Procurement Perspectives: What is key in contractor and supplier relations?

3 years ago by in COMMERCIAL
Procurement Perspectives: What is key in contractor and supplier relations?
It is not necessary to decide whether the supplier or the municipality should take on the primary responsibility for improving the supplier/contractor customer relationship.
Stephen Bauld

The critical point to note is that both have so much to gain from doing so, that if one does not, the other should do so. Once steps have been taken to initiate more of a partnership arrangement, a process should be agreed to share issues and needs, in relation to such matters as price, service level, and cash flow (generally, municipalities are notoriously slow payers, which does very little to improve the supplier/contractor customer relationship).

The goal of this process is not just to maintain existing supply relationships. It is to expand them. As we all know, many private sector entities shy away from competing for government work. One of the most common reasons advanced in explanation for their reluctance to bid is that government work is subject to “too much red-tape”. From the context in which this term appears, it is clear that many businesses do not bid on government projects , because they have had bad experiences resulting from the exacting demands imposed upon the conduct of a government contract competition under the law of tender. In a disturbingly high number of cases, highly qualified bidders fail to submit qualified bids. Bids are received too late (perhaps a minute or two after the closing of the tender) or are missing certain information (i.e., consents to security background checks) or components (i.e., bonds or other bid security.)

Subject to the need to ensure proper qualifications, a municipality should encourage prospective contractors and suppliers to bid. The municipal purchasing operation is not a gate-keeping function. An important role for the purchasing department, while a tender for a major capital project is out for bid, is to ensure that all prospective bidders understand properly how to go about submitting a qualified bid for the contract.

Sloppily prepared and incomplete bid documents often leave government acquisition officials with no choice but to reject a bid that might very well have been awarded the contract if put properly. Ultimately, it is the government, that pays for these mistakes. As important as government contracts are to the overall economy, they make up a minority of the total work available to the private sector. The open, competitive system of contract award is a process with which many private sector companies are only barely familiar. As a result, many bidders make simple mistakes in preparing their bids, not realizing those mistakes constitute deal-breakers.

In a market-based economy, a strong argument can be made that suppliers, contractors, and their customers should each look after their own respective interests. Ideally, every large business should have a dedicated staff member who is experienced in winning government contracts.

The reality is that most do not. Since municipalities generally benefit from receiving more competitive bids than less, the onus falls upon the purchasing department of each municipality to provide support to bidders, so that the maximum number possible is put in a position to submit a competitive quote for a tender or RFP. Providing the above training serves this purpose. However, the responsibilities of the purchasing department do not end there. The tender and RFP documents need to be carefully scrutinized before they are issued by a municipality.

The fundamental goal of this process is to facilitate the understanding of the prospective suppliers as to what it is that the municipality is trying to buy. One lives for the day when some municipality wins the Nobel Prize in literature for its front end documents. However, even if that day is unlikely to come, there is no reason why documents should look and read like they have been put through the blender.

Stephen Bauld, Canada’s leading expert on government procurement, is a member of the Daily Commercial News editorial advisory board. He can be reached at

Procurement Perspectives: What is key in contractor and supplier relations?

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