How a bid / no bid strategy can help you NOT to be excluded through bad contract performance

I’m sure you will have heard of a supplier who having won a contract then either throws in the towel or comes to some amicable agreement to finish a contract early. What most don’t realise is that this could be the end of you being awarded a contract again. Hence the importance of making an assessment of the contract requirements before deciding to submit a response.

Having a bid no bid strategy is so important. Often a supplier will have won a contract because they made a submission with very strong ideas and innovations. When the contract starts, they just doesn’t meet the expectations of the buyer. This is when we should look to see we don’t get banished from winning and running a contract ever again.

Inevitably, the buyer and supplier can become stuck in a contract that most likely ends up costing both more in the longer run. The outcome can bode badly for the supplier and the likely outcome is that the supplier will find the contract being terminated.

The Public Sector Contract Regulations 57(8)(g) PCR2015 (England, Wales, Northern Ireland), 58(8)(g) PCR(Scotland)2015 (Scotland) and 57(8)(g) Statutory Instruments NO 284 of 2016 (Ireland) first states that the performance must have been significantly or persistently deficient. Secondly, that the poor performance must have led to early termination, damages or other comparable sanctions.

When a contract is first entered into, getting out of it is not easy. There are many things to consider, including:

  • The relationship with the supplier
  • Outstanding orders
  • Third parties
  • Tender procedure to appoint a new supplier
  • Contract exit arrangements and handover.

Sometimes buyers just continue on a ‘bad’ contract with the incumbent supplier because it is thought to be less time consuming than the time and the money involved in terminating the contract.

Regulation 57(12) PCR2015, 58(12) PCR(Scotland)2015 and 57(20) Statutory Instrument NO 284 of 2016, states buyers must consider how long ago past performance occurred. A supplier can only be excluded during the three years immediately after a relevant bad event.

From regulation 57(13)(14) PCR2015, 58(13)(14) PCR(Scotland)2015 and 57(12)(13) Statutory Instruments NO 284 of 2016 we can see that a supplier, who has taken action to prevent poor performance (‘self-cleaning’), can demonstrate that they are now reliable. By providing evidence of the ‘self-cleaning’ actions they have taken, under these circumstances potential suppliers cannot be excluded by the supplier.

Buyers have to carefully consider the evidence of the supplier, if they do not find it sufficient, regulation 57(17) PCR2015, 58(17) PCR(Scotland)2015 and 57(16) Statutory Instruments NO 284 of 2016 states that the buyer must provide the supplier with a good reason for their decision.

In summary

To be excluded, a supplier, based on poor past performance, which lead to early termination of a contract or other sanctions, must have happened within the last three years of the current submission. The supplier must have taken no self-cleaning measures, or if they did the measures have to be found unsatisfactory.

The real issue here is not to get into a contract that may lead you being excluded. sometimes we have a very strong desire in business to win something despite the evidence that tells us we should not.  Having a strong bid / no bid strategy could save you much time effort and energy and leave you being able to submit against a really strong contract at a later date.

Do take time to read this post before bidding.

© The BIZphit Tendering Team

Categories: Bid / No Bid strategy

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