Article Data Management Loss Prevention

Successful Tender

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Question- Can a successful tenderer for a publicly procured project negotiate the terms of the contract post acceptance, but prior to contract award, in order to amend an obligation to indemnify the public body against all losses due to any breach of the appointment or failure to fulfil the obligations due under it, to an obligation to indemnify to the extent of any monies recoverable under the consultant’s Professional Indemnity (PI) insurance.

The public authority is arguing that (a) this would potentially be unfair to other tenderers and/or third parties and (b) such a limitation would be contrary to public policy in a public works consultancy agreement.  The consultant believed that by providing evidence of their insurance at tender stage, that was sufficient to limit their liability to the amount of the level of insurance (LOI).


  1. A public procurement body may fall foul of the public procurement regulatory regime if the contract which is ultimately awarded does not accord with the particulars of the contract which was described in the contract notice published in OJEU. Not every change will be significant. The test which is usually applied is whether the proposed changes are so significant that the altered contract, if re-advertised, would attract responses from tenderers other than those initially admitted or would have allowed for the acceptance of a tender other than the one initially accepted. This may be the case where one or more important features of the contract have been changed (e.g. as to value, scope, timing or financing arrangements).  I had not seen the contract notice, so I was unable to advise definitively but I provided some initial views on this particular case.
  2. A public procurement body may fall foul of the public procurement regulatory regime if the public procurement authority awarded the contract on award criteria which are different from those which it has stated will apply to tenders.  I discussed that in the context of this case.
  3. The public body was correct in stating that the consultant’s confirmation of the level of its insurance cover (and in particular the limit of indemnity on its PI cover) does not amount to offering to provide the services subject to the consultant’s liability being limited to the amount of its PI cover. The tender criteria sought details of the PI insurance in respect of the criteria relating to the commercial viability/strengths of the interested tenderers.  Unless a consultant expressly states that its tender is subject to the insurance recoverable being the limit of any liability which the consultant may have for breach of the contract , then the mere provision of the insurance details in the tender is unlikely to have that effect.
  4. The proposed limitation of liability provisions are not contrary to public policy.  It is well established that parties are permitted to agree to limit their liability.  For example, clause 82.1 of the NEC3 Professional Services Contract provides for a cap on the consultant’s liability. The consultant’s total liability to the employer for all matters arising under or in connection with the contract, other than excluded matters, is limited to the amount stated in the Contract Data & applies in contract, tort or delict and otherwise to the extent allowed under the law of contract.  This contract is part of the NEC3 suite of contracts which have received OGC approval and which are approved as satisfying the “Achieving Excellence in Construction” principles.
Article Business Practice

AGS Benchmarking Initiative gets underway

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After several false starts, the Business Practice WG has finalised plans for an AGS initiative to evaluate the quality of site investigations undertaken by Members. This will be the first time that an attempt has been made to qualify site investigation practice and the results are eagerly awaited.

The WG has identified 11 Key Performance Indicators (KPIs) and subsidiary headings:-

  • Appointment (Personnel, Responsibilities)

  • Preparation (Desk Study, Walkover Survey, Reports)

  • Design (SI Design, Laboratory Testing)

  • Risk Management (Risk, Availability of Information)

  • Procurement (GI Procurement Route, SI Award, Method of Measurement, Conditions of Contract, Specification)

  • Management (Project Management, Quality Management, Environmental Management)

  • Supervision

  • Reporting (Factual)

  • Reporting (Interpretative Report, Ground Model)

  • Outcome

  • Client Satisfaction

All AGS Members have been invited to participate. The number of projects that each participant will be asked to score will depend on the number of companies that agree to take part but will not be more than 10 (and probably less). It will not be necessary to identify the project being scored and the score of individual projects will not be revealed.

It is intended that once the initial benchmark has been set the exercise will be repeated annually to monitor changes in standards.

It is not too late to register as a participant. Please contact Jo Pascoe ( for further details.

Article Business Practice Data Management Executive

Electronic Tenders – The Future?

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A survey of Members in January/February 2003 revealed that a majority have some experience of tendering based on information provided electronically.   Responses were received from approximately one third of the AGS Member Firms.  Of these 20% had tendered for a contract over the internet; 38% had bought (construction related) products and services over the internet; 5% had sold products and services on the web; and 74% had tenders on information provided in an electronic format.

E-Procurement Survey of AGS Members experience

Tendering on the WWW (electronic auctions)                       20%

Buying products and services on WWW                                  38%

Selling products and services on WWW                                  5 %

Tendering based on electronic information                            74%

Of those that had tendered using electronic information 68% had experienced difficulties typical of e-tendering:  poor indexing; irrelevant information (ie information overload); and data that couldn’t be manipulated.  Leaving 76% of those with experience with the overall impression that electronic data did not save time.

This is particularly important when it comes to ground investigation data in AGS format which is intended to deliver efficiencies in both time and cost by eliminating the need to re-key information.  To achieve these efficiencies, data providers must address the need to supply data in a manipulable format (perhaps in addition to a *.pdf file) and to make routine use of the AGS Format logo (supplied to all registered users of Edition 3) to alert the data user that electronic data is available.

How can IT help the tender process?

Saving time?

Theoretically, yes.

  • Information can be efficiently shared internally and with bid partners
  • re-keying of data can be avoided
  • re-drafting (eg existing survey information sections, etc) can be avoided

Save printing costs?

Not really.  Cost is just passed down the chain to the user.

Reduce the tender period?

Not really.  Design development, commercial assessment, technical considerations and health and safety risk assessments are still necessary, and these are undertaken by people.


AGS Members appear to be increasingly comfortable with web technology and with conducting business transactions on the www.  However they are cautious about bidding for complex projects through electronic auctions, although this might be a suitable route for small, straightforward contracts, using standard terms and conditions. Certainly, Clients are showing increasing enthusiasm for this method of procurement and believe that it brings price savings.  Many people, however, recognise that it is contrary to the industry agenda for best value and partnering – and ultimately that quality might be affected.

Tendering based upon electronic information is widespread; but many of the intended benefits are lost because data is poorly indexed and insufficient thought has been given to the format in which it is made available. SI data, in particular, needs to be in AGS Format and transmitted in a way that the recipient can use it without re-keying.

The AGS Business Practice WG, in co-operation with other interested bodies, is working to improve this situation and is preparing a standard information protocol for geotechnical contracts to assist those preparing enquiry documents.

The AGS would like to thank those Members who took part in the e-procurement survey and contributed valuable information about the use and usefulness of this method of procurement.