To successfully execute a commercial construction project, the procurement and tendering process is your opportunity to lay solid foundations.
Both public and private sector organisations engage in these processes to secure the best possible services and goods at competitive prices, from building materials to marketing the scheme.
However, the legal intricacies involved can be daunting, especially for businesses unfamiliar with the regulatory landscape.
In this short guide, Supervising Director of Construction, Adam Davis, explains how to navigate procurement and tendering while staying compliant and delivering a great project.
Procurement vs tendering
In construction, procurement covers the entire process of selecting and appointing contractors, suppliers, and consultants for individual projects.
Tendering is a subset of procurement, in which you take the needs of your project to market and contractors submit bids to undertake specific construction tasks or projects.
The procurement process is governed by a range of strict regulations designed to ensure fairness, transparency, and efficiency.
Public and private sector tendering
There are distinct differences between public and private sector tendering.
Public sector projects often have more stringent requirements, governed by the Public Contracts Regulations (PCR) 2015 in the UK. This legislation encourages sustainable procurement processes through the promotion of SMEs, electronic communication and social mobility.
There is also a strict emphasis on accountability, requiring clear reasoning for awarding contracts to a specific supplier. Public bodies are also typically required to fairly advertise opportunities and be transparent regarding costs.
Conversely, private sector tendering and procurement is not bound by the same statutory requirements. However, scrutiny from shareholders and adherence to common law principles still govern the procurement process to protect against fraud and other financial losses.
The consequences of non-compliance
One of the major challenges in the procurement and tendering process is ensuring compliance with the relevant legal and regulatory requirements.
Missteps can lead to delays, increased costs, and legal disputes. This can even result in further contract disputes if you fail to meet agreed deadlines because of a procurement delay.
In all areas of procurement, disputes can arise if businesses do not approach the tendering process fairly, including if they are found to have failed to consider a compliant bid or misrepresented their intentions.
To avoid these issues, follow procurement best practices, including:
Legal considerations
Public or private bodies should seek advice from an experienced legal team for support managing the complex legal obligations of commercial construction procurement, including:
By engaging in thorough risk management, businesses and public bodies can protect themselves from disputes from suppliers, as well as any contract breaches that may be caused by delays in the project.
How can we help?
Navigating the procurement and tendering processes requires not only an understanding of the legal framework but also a strategic approach to manage risks and ensuring compliance.
We can advise you on how to fairly publicise opportunities to contractors, evaluate tender bids and award contracts transparently and efficiently. Should a dispute arise, we can provide guidance and representation through the mediation and litigation process.
For further support on putting projects to tender and the wider procurement process, please contact our construction law team today.
