Did you know that tendering is serious business? It is not child’s play or a platform for “window shopping” by procuring entities.
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It is also not an invitation to treat for testing the waters for suppliers.
Public procurement laws have in place measures to minimise the risk of child play in the serious business of tendering that protect both the procuring entities and suppliers.
There is inherent risk of changing goalposts in a tender process by both procuring entity and the providers.
Provisions to manage modifications of RFPs to ensure transparency and fair treatment of prospective tenderers as well as tying the tenderers to their submissionare available.
The bid bond is the tool for tying bidders to their submissions.
Bid Bond is surety offered by the tenderer to the procuring entity that he stands by his submission during the validity of the bid.
It is, therefore, critical in a procurement process to state the required bid validity period.
A bid bond is, therefore, returned to losing participants when the contract has been signed and to the winner when all contract formalities have been completed.
Bid bond ensures thattenderers cannot withdraw or modify submission after the tender closing deadline or risk its forfeiture.
This is in line with Article 41 of the new UNICTRAL Model law and Section 11 (1) (b) of the Zimbabwe’s SI 171 of 2002 which requires a minimum validity period of 30 days from the tender closing date.
There are circumstances when the tenderer is allowed to modify of withdraw a tender without the risk of forfeiting the bid bond.
Conditions for bid withdrawal without a penalty are when the bid is withdrawn before the tender closing period, only possible for tenderers that submit bids early.
They have time to review the copy of the submitted bid and make judgement to withdraw it before the tender closing deadline without any implications.
Such bidders have capacity to recall in total submitted bids orresubmit modified bids before the tender closing period without any penalty.
The risk to procuring entities when a bid is withdrawn after the tender deadline and before the expiry of the bid validity emanate from inconveniences suffered by the entity.
The procuring entity may suffer costs associated with delays on a project due to the withdrawal.
An alternative of running a new tender process also has cost implications to the procuring entity.
The third option of awarding to the second best offerer implies paying more if the procurement decision was based on price or acquiring inferior solution when the decision was quality and cost-based.
Acceptable forms of bid bonds are cash deposit equivalent to the bid bond requested.
A bank cheque of the equivalent value of the required bid bond may also suffice.
An undertaking by a bank to guarantee the validity of the bid with a value equivalent to the required bid bond is also sufficient.
What vary are the costs associated with establishing appropriate security and a bid bond issued by a bank is the most expensive.
Submitting a bid is, therefore, a serious commitment.
Nyasha Chizu is a Fellow and member of congress of the Chartered Institute of Purchasing and Supply writing in his personal capacity. Feedback: email@example.com