Public Procurement in Switzerland – Tender documents are not always perfect
The “race to the new fighter jet” for the Swiss Air Force has started. Potential bidder have already hired offices in Berne. Politics is alerted and politicians have risen their fingers and request a professional and in all respects correct tender process. There is no doubt that this will be the case. Recent developments have confirmed that the Swiss authorities have become even more sensitive in that regard.
However, nobody is perfect. Even the Swiss authorities are not. A very important recent procurement project may serve as an according example:
The request for tender looked perfectly. The well-known eligibility and technical criteria were as clear and tough as always and the tender documents seemed to be complete and stringent as one can expect. The tender documents did, however, not include a draft contract.
Several bidders submitted their bids on time. The award was granted to the successful bidder fully in accordance with all applicable laws and regulations. Together with the award the bidder received a draft contract including a number of draft annexes. According to the draft contract the supplier shall submit a parent company guarantee and all software source codes shall be deposited with an escrow agent. This sounds standard, especially for a project of such magnitude.
However, the tender documents were not requiring neither a parent company guarantee nor an escrow agreement! The request for any security has even been expressly excluded in the tender documents. A reason for this situation could have been the fact that between the issue of the request for tender and the award of the project the successful bidder has been taken over by a big industrial group. Before that take over neither a parent company guarantee nor an escrow has been an issue. But the fact remains that the tender documents deviated from the draft contract.
It may be a bromide but the case shows that it is important to compare in detail any draft contracts submitted by the procuring authorities with the tender documents. This applies especially if such draft is only provided after or together with the award. The detection of discrepancies or gaps between the tender and the contract may considerably enhance a negotiation position.