What can the client of the work legally do if the offer received is alarmingly cheap or the mind is troubled by the suspicion of the contractor's dishonesty? The legal expert emphasizes the importance of the contract negotiations held before accepting the offer.
Text: Hanna Moilanen
If something seems too good to be true, it usually isn't. The old wisdom also applies to public tenders. If one offer is significantly cheaper than the others, alarm bells should be ringing in the subscriber's ears.
It may be an accident, i.e. the bid calculators have forgotten to include some part of the whole being offered.
Sometimes the subscriber may have reason to suspect that the cold players have gone on the move.
Whatever the situation, there is bound to be trouble unless it is addressed. But what can the subscriber legally do when doubt starts to creep into his mind while browsing the offer left by the winning candidate?
"In light of the new Procurement Act, the customer not only has the right but also the obligation to find out what the exceptionally low price is based on", INFRA ry's legal and labor market manager Kimmo Laukkanen seal.
If any part of the offer has been forgotten, it should be rejected completely. According to the law, the offer cannot be changed afterwards. In general, even the provider does not feel bad about being rejected in a situation where the provision of the service would turn out to be a heavy loss due to a calculation error at worst.
Even if there is no calculation error, the customer can reject a suspiciously low offer. However, he must be able to justify why he cannot handle the job at the price offered. In addition, the customer must consult the offerer and give him the opportunity to justify his offer before making a rejection decision.
Invest in contract negotiation
Sometimes everything looks good on paper beforehand. Later, it is noticed that the winner of the contract does not perform his duties and fails to pay his subcontractors.
Such a situation was in the background when the technical director of a municipality vented his mind to his colleague. The listening party said that they had struggled with the same entrepreneur years before. However, the information had not spread between the municipalities.
The customer is often in a difficult middle position. In principle, the decision should be made on the basis of the tender documents. Vague rumors or intuitive suspicion are not yet sufficient grounds for rejecting an offer.
Kimmo Laukkanen advises customers to hold contract negotiations before confirming the winner of the tender. The negotiation takes place in a bid comparison with the one who submitted the best bid.
"During the negotiation, it is ensured that both parties have the same view of what we are doing," says Laukkanen.
If the views turn out to be too different, it may lead to the rejection of the offer. Next, the contractor who was initially ranked second is invited to the negotiation.
The customer can also reject the offer when the offerer has committed a serious error in his professional activities. For example, if the previous contracts have been long, the quality has been poor or the behavior of the responsible persons towards the customer's representative has been substandard, the offer can be justifiably rejected. However, there must be clear evidence of errors.
"In one case, the company's offer was rejected because it had not been able to pay its subcontractors properly in the previous contract," recalls Laukkanen.
Don't demand too much
One way to ensure the reliability of the authors is to require references from the successful completion of previous similar contracts. In addition, conditions related to competence, work experience and education can be recorded in the request for tenders for key responsible persons.
This provides evidence of the provider's reliability and ability to handle similar tasks. However, it is a double-edged sword. The tougher the requirements are placed on the contractor, the harder it is for new and small companies to compete for contracts.
"Individual reference and professional requirements can be justified. However, when they are put together, such combinations can be created that even big corporations don't have", Laukkanen estimates.
If, on the other hand, a young employee is required to be responsible for a specific task throughout the contract period, his career development may become bored with it.
According to Laukkanen, the contract should define under what conditions the manager of a certain responsibility can be changed.
"Using common sense and reasonableness are good principles. The client should not think that he should get the best possible factors for every object. Good should be enough."
One way to increase reliability is to ask to name the subcontractors already in the offer. It creates faith that the work will also be done in practice. In addition, the collective spirit is preserved better when the winner of the contract does not tighten the pricing of the subcontracts to the extreme after the tender.
In the request for tenders, minimum requirements can also be presented for the work to be carried out by the tenderer's own organization
and on the machine base. Then the winner of the tender cannot outsource all the work to subcontractors.
A transparent measure for quality assessment
Navico Oy has developed a quality promise model for procurement of maintenance contracts. In principle, it is suitable for any procurement of services, whether it is the social and health sector or road maintenance.
In the model, the provider gives itself quality points for the criteria defined by the customer. It is easy for the customer to add up the points instead of scoring the quality plans sent by the contractors.
"In the light of my own experience, municipalities do not dare to make sufficient differences between providers when evaluating quality, because they fear unequal treatment. In this way, the importance of quality is easily diluted and the competition turns into a price competition", says Timo Perälä, CEO of Navico.
In the quality promises of maintenance contracts, points have been given, for example, for the degree of subcontracting and the appointment of contractors in advance. You get more points for the lowest degree of subcontracting and the higher degree of naming subcontractors.
According to Perälä, this has improved the position of local companies, which many municipalities consider important.
The customer is responsible for thinking about the relevant criteria.
"Even the losing contractors have said that the model is transparent," Perälä adds.
A detailed quality plan will be made later with the winner of the tender. The bidding phase
it should be possible to monitor the fulfillment of quality promises during the contract period with clear metrics.
The subscriber creates a market with his choices
The success of the purchase is above all the responsibility of the customer. It is necessary to prepare a good request for tender
extensive expertise.
"Subscribers should understand that they are creating a market with the purchases they make", INFRA's Kimmo Laukkanen
highlight.
The revised Procurement Act emphasizes the position of small and medium-sized companies in particular.
"This is just a recommendation, so you can't complain about it. However, I believe that the issue will be monitored on a political level",
Laukkanen says.
Markets can be created, for example, by gradually opening the maintenance of roads and streets to competition
district at a time. In this way, smaller companies can participate in submitting bids.
Little by little, local small producers are getting references for themselves. They are able to expand their operations,
to employ people and respond to larger requests for tenders. The success of local companies contributes to strengthening the municipality's economy. In a way, you can also think that the municipality is cultivating good and reliable partners for itself.
"If the whole thing is tendered at once, only a few bidders in Finland will be able to take it on," Laukkanen sums up.
The story was published in Infra magazine 1/2017.
Watch out for dark spots, choose carefully. INFRA's member companies are committed to the industry's ethical rules of the game.