PP Online - When to accept late tenders

Procurement Professional is the official publication of CIPS Australasia

#91 - When to accept late tenders?

09 Nov 2009

Is ‘late tenders’ the most controversial subject in public procurement wonders The Buyer?

The ongoing debate of fastidious rule making v common sense shows no sign of abating. ‘Late tenders’ hi-jacked the Q&A debate at the CIPSA public sector event way back in 2007 – when 60% of delegates in a straw poll indicated they felt late tenders should never be accepted under any circumstances. A hard line, which is backed up by the Commonwealth government Procurement Guidelines [CPGs] which state; “8.63 Late submissions must not be accepted unless the submission is late as a consequence of agency mishandling.....”

But a hard line is a very hard line.

What if the tender is late for reasons outside the control of the tenderer? Force majeure even? A communications mix-up? The courier got lost? Australia Post’s fault? A key person at the suppliers is sick that day? The delivery man was late? A polar bear mugged the delivery man in the car park and two nuns ran off with the car keys and the tender was in the trunk? A foul-up in your reception area? They sent the e-mail, you didn’t get it? The firewall ate the tender? The attachments had a virus? The bid was in Word 07 and the buyer uses Word 05? …...the list of excuses or reasons is infinite.

Fine, you might say. Their fault, ultimately. But what if that late tenderer is only two minutes late, or 30 seconds? Or what if the late one is the incumbent supplier or, even, your favoured bidder? And when is it the buyer’s fault, and when the vendor’s exactly? Things can get confusing quickly. The Buyer was once found by his Director of Purchasing stuffing ring-binders for an incumbent supplier in the main reception of our building in a desperate attempt to get a complex and eclectic tender in to the big wooden box (see blog #20) by 12 noon that day. Sales reps were driving from all over to get their bit of paper in to the ring-binder on time. How stupid. What a waste of resources.

We were in that situation because;

1. We gave the vendors too little time to answer the tender.
2. The requirements were too complex.

And there lie the two villains of the peace. The two ever-present reasons why tenders are late in the first place. A clue is how quickly, or how often vendors call-in to try and get an extension [for themselves or even for all bidders].

Also suppliers are busy. They are never sat around waiting for the mighty YOU to send out your RFP. You are only one customer – they have lots. Remember the old PMMS work [see blog # 9] – suppliers rate your business by revenue to them and hassle of supplying you v future potential profit from your account. You may not be as far up that scale as you think you are. IF you want the best possible outcome, you may have to be flexible yourself to get everyone to play.

But if you do accept late tenders – how late is too late? Minutes late? Hours late? Days late? A week late?
e-procurement makes the whole thing a bit easier of course – until they hit the SEND button too late.

The truth is that buyers should use their judgment – their common sense. You can still be consistent and flexible. Reasonable but firm. Fair but stoic.

There is room for judgment here. When to accept a late tender and when not is partly down to three questions;

1. Did we give [them all] enough time to offer their best solution?
2. Has the bidder got a good reason for being late?
3. Is it fair on the others, or did they get an unreasonable advantage?

Process is sometimes just a poor substitute for judgment.

In the end, use your best judgment at all times.