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Qualifications / Exceptions

Qualifications / Exceptions

Alan Tawse
14. Dec 2020 | 3 min read

Qualifications / Exceptions

The principle of the tender process is that the client provides a minimum set of standards, a scope of work, delivery terms and other conditions together with a draft contract with legal and commercial terms and conditions that will apply to the successful bidder(s). The client wants all bidders to bid on that basis in order to have a fair comparison of what each bidder can provide for what cost.

 

Price effect

Normally as part of the client's tender process they will require that the bidder clearly identifies any instance where they are unable to meet any standards or terms and conditions. Since the bidder has submitted their price based on their own qualifications or exceptions, the client's tender instructions will normally ask bidders to keep the number of qualifications to a minimum, and may require the bidder to include information as to how their price would be affected if the qualification were not accepted by the client. 

In practice, most times the bidder will not do so, as they are aware that these qualifications will be discussed further as part of the post-submission clarification phase. The bidder will also be concerned that if a price effect is provided, then there is a risk that the client may simply opt to pay the increased price, and remove the opportunity for the bidder to negotiate their preferred exception.

 

Explain the reason

Many qualifications or exceptions arise because the bidder has concerns about the intention or wording contained in the tender documents and perceives a risk that needs to be addressed. It is not necessarily the case that the client perceives the same risk, or they may underestimate the effect it will have for the bidder. It is good practice for the bidder to provide clear reasoning for taking their exceptions, perhaps including example(s) to aid the client's understanding of their concerns.

 

Limit the number

It is also important to try to minimize the number of qualifications presented in the tender submission, as too many will create a bad impression of the bidder and be viewed as an impediment to the tender evaluation. For that reason, the bidder has the option to consider whether asking a clarification about a standard or condition during preparation of their response might be a better option. Since other bidders will also see the question, care should be taken about a) whether to ask, and b) how to word the question. It will be a benefit to the bidder to tackle any issues that can be cleared up before submission, and reduce the number of clarifications or exceptions in the final submission.

 

Plan for the negotiation

When deciding to include a qualification or exception in the tender submission, the bidder is simply pushing forward the discussion that will be inevitable. For that reason, it is worthwhile planning ahead and preparing for the discussion with the client. The bidder should have a position on each qualification. Some may be negotiable, others may be non-negotiable, and the bidder is prepared to walk away if the client will not accept the qualification. For those that are negotiable, there may be some groundwork that can be done or a negotiation plan that can be drafted in order to be well prepared. 

Once any negotiation on the subject begins, it is likely that there will be limited time available to respond and reach an agreement.

 

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Alan Tawse

Alan Tawse

Alan has worked in the oil and gas industry since 1974 in various administrative, operational and managerial roles in the UK, Netherlands and Norway. In 1993 he joined Halliburton in Norway as country manager of their new Drilling Systems division. Following a merger with Dresser industries in 1998, he moved to Business Development where he established a BD support team providing centralised expertise for tendering, contract management, market intelligence and various BD software systems. After managing up to 200 tenders and proposals annually for over 20 years, Alan retired at the beginning of 2020 with plans to explore Norway, and spend time with family overseas, He enjoys downhill skiing in the winter, golfing in the summer and following the Formula 1 racing season throughout the year.

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