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Bid Clarification and Post Tender Negotiation

Bid Clarification

Bid clarification is contact between the buyer and the bidder(s) purely for the purpose of clarifying aspects of the tender which are perhaps ambiguous or anomalous.

Once all tenders have been received, the buyer may wish to clarify some aspects of the bids during their evaluation (for example, if parts of the bids are unclear or contain minor errors). Buyers may also seek clarification from suppliers on matters of quality performance or particular terms and conditions of contracts.

During the clarification process, buyers will respect bid confidentiality and will avoid unfairness to potential suppliers. Negotiations in relation to price or other areas where improvements may be possible should not take place, and an audit trail is maintained to ensure that the process remains fair and transparent.

Post Tender Negotiation

Post-Tender Negotiation (PTN) is a separate exercise from bid clarification. PTN is contact between the buyer and the bidder(s) to refine and improve the bid(s) in order to ensure that prices, delivery or associated terms of the contract are competitive.

The potential areas for negotiation will differ for every contract but typical topics might include:

  • the terms of payment
  • quality of goods or services
  • supply and cost of spare parts
  • earlier delivery or completion dates
  • warranties and guarantees
  • documentation requirements
  • expediting and inspection procedures
  • maintenance and support, repair or after-sales service
  • compensation for failure to meet specified requirements (e.g. of delivery, quality etc); and
  • procedures for remedial action for unsatisfactory service.

At all stages the competing tenderers will be treated in an honest, fair and ethical manner, whilst retaining confidentiality of their bids. Post Tender Negotiations seek to make each individual bid as competitive as possible, without reference to any other bids. For example, buyers must not unfairly trade off one bid against another by using the lowest bid to seek a reduction in costs from the other bidders.

The key point is that buyers are required not to act in a manner that is likely to distort competition. It is important that all post-tender communicationis meticulously recorded and, above all, that proceedings are conducted in a manner which is not only fair, but which is seen to be fair by the relevant parties.

PTN is conducted after the receipt of formal tenders, and before the award of any contract. It is not used in all procurements, and when it is used an audit trail will be kept so that it can be seen that the PTN was conducted in a fair manner.

When carried out in an atmosphere of openness and mutual trust negotiations can strengthen relationships between buyers and suppliers because they allow a frank and open exchange of ideas and views on how best the requirement might be delivered.

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