change 40 you probably put them in the too hard to deal with basket.
Whereas if another vendor responded, and assuming solution and price are roughly equivalent, and they only wanted to change say 20 clauses, then you’re probably going to rate them higher.
Anyway, I hope that helps. If you have any questions about today’s little video, please get in touch, http://Simon@contractcompany.com.au or 1800 355 455 Contracts, that’s all we do. Thanks.