Tendering and Procurement: Practical Considerations
For many organisations, tendering and procurement can be a formidable task, particularly if they are new to it. With so many issues and documents to take into consideration the process can seem overwhelming.
There are many legal issues to take into account when tendering and procuring, and also entering into contracts following a successful tender. We have set out below some of the key considerations.
Resources
One of the first points to consider is whether you have sufficient dedicated resources to effectively roll out the tender, in particular on time. Failure to comply with time limits may inadvertently lead to early sanctions or, in the worst case, termination and liability for damages.
Main Contract considerations
Main Contract considerations include clearly defining the scope of the work/services that are to be provided. The scope of work/services should clearly define the timeline and deadlines that are expected as well as specific and clear KPIs. It is important that you are clear about the main contractual obligations that you are subject to.
Intellectual Property Rights
One aspect of the contractual considerations that can often be overlooked relates to intellectual property rights (IPR). It is important to ensure your own IPR is protected and that you have the right to use/sub-licence any necessary third party IPR.
Appointment of Subcontractors
Appointing sub-contractors can sometimes result in problems if the contractual arrangements with them are not implemented correctly and comprehensively. If possible, your arrangements with sub-contractors should be largely in place (at least in principle) at the time of tendering.
Also, when appointing sub-contractors, carefully drafted contracts are key to ensuring that the legal position between you, the client and your sub-contractors is clear. It is usual for the relevant main contract provisions to be “back-to-backed” with the sub-contractor. This is to ensure that you can pass onto the subcontractor any liability that you may have to the main contractor as a result of the sub-contractor’s action or inaction.
For comprehensive advice on the legal issues relating to tendering and procurement, please contact Steve Thompson or Tegen Quinn on 029 2082 9100.