Article Data Management Loss Prevention

Successful Tender

- by

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 Data Management

Electronic tenders – What has changed in the last three years?

- by

A survey of AGS members in 2003 revealed that most respondents (74%) had tendered for work based upon information provided in an electronic format but few had purchased or sold construction related products online, and only 20% had experience of electronic auctions.  A similar survey was conducted in the autumn of 2006 of both AGS and FPS members. Had anything changed and is the experience of AGS Members and FPS members the same?


E-Procurement Survey
2003 2006
Members Experiences AGS AGS FPS
Tendering on the www (electronic auctions) 20% 24% 71%
Buying products/services online 38% 42% 36%
Selling products and services online 5% 9% 0
Tendering based on electronic information 74% 72% 100%


The results of the recent survey show that the level of buying and selling construction related products online has remained about the same and is broadly in line with the experience of FPS members. Similarly, the number of respondents tendering based upon electronic information has remained about the same and is consistent with FPS members, although FPS members seemed to tender based on little other than information provided in electronic format. The area showing the largest difference between FPS and AGS members was in the use of electronic auctions. Over seventy percent of FPS members had some experience of electronic auctions whereas the number of AGS members with experience of electronic auctions had increased but was about the same as the findings in 2003.  The results show that the use of electronic auction is high in the world of specialist contracting but is still in its infancy in other parts of the industry.  Nevertheless, both FPS and AGS members remain cautious about the all round benefits of electronic auctions but remain enthusiastic about the use of electronic information in the tendering process but only if, as will be seen below, some of the basic indexing issues are addressed.

Tendering based upon Electronic Information

The results indicate that for AGS members, very little has changed in respect of e-data.  Electronic tender information is routinely provided by some clients – but only 50% of consultants have ever received it (and of those, only half receive it for more than 50% of tenders.)  All contractors (AGS and FPS) have received electronic data with an enquiry at some point, but even they, receive it on average only 30% of the time.

When it is available, electronic data arrives on CD about 90% of the time for piling contractors, but SI contractors and consultants are more likely to be the recipients of emailed data (50%-100% of all e-data).  (This is a change from 2003 when AGS members received email data only 12% of the time).

In 2003, 68% of those using electronic information had experienced difficulties typical of tendering based upon electronic information:  poor indexing; irrelevant information (i.e. information overload); and data that could not be manipulated.  Had the situation improved in 2006?  Not a lot.

Respondents were asked to report on the last enquiry they had received that contained electronic data. All Piling contractors complained that the data they received was poorly indexed, and generally only 25% was relevant to the project.  Virtually none of the data could be manipulated.  Anecdotal evidence elsewhere indicates that even when AGS Data is received it is likely to be in PDF format.  In a separate study of SI reports received by FPS Members over a 3 month period – not one of the SI’s sampled had AGS Data1.  Not surprisingly, only 2 contractors (one AGS and one FPS) felt that electronic information saved time.  Clearly there is considerable room for improvement.

AGS members seem a little more fortunate.  Indexing is rated slightly better; 50-75% of the information is likely to be relevant; and occasionally the format can be manipulated.

The joint FPS and AGS electronic tendering protocol may be found on and respectively.

Electronic Auctions  

Since the last survey, both the AGS and the FPS have published position papers questioning the usefulness of e-auctions for the award of geotechnical service contracts.  Despite the relative infrequency of e-auctions, Members of both Associations have strong negative views about their use:

“E-Auctions are inappropriate for professional services and work where the extent is uncertain or cannot be accurately quantified in full at the outset.”

“Terrible, to be avoided if at all possible”

“Recipe for disaster.  Will encourage firms to reduce margins to unsustainable levels and takes no cognisance of the quality of bid or any qualifications thereto.”

“Not appropriate to specialist services with considerable design input/risk.”

“Completely inappropriate for the procurement of specialist services. Does not promote value engineering or innovation.”

The FPS and AGS position papers on the use of electronic auctions may be found on and

Does IT help the tender process?

The jury is still out.  AGS members and their FPS counterparts appear to be comfortable with IT and with the use of the internet for the transmission of data but remain to be convinced of the benefits of electronic auctions.  The expected benefits are, however, a long time coming and there is little evidence of measurable progress over the last 3 years.

Work is now underway in the Business Practice WG to try to understand the process in more detail.   Although it is thought that AGS SI contractors are able to produce AGS data, and many do so routinely, there is little hard evidence to support the view and this will be addressed via a survey in 2007.

FPS Members are now increasingly requesting, but not getting, AGS data and discussions are underway between the AGS and FPS to look for a solution to the communication ‘log jam’ that prevents the flow of information between the SI contractor, SI consultant and the piling contractor end user.

Without doubt, there is room for improvement at all stages and by all participants if information is to flow smoothly throughout the project from SI to as built pile records.  Some aspects are outside AGS influence and control – other areas are already being addressed.  Most people are aware of the potential benefits but the evidence suggests that over the last 3 years progress towards the ideal has been slow.

  1. Presentation at AGS Members’ Day 2007. ‘How useful is the typical geotechnical report – an evaluation by the FPS’ Derek Egan, Keller Foundations