News & Views

Practical Tips For Preparing a Bid

9 April 2020

Authors: Outi Jousi (Counsel, Head of Public Procurement in Helsinki), Eeva Tiainen (Associate), Vilma Lumiaho (Associate Trainee) and Jesper Nevalainen (Partner, Head of Technology in Helsinki)

The participants of a public sector tendering competition need to take into account three things: price and quality being the obvious two, and the third important aspect being precise. The logic used in public procurement often differs from common sense, and a contracting authority generally has the right to reject a bid on the grounds that it is non-compliant with the invitation to tender based on an error or fault that may seem minor. The situation is regrettable when a lot of time and resources have been spent on preparing the bid. In this article, we present tips in order to ease the pain of taking part in public sector tendering competitions. After all, we all hope that public sector tendering competitions will be able to provide some relief to companies amidst this crisis.  

During the initial preparation phase of a tendering competition, before publishing the invitation to tender, the contracting authorities may arrange a market survey, which in practice may, for example, entail informal discussions with potential bidders. The contracting authorities may send documents to the bidders for comments, hold a briefing session, or discuss rather freely. All of this allows the parties to receive necessary and value-adding additional information for the purposes of the procurement. Furthermore, both parties have the chance to give comments and share knowledge on different solutions on the market. A bidder may also suggest holding a market survey to the contracting authority. The market survey phase is in practice the only opportunity for a bidder to have a significant impact on the tendering competition.

It is of crucial importance to pay special attention to the provisions of the agreement in the market survey phase. For example, provisions on whether a contractual party’s liability is limited to five times the value of the contract pursuant to public sector JYSE terms and conditions or if there are any provisions governing limitation of liability at all. In most cases, amending these provisions during the contract term is not allowed, and being bound to unfavourable terms or getting rid of an unfavourable contract may prove to be highly problematic.

After the invitation to tender has been officially published, the bidders are often provided with an opportunity to present questions or comments related to the procurement documents. At this stage, it should be brought to light if there are any unclear sections in the invitation to tender and present all additional questions a bidder may have. Contracting authorities generally value open dialogue and bringing forth issues since this benefit both parties and contributes to the successful execution of the procurement. We recommend that both parties share comments on and answers to each others’ proposals and questions, as this makes it easier for the contracting authority to consider the proposed changes and helps the bidders in their assessment of the invitation to tender.

When preparing a bid, we recommend that the invitation to tender be carefully reviewed. It is especially important to pay attention to what is asked from the bidder and in what form the answer should be provided. For example, if the price should be given as a fixed annual price, submitting the price in another form may lead to a rejection of the bid altogether, in which case the bidder is left out of the tendering competition and may not re-enter.

Bidders may be required to provide their answers, for example, by using free text fields or drop-down menus. Therefore, the bidder should pay attention to whether the answer should be given in a yes/no form, as a broader description, or if it is required to be provided as an attachment. It is especially important to carefully answer each question and possible more detailed sub-questions in the required form. In our work, we have come across situations in which, for example, a bidder has only noticed half of the questions and, therefore, only received half of the points. As a good example of this we can mention the question of “What kind of development procedures is the service supplier prepared to perform by the year 2025, in order to ensure the preservation of the high quality and attractiveness of the service?”. In this case, the answer which gained the highest points included a list of the development procedures alongside their descriptions, an answer to the factors that would preserve and increase attractiveness, an answer to factors that would preserve and increase high quality, and a plan for each separate year – related to both evaluated factors, i.e. attractiveness and high quality!

It is important that the bidder only answers what is asked in the invitation to tender. Thus, no additional information should be included in the bid, such as the bidder’s own contract provisions, reservations, or a cover letter, since this information may contradict with the requirements of the invitation to tender, and in the worst case lead to the rejection of the bid and complete exclusion from the tendering competition.

Finally, we recommend that bidders check that the bid includes all the required attachments and that the ESPD form is filled precisely according to the given instructions. An ESPD form may also be separately required regarding subcontractors.

We strongly recommend taking part in tendering competitions. The public sector provides interesting and lucrative opportunities also during economically challenging times. If the procurement in question is challenging or important to the company’s business, we recommend preparing and reviewing the bid with an expert who specialises in public procurement.