After all the effort it has taken to prepare and submit the response, these landmines can not just put you out of contention for submitting a non-compliant bid, but — in the worst case — get you sued.
So before you start using up your business development budget and salivating over the potential revenue you could bring in, you might want to give some thought to the following points (which are in no particular order).
Words not to use when you respond to an RFP:
Something we sometimes don’t consider is the legal consequence that certain words can have. The word “ensure” — which just happens to be one of my favourite examples — creates implied warranties about the services being proposed that the bidding party could be held to.
The use of “ensure,” “insure,” “assure,” and the like can create a material term the breach of which could be grounds for termination for default if the proposal becomes part of the main agreement (which is also something to generally avoid agreeing to in a response).
Where the response is tied to the ultimate agreement, this can be particularly risky in a time-and-materials project because it can imply that the supplier is signing up for a fixed-price/fixed-time commitment. Notwithstanding the legal notice (discussed below), using words like “ensure,” “partner,” “best” (anything), “proven,” and the like should be avoided because of the risk of creating and being held to implied warranties.
“Best practices,” “best efforts,” and “lessons learned” are other terms to avoid because they impose strict legal obligations that may not be reasonable in the circumstances and could end up becoming the proverbial smoking gun if a dispute ever arises with the now client.
Include a ‘legal notice’
Nothing is bulletproof, but a good legal notice can go some distance with regard to aligning expectations and mitigating risk. A legal notice should, among other things, identify the specific proposal, the legal name of the proponent(s) submitting the bid, the framework under which the parties are expected to contract/transact, waivers regarding accuracy of information, and exclusion of express and implied warranties of any kind.
It should also indicate that terms are used in their common form and as defined in the notice (e.g. that “ensure” means to use commercial reasonable efforts).
Confidentiality expectations should be identified, trademark and copyright notices included, as well as the period for which the proposal is valid. Lastly, beyond the legal notice, it is a recommended practice (notice, I avoided the use of “best practice!”) to mark every page of your response with the appropriate proprietary notices regarding confidentiality and copyright. For example, “Copyright © 2012 Company Inc. All rights reserved. This proposal is proprietary and confidential to Company Inc.”
References to third parties and third-party intellectual property
When competing for selection, credentials are an important ingredient. This means that bidding parties may want to identify specific clients, recent relevant projects, show client logos for ease of reference, and so forth. What makes this exercise complicated is that in the absence of having the necessary consents in place, bidding parties put themselves at risk of infringing the IP rights of their clients (or other third parties) as well as potentially breaching existing contractual obligations. The long and short of it is, if you don’t have consent,think twice before mentioning client/third-party anything.
As trite as this will surely sound to some, following instructions can be the difference between being a qualified bidder and a disqualified one. If the instructions advise that there is a single point of contact with whom the parties can communicate, and a deadline for doing so, follow the instructions!
If the instructions aren’t clear — for example, the submission documents must be “bound” — ask the point of contact named in the RFP the question. It might mean Cerlox bound — but it might also mean that a three-ring binder, glue bound, and spiral bound are also acceptable.
You probably aren’t the only proponent with questions. Once asked, these get posted so the other bidding parties have access to the same information. Transparency being the operative part of a competitive bidding process. Makes sense right? Circumventing a process as seemingly straightforward as this can get you disqualified, and in the worst case, sued by other bidding parties. Sounds so obvious and yet, when there are existing relationships between senior levels of management, even the most innocent of conversations can put a bidding party in jeopardy.
Was the issuing party a government entity?
Governments have their own set of unique, and at times challenging, procurement rules. It is essential to be aware of what their “rules of engagement” are from the outset. If anything isn’t clear, ask the person identified as the point of contact for the RFP. Also, consider that access-to-information requests can (and likely will) be made by other bidders (read: competitors) so all dealings during the process should be carefully planned out and executed.
NDAs and teaming agreements
Is the proposal going to be a joint submission, or a submission by one on the part of a group? If it is the latter, do you have the necessary non-disclosure agreements in place to start your discussions and the appropriate framework agreements (e.g. a teaming agreement) in place on the basis of which to move forward with the preparation and submission of the response? Is it clear who will be the “prime” and who will be the “subcontractor(s)?” Are standard terms and conditions included in the RFP that need to be discussed as between the teaming parties so that flow-down provisions aren’t a show-stopper down the road?
Having even most of the roles and anticipated responsibilities identified up front is a key part of picking and signing a team that is going to follow through during submissions and thereafter if the team is selected as one of or the chosen supplier.
Depending on the size of the prospective engagement, issuing parties may engage third-party advisers to assist with the procurement process. These parties are retained to support the issuer of the RFP, which means that they aren’t necessarily going to facilitate the process for bidders.
Working with third-party advisers can be challenging if the issuer is not experienced in procurement or if the transaction contemplated is high impact financially/institutionally and the third-party adviser is positional and self-serving in his/her approach. Yes, even lawyers can be this way unfortunately. It isn’t all bad news though; a sophisticated third-party adviser will help his or her client navigate complex transactions and facilitate an outcome that is the foundation for a good client-service provider relationship.
It goes without saying that seeking legal input is a sensible thing to do, regardless of the size of the RFP.