Public-Sector Entities Sharing Bid Information, and When Does Contract A End? NECI

FREQUENTLY ASKED QUESTIONS

Public-Sector Entities Sharing Bid Information, and When Does Contract A End?

Through our Signature Seminars, eSeminars, Public Sector Procurement Program (PSPP) and other courses, our NECI instructors regularly answer questions about procurement-related issues. Here are two recent questions.

What is the current thinking about public-sector entities sharing bid information? We are in the MASH sector (municipalities, academic institutions, school boards, and health and social service providers) and taking advantage of more and more provincial government tender contracts that are now available to us. We are conscious about bid-shopping, and always advise our users that once we go to RFx, we can’t go back to the government agreements. As the MASH and government collaborations increase, and we handle our own RFx’s, some government parties are curious about our experience in going to market, for when they go back out. We are cautious about the free flow of information, particularly from MASH to government, given that the current direction is the other way around. RFx strategies and the like don’t raise much concern, but sharing results makes us hesitate.

Generally speaking, bid-shopping has to do with using already submitted bid pricing as a negotiating tool with other suppliers. Typically, this relates to cancelling a tender process after closing, and then either going back out to market with the same scope, or using the pricing submitted in negotiations for a direct award of the work. Having said that, we know that the public sector is a lightning rod for challenges, and that the legal definitions of such terms are shaped, over time, by the various allegations that come before the courts.

Obtaining information on the lump-sum price of similar contracts with other public organizations is common practice, and indeed, it is public record, so probably couldn’t be considered improper. Going beyond that, however, and obtaining other pricing that perhaps did not result in an award, might be riskier territory. Using the lump-sum award pricing when shaping internal budgets is common, but if, for example, you were to use that information as justification for cancelling a tender process already underway, we could see some potential issues.

It would be prudent for you to raise this issue and get some legal advice on the implications. As always, this is not legal advice, just our take on the question, as educators. We have not heard this issue from any other organization, but as you say, the practice of sharing information among public-sector entities is becoming more common. While that is a good thing, you are entirely correct to be a little uncomfortable with the practice until you receive a legal opinion on how far you should go. The last thing you want, of course, is for the courts to make that determination for you.

At what point in the competitive bidding process does Contract A end? 

Great question! From a legal perspective, Contract A expires when Contract B (the Performance Contract) is signed with the successful respondent. If there is unfairness, of course there can be a challenge after Contract B is signed, but the alleged unfairness must have taken place during the competition before Contract B was signed.

Do you have procurement-related questions that might be of broad interest (or additions to/rebuttals of our answers)? We invite you to send them to our Legal Editor and Publisher, Maureen Sullivan ([email protected]). We will publish questions of a general nature that we think are relevant and timely. We cannot address specific legal questions, provide legal advice, or guarantee that your question will be published.

Reprinted from The Legal Edge Issue 111, July – September 2015

 

 

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