Route 2 - Post Tender Clarification - Post Tender Negotiation

PostTender Negotiation (PTN) should not be confused with 'tender' or 'bid clarification'. Tender clarification, explained in the previous station, is contact between the Procurement Officer and the bidder(s) purely for the purpose of clarifying aspects of the tender which are perhaps ambiguous or anomalous.

PTN is contact between you and the leading tenderer (possibly multiple leading tenderers if awarding a procedure such as a multi-supplier framework) with a view to improving or enhancing Value for Money (VFM). PTN is conducted after the receipt of formal tenders, and before the award of any contract. It is the role of the Procurement Officer to ensure that any PTN conducted does not change the outcome of the competition.

Competition should not be distorted by allowing a tenderer, not clearly in the lead, a chance to improve its offer. Nor should any changes be made which would result in a contract being awarded on terms more favourable to the tenderer. PTN remains a stage of the procurement process and, as through the rest of the procurement exercise, the competing tenderers must be treated in an honest, fair and ethical manner, whilst retaining confidentiality of their bids. PTN as part of the competitive tendering process may be used to refine and improve the bid(s) from the preferred bidder(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 be 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.), Sustainable Procurement, possible Community Benefits and procedures for remedial action for unsatisfactory service. This list is not meant to be exhaustive and any negotiation process will require you to define the points most relevant to both the procurement exercise and the specific bid under negotiation.

PTN  should be a controlled and documented process. It should not be used automatically on all procurements. Before engaging in PTN, the following criteria should be met:

  • there should be a considered and soundly based prospect of improving value for money;
  • the approval of senior management must be sought in advance of any PTN  initiation or activity.

A clear "audit trail" should be available so that it can be seen that the process was conducted in a fair and transparent manner. The PTN record should show:

  • the justification for PTN
  • the approval for PTN (at a suitably senior level of management)
  • the aim of the negotiation
  • the precise record of all exchanges written and verbal – this should demonstrate that the negotiations were conducted by trained and experienced purchasing staff
  • the approval for the award of contract

When carried out in an atmosphere of openness and mutual trust negotiations can strengthen relationships with bidders.

Any documents you need are listed below:

Negotiation Process (file type: doc)

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