For some tenders, you’ll notice that a Master Services Agreement (MSA) or Draft Contract has been included in the set of documents provided.
A draft contract is the first opportunity to closely look at how a potential client does business. A contract with mostly reasonable and standard contract clauses gives the impression that the work required is also standard and that the client has down-to-earth expectations.
These sort of contracts exist in the form of MSAs, agreements that streamline future contracts with a set of consistent requirements.
On the other hand, a contract that is highly unique (non-standard) and written in legalese (ie. Hard to read) should be viewed with caution.
These legal documents are incredibly important for any bid. All businesses prior to serious tendering should engage with a lawyer (if you do not already have one). Their legal expertise is important with contracts as you are likely to accept unfavourable contract terms should you not be legally trained and interpret and negotiate on your own.
As you read through the questions that you’ll need to respond to, you’ll notice the following sections:
Specification Conformance: For highly technical jobs, it’s important that the client knows that you actually agree to what they require. Certain requirements may be beyond your capabilities or you may feel that there is a better (and cheaper) way to do things or avoid doing them entirely.
In response to this, completing a conformance statement demonstrates whether or not you actually comply with the contract itself.
Most conformance statements are tabulated statements. These are when the specification has been split up in to separate clauses. Each clause is then put in to one table row by row. From here, you are required to explicitly state:
- If you comply or do not comply
- And if you do not comply, an explanation for not doing so.
Upon evaluation, the client will then closely review these tables and factor in your level of compliance. A high degree of compliance will be interpreted in a way that you agree to the specification and will do it as per the client’s wishes. On the other hand, a high degree of non-compliance towards the specification may be viewed with reservation by the client. To counter this, your explanations need to be on point and highly factual to address these concerns.
You must clearly explain why you wish to deviate from the specification and the benefits of doing so. If you fail to emphasise these benefits, your bid will likely not win. Remember that you are not rewriting the contract in this question. You are only stating how compliant your organization is to each criterion set through the specification.
Proposed Contract Departures: Unlike a conformance statement, contract departures are ‘opportunities’ for tenderers to rewrite the contract towards a more favourable position.
Tabulated statements are also used for this section. But instead of splitting out the specification, only the clauses that you take issue with are included in the table.
Usually on the left column in the statement will be the clause you wish to amend. In the right hand side column will be your amended statement.
After submission, the client and their lawyer will review this section and determine if your proposed amendment is acceptable.
As a response, if the client approaches you with a need to discuss any contract departures, I’d consider it a good sign. No client will waste time discussing and negotiating contract clauses with someone who isn’t likely to win.
Regardless, while it may be expensive, it would be wise to get an experienced lawyer to review the draft contract/MSA. At least the first time round. The reason for doing so is that someone who is untrained in contracts will lack the context and background knowledge behind why clauses are ‘worded’ the way they are.
That is for a lawyer to help explain.