Tender Documentation (Public Construction – Guidance 3.6)

Effective date: 2 August 2019

Objective: To help Agencies provide clear and fair information about the specific procurement opportunity

Summary

Tender Documentation released to the market should ensure tender participants clearly understand what the Agency is seeking to procure and promote fair and efficient competition.

Tender Documentation should provide tender participants with the information needed to submit a responsive tender.

Tender Documentation should be appropriate for the tender process, including staging (where applicable) and the Procurement Model.

As much as possible, Tender Documentation and processes should be familiar to the industry and promote consistency of process across comparable procurements.

Agencies should use standards known to the industry, including applicable Australian Standards and the Building Code Standards when drafting project specifications.

This Guidance describes factors to consider when preparing Tender Documentation.

Note: Relevant entities are not obligated to release confidential information, information that is sensitive to security, or information that may impede competition.

Terms and conditions to be set out in Tender Documentation

Tender Documentation is appropriate for the tender process and Procurement Model

The Tender Documentation should:

• be scaled to the complexity of the procurement
• be appropriate for the tender process, including staging where applicable, and the Procurement Model
• be scaled to the level of design resolution consistent with the Procurement Model
• focus on eliciting the information necessary to determining the best value for money outcome.

Different Procurement Models address specifications in different ways. Specifications range from outcome-based requirements (frequently used in public private partnerships) to very detailed specifications used in a Construct-only project.

The extent of design resolution varies based on the Procurement Model. See Government as Smart Client for a description of stages of the design process and extent of drawings recommended at each stage.

In a Construct-only project the specification and drawings may be supplemented by a Bill of Quantities – a measured list of the materials needed for the Works.

Tender Documentation should promote open and fair competition

The Tender Documentation must include the mandatory items set out in Tender Documentation (Instruction 3.6) and, in addition, should:

• provide detailed specifications of all work to be covered by the contract and information for the potential tender participants to assess the project risks
• identify any special conditions of contract stipulated by third parties (for example, as part of a statutory approval process)
• clearly specify any arrangement for novating agreements from the Agency and include the relevant novation agreements, subject to normal confidentiality requirements
• be drafted clearly and concisely without unnecessary repetition (terms and phrases used throughout the documents should have consistent meanings) and avoid any poorly worded or ambiguous statements
• detail the tender process including, for example, if the evaluation:
  • reserves the option to use a best and final offer process
  • assesses past performance or references from previous projects
• include copies of, or references to, any Agency procedures, standards or guidelines that Tender Documentation refers to or the tender participant is required to comply with.

Unless there is no other sufficiently precise way of describing a requirement, technical specifications should not require or refer to:

• a particular trademark or trade name
• patent
• copyright
• design or type
• specific origin
• producer
• supplier.

Where relevant, words such as ‘or equivalent’ should be included with particular requirements.

However, where interoperability with existing equipment or systems is needed, it is appropriate to specify this even if that limits the field of potential tender participants.

Terms and conditions applicable to the tender process

Evaluation criteria should:

• be presented clearly, including identifying any mandatory criteria
• describe the relative importance of each criterion (this is only a mandatory requirement for procurements subject to international agreements, see Evaluation criteria (Guidance 3.7))
• be specific to the relevant stage of the approach to market.

Include all relevant administrative details related to submitting a tender, such as:

• the method and time to lodge tenders
• access restrictions for lodgement
• the place or process for lodging tenders.

Include all relevant administrative details related to presenting a response, such as:

• the required format (electronic or hard copy)
• the number of hard copies required to be submitted (noting a shift to electronic lodgement may reduce this burden on tender participants).

Provide contact details for the Agency, which may include:

• identifying the Agency’s contact person
• providing an email address for enquiries
• listing separate contact details for arranging site visits or inspections.

Advise if a best and final offer process will be used. A best and final offer process is a formal request to all tender participants (or all shortlisted tender participants) to indicate if they are able to improve the offer they have previously submitted. Best and final offer processes are optional, but should only be used if the Conditions of Tender reserve the Agency’s right to ask for them. Treat tender participants subject to a best and final offer process in the same way.

