The terms tender and request for proposals are often used interchangeably; however, the two are not the same. A formal tender process creates legal obligations once a compliant bid is submitted, whereas a request for proposal is often more flexible and non-binding. Managers and their clients need to decide at the outset whether they are going to run a formal tender process or a more flexible procurement process. The process selected often depends on the type of work and its anticipated cost.

Costly major capital repair projects attract close attention from board members and owners, and for that reason, formal tender processes are often selected. By conducting a formal tender process that clearly defines the scope of work, sets consistent bid requirements, applies objective evaluation criteria, and documents the recommendation made to the board, management can reduce the likelihood of dissent and criticism among owners by demonstrating that the process was transparent and professional. The process also helps ensure that the corporation receives bids that can be compared on a meaningful basis and that the selected bid is not necessarily just the lowest price, but the proposal that best meets the corporation’s specific needs, including quality, experience, timing, warranty protection, reliability, and overall value.

A tender process will only achieve its intended objective if the procurement rules created are followed, the tender requirements are applied fairly, and the bidders are treated consistently. To ensure that the foregoing are achieved, managers must be mindful of the common procurement errors discussed below.

Common Procurement Errors

1. Tender Ambiguity and Inconsistencies

Bidders to a formal tender are entitled to know the rules of the competition. If the scope of work, mandatory requirements, or scoring approach as set out in the tender are unclear or inconsistent, bidders are left guessing. This can lead to distorted prices, inconsistent bids, and a process that is hard to defend as open and transparent.

Formal tenders should always be reviewed by another set of eyes and ideally, those of a qualified third party, such as a lawyer or engineer, before they are issued. At a minimum, the definitions, cross-references, schedules, form of agreement and submission instructions should be reviewed for consistency. However, if, despite best efforts, a drafting error or concern is identified after the tender is issued, an addendum addressing the error or providing clarification should be promptly prepared and provided to all bidders simultaneously.

2. Non-Compliance with Evaluation Criteria

Tenders with well-drafted evaluation criteria only serve their intended purpose if they are adhered to. Problems arise when evaluators rely on personal impressions or allow undisclosed considerations to drive scoring.

If management is evaluating the bids and making a recommendation to the board, it is important that management understands the evaluation criteria, uses scoring guides that closely match the language used in the tender, discloses and documents conflicts, and maintain a transparent record showing how their recommendation aligns with the published evaluation criteria, as minor deviations from the published evaluation criteria can lead to accusations of bias and impropriety.

3. Acceptance of Non-Compliant Bids

If a bid fails to include a mandatory insurance certificate or mandatory technical submission before bidding closes, the safest course of action is to assess compliance of the bid exactly as the tender requires. Although disqualifying a bid for non-compliance with a mandatory requirement may reduce competition and disqualify a preferred contractor, waiving a material defect for one contractor unfairly disadvantages the others who complied with the rules and can expose management and the board to complaints from other contractors and jeopardize the reputation of management and the board.

4. Post-Closing Bid Repair and Negotiation

Once bidding closes, management must be careful about what happens next. Requesting clarification of an obvious administrative issue is one thing. But allowing a bidder to fix a material defect in their bid submission after closing is another, even if done with good intentions. For example, if bids close and the lowest bidder failed to include temporary hoarding in its submission, if the bidder is asked to add that item to their submission, this may cross the line from administrative clarification to bid repair, which is strictly prohibited if the tender process is binding and non-negotiable.

Best Practices for Procurement

By following the best practices below, managers can help reduce the likelihood of a procurement error from arising and ensure that the procurement process followed is fair and transparent.

1. Careful Drafting

Ensure that the scope of work is precisely defined, and distinguish mandatory requirements from scoring criteria in the tender. Formal tenders should be reviewed by a qualified third party before issuance to ensure that the definitions, cross-references, schedules, agreement forms, and submission instructions are consistent. If errors are found after the tender is issued, promptly issue an addendum to all bidders for clarification.

2. Screen for Compliance First

Before evaluating the bids, screen the bids for compliance with the mandatory requirements set out in the tender. If a submitted bid does not comply with a mandatory requirement, the safest course of action is to disqualify the bid.

3. Follow Published Evaluation Criteria

When management is responsible for evaluating bids and making a recommendation to the board, it is essential to take a structured and transparent approach. Begin by preparing an evaluation matrix that uses language that closely reflects the language in the tender and includes the stated evaluation criteria and scoring guide so that the bids can be reviewed on a like-for-like basis.

4. Limit Post-Closing Communications

Limit post-closing communication to only administrative clarifications and inquiries that are specifically permitted by the tender.

5. Keep Detailed Records

A clean record often makes the difference between a procurement process that is defendable and one that looks improvised. Management and the board must be able to show how contractors were selected to bid, how bids were compared, and why the recommended bidder was chosen.

Procurement disputes and criticism are caused by ambiguous tenders, inconsistent evaluations, flexible treatment of mandatory requirements, and post-closing discussions that go too far. Managers who run fair and transparent tenders, document their evaluations and recommendations, and maintain comprehensive records put their corporations in a much better position to procure responsibly, manage risk, and make decisions that can withstand tough scrutiny.<

Ashley Winberg is recognized as one of the leading condominium lawyers in Ontario, with two decades of experience providing strategic legal counsel to condominium corporations of varying types and sizes throughout the province. Her expertise includes complex shared facilities disputes, construction procurement and deficiencies, employment matters, and issues related to aging and mental health. Ashley is committed to providing her clients with timely legal solutions and practical implementation strategies designed to prevent disputes, manage costs, and foster the development of harmonious communities. Ashley can be reached at Ashley@CommonGroundCondoLaw.ca.

www.commongroundcondolaw.ca

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