The below article on Tender Process Risks and Strategies to Mitigate is the third article in our five-part Probity, Procurement and Tendering Article Series. This article will be followed by articles on Probity Plans, and lastly Contract Negotiations. This article explores strategies for minimising risks in the tender process, for both procurers and tenderers.
For procurers, we discuss key strategies for risks associated with:
For tenderers, we discuss key strategies for risks associated with:
We also discuss “Closing the deal” and the risks associated with:
This article on tendering and process contracts is the second article in our five-part Probity, Procurement and Tendering Article Series.
Requests for Tender (RTFs) have traditionally been viewed as invitations to treat, that do not create a legal or contractual obligation until a tender is accepted by the party inviting the tenders. However, a process contract can arise as are sult of a term within an RTF that constitutes an offer, which when accepted or complied with (generally by the tenderer submitting its tender) brings about a separate binding contract, or “process contract”. The implications of a process contract can be far reaching, due to the legal obligations that arise. As a result, the party inviting tenders must pay close attention to the tender process and draft the RFT to reduce the risk.
Managing process contract risk requires the procurer to:
In Queensland a Payment Claim must:
In the recent case of MWB v Devcon , the Contractor (Devcon) was engaged to construct 56 townhouses. They sent what they said was a payment claim to the Principal which purportedly claimed payment of $149,485.60 by reference to a table listing 42 trades and showing a ‘contract value’, ‘amount previously claimed’, % complete’, and ‘remaining balance’ for each trade.
The Court of Appeal found that the purported payment claim was not a payment claim under s68 of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) because it failed to comply with s68(1)(a), (b) or (c).
IOdeally, parties to a contract would always fulfil all their obligations. Unfortunately, for often entirely
innocent reasons, that is not always the case. Contract breaches remain a common challenge, with potential legal, financial and reputational consequences depending on their severity. This article explores the implications of contract breaches and strategies to address and mitigate
any resulting issues effectively.
This is article two in our 6-part series on contract law and administration. We started the series with a contract law refresher, with articles on time, payment and security of payment, legal implications of contract breaches and post contract award contract management to follow over the course of the next four weeks.
Contractual variations can assist parties to swiftly navigate unforeseen changes to a contract throughout the life of the project but can also cause major problems if not negotiated and implemented appropriately.
This is article three in our 6-part series on contract law and administration. We commenced our series with a contract law refresher followed by a high- level summary of contractual variations, with articles on payment and security of payment, legal implications of contract breaches and post contract award contract management still to come.
In Part 1 of this article series, we looked at strategies for adequately planning a procurement process, process contracts and managing risk in the planning stage. In part 2 of this article series, we consider the legal and probity implications for procurers and tenderers after the release of tender documents, strategies for procurers and tenderers, how to deal with conforming and non-conforming bids and closing the deal.
The dictionary definition of “probity” refers to honesty, proper and ethical conduct, uprightness and propriety in dealings with others. Good probity practices means ensuring that tenderers will be treated fairly, impartially and equitably, adopting and applying a consistent methodology in the assessment of tenders and ensuring a consistently applied and transparent process.
Tendering for contracts, whether as procurer or supplier, is difficult and requires each party to consider a number of different factors. In this article, we discuss the key considerations that procurers and suppliers must have prior to the release of a tender.
Procurement planning is an essential first step in the tender process and will assist in achieving desired procurement outcomes and in mitigating negative legal implications. When approaching the market for the delivery of a service, product or works, there a multitude of questions that a procurer should seek to answer. These questions will depend on the specific circumstances of the project and the market, but the broad questions that procurers should (at minimum) be asking themselves are as follows
Effective project management hinges on a comprehensive understanding of risk – its identification, management, and potential to create opportunities. Whilst it is tempting to view risk purely as a threat to project objectives, risk can present valuable opportunities and drive innovation. In this article, we outline a structured approach to risk management based on Australian standards and highlight the importance of embedding risk management practices into your organisation’s culture.
What is risk?
At its core, risk involves exposure to potential loss, injury, or adverse circumstances. The Oxford English Dictionary defines risk as ‘the possibility of loss, injury or other adverse or unwelcome circumstances, a chance or situation involving such a possibility’ or a ‘person or thing regarded as likely to produce a good or bad outcome in a particular respect’. Similarly, the AS/NZS ISO 31000:2009 Standard defines risk as ‘the effect of uncertainty on objectives’. Construction project risks manifest in a variety of forms, from financial setbacks to safety hazards, and can arise at any phase of the project life cycle.
Delivering a successful project requires more than just a concept, it demands meticulous planning, strategic execution and the selection of the right delivery method. In the Construction Industry, choosing the right project delivery model can mean the difference between success and costly delays or worse. From Construct Only, Design and Construct, Construction Management, Managing Contractor/Engineering, Procurement and Construction Management (EPCM), to Engineer, Procure and Construct (EPC) models, each method has unique advantages and challenges.
In this article we discuss Project Delivery including project terminology, pricing options, standard form contracts and a brief exploration of common project delivery methods, plus more complex Alliance Contracting and Financed Projects.
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Muscat Tanzer, founded by Paul Muscat and Craig Tanzer, is a specialist law firm on the Gold Coast providing expert legal services in infrastructure, construction, procurement, probity, commercial, and government law across Australia. Committed to growth and excellence, the firm continues to expand its team and fosters future legal talent through internships and graduate opportunities.