Address whether innovation is invited as part of the tender response and how it will be handled.

Address how late tenders will be handled:

• In the event that the Agency is prepared to consider late tenders, the Conditions of Tender should describe how the Agency will treat late tenders. There may be a statement that late tenders will not be considered, but Agencies need to determine what is meant by a tender being ‘late’. The important consideration here is not the strict application of procedural rules but maintaining the integrity of the process and the principle of not allowing one tender participant to have an advantage over another.
• A tender participant should not be penalised if the reason a tender response is late is the fault of the Agency. The procedural rules set out in the Conditions of Tender should provide appropriate allowances for such situations.

Address whether the Agency reserves the right to negotiate with one or more tender participants.

Address how alternate or non-conforming tenders will be handled:

• Clearly state whether alternative tenders will be accepted, and the rules for submitting an alternative tender, for example, an alternative tender may be submitted subject to a conforming tender also being submitted.
• In the event that the Agency is prepared to consider non-conforming offers, then the Conditions of Tender should describe how the Agency will treat non-conforming offers. The important consideration here is not the strict application of procedural rules but maintaining the integrity of the process and the principle of not allowing one tender participant to have an advantage over another.

Address whether the Victorian bid cost reimbursement policy for major construction projects applies, and what form it will take for the tender process.

Avoid issuing late and multiple addenda

Agencies should ensure the Tender Documentation is sufficiently resolved before its release, to minimise the need for addenda or changes during the tender open period. A properly structured review of the Tender Documentation before release will support this. It is better to delay the release date than to issue Tender Documentation that has not been thoroughly checked and will need to be amended.

Sometimes it is necessary to make changes to the Tender Documentation during the tender open period. Good preparation and planning will help to minimise this.

Making changes to the Tender Documentation may affect tender participants’ ability to prepare a response. If this is the case, extend the closing date to allow tender participants time to respond to the changes.

All tender participants need to be given effective notice of addenda and any changes to the lodgement deadline.

Whether an adjustment to the closing time of the tender is needed depends on:

• the nature of the amendment and consequences for preparing responses (for example, a change to the design specification may require tender participants to obtain additional quotations or to undertake additional risk assessment)
• the time remaining in the tender process (where a change occurs close to the closing date, tender participants will probably require more time to respond).

What to include in Tender Documentation

Agencies must use the model Tender Documentation designed for use with a Victorian Public Construction Contract where appropriate. This model document has been developed to help standardise the documents submitted to the market, thereby reducing the burden placed on potential tenderers.

The following table describes the components of the Tender Documentation and the purpose they serve.

The Tender Documentation needs to be supported by a forward notice (see Forward notices (Direction 5.1).

Take care when preparing Tender Documentation

Be careful when developing and checking Tender Documentation because it can create a legally binding process contract or leave the Agency liable for misleading or deceptive conduct.

Ensuring Tender Documentation is accurate and reflects the way in which the Agency will conduct the tender is not just an efficiency or probity consideration, there are potentially legal and financial consequences for the Agency for not adhering to the terms set out in the Tender Documentation.

Useful resources

The suite of Victorian Public Construction Contracts meets the contracting requirements in Contracting requirements (Direction 7.1).

Agencies are encouraged to refer to the Model Conditions of Tender when developing Agency-specific forms, to promote consistency across Agencies. The Partnerships Victoria Requirements provide model contract forms that apply when using this delivery model.

The Victorian Alliancing Policy provides model contract forms that apply when using this delivery model.

Government as Smart Client (Office of the Victorian Government Architect, August 2013)

Describes stages of the design process and the extent of drawings recommended at each stage.

Tools and support

The Practitioners Toolkit includes key documents, guidance and information about the Ministerial Directions and Instructions for public construction.

The suite of Victorian Public Construction Contracts are available at Practitioners toolkit - Standard form contracts.

Model Request for Tender conditions are available at Practitioners Toolkit - Tools and templates.

For further information about the Ministerial Directions and Instructions for public construction procurement, please contact the Construction Policy Team.