On 9 December 2020 the Scottish Government Rural Economy and Connectivity Committee published its report on the “Construction and procurement of ferry vessels in Scotland”.
While the report primarily focuses on the procurement of two specific vessels, many of the points made by the Committee have wider application. Summarised below are some reminders of best practice which are of relevance to many if not all procurement exercises:
- Have clear project aims and objectives before launching the procurement.
- Establish at the outset who will be responsible for what (with clearly defined roles and responsibilities).
- Carry out a thorough financial health check of all bidders and insist on robust financial security where you are required to make staged or milestone payments in advance of receiving goods / services.
- Do not rely solely on historic track records and reputations of bidders; weave into your evaluation some consideration of their current and future capabilities.
- Make sure that tender submission requirements are detailed enough to let you assess the capabilities and overall suitability of bidders.
- Ensure that payment clauses give adequate protection – if at all possible, have independent sign off for milestone payments. Avoid having to pay for work which has been completed out of sequence.
- Before appointing the preferred bidder, make sure all commercial points have been agreed and clearly documented in the contract (which should by then be in a near-final form).
- Make sure that an acceptable minimum level of design is sufficiently clear, detailed and signed off by your technical team (and any relevant third parties) before work starts.
- Adopt a clear and effective dispute resolution process with a focus on resolving issues early, and stay alert to problems arising.
- Achieve an effective balance between risk and reward.
- Keep good lines of communication open between stakeholders at all times. Don’t wait until relationships have fallen apart before acknowledging that there is a problem.