We’ve put together 5 questions, (and answers), on variant bids which should be helpful to both buy-side and supply-side. I would be interested in any other questions (and answers!) you may have. I would also be interested in examples of where variant bids have offered solutions that are outside the box. Variant bids are an increasingly high profile facet of public sector competitive tendering as innovative solutions are sought to deliver radical solutions and deliver enhanced value for money. I sincerely trust that what follows will be deemed helpful. Please share this information with whoever you think will benefit from it.
Everything you wanted to know about variant bids in 5 Q&As!
Question 1. What do we mean by ‘variants’?
Answer 1. The Public Contracts Regulations 2006, Regulation 10 deals with ‘Variants’.
This states at (1) that where a contracting authority intends to award a public contract on the basis of the offer which is the most economically advantageous in accordance with regulation 30(1) (a) it shall indicate in the contract notice whether or not it authorises economic operators to submit offers which contain variants on the requirements specified in the contract documents and a contracting authority shall not accept an offer which contains a variant without that indication.
At (2) is states that where a contracting authority authorises a variant in accordance with paragraph (1) it shall state in the contract documents the minimum requirements to be met by the variants and any specific requirements for the presentation of an offer which contains variants.
At (3) it states that a contracting authority shall only consider variants which meet its minimum requirements as stated in the contract documents in accordance with paragraph (2). This reinforces the fact that the minimum requirements must be clear.
Question 2. What official guidance is available on variant bids?
Answer 2. The European Commission has published the ‘Guide to the Community Rules on Public Procurement of Services’ Directive 92/50/EEC. On the first page it states that ‘This guide has no legal value and does not necessarily represent the official position of the Commission’ (!).
On page 50 (6.1.4) there is some detail on ‘Offers containing variants.’ It is worth a read, noting that the highlights include:
- ‘Contracting authorities are obliged to state in the general or contractual documents the technical specifications of the services they are looking for. Nevertheless, it is important for economic operators and users that services may also be offered which do not correspond to those identified by the contracting authority but which satisfies its requirements.’
- ‘Subject to certain conditions, the Services Directive allows tenderers to propose variants. The first condition is that variants can only be permitted when the contract is awarded on the basis of the economically most advantageous offer.’
There is an absence of detail in this guidance.
Question 3. Are there any examples of variant bid practice here in the UK?
Answer 3.An ITT issued by the Department for Business Innovation & Skills stated:
‘You are encouraged to be innovative in your thinking when preparing your bid and to provide any suggestions and solutions that may provide a more cost efficient and value for money solution. Any such proposal which alters the requirements of the specification must be in the form of a variant bid, must be clearly marked “variant bid”, and must be submitted at the same time as the fully compliant bid requested in this ITT.
This approach has its merits although it is necessary elsewhere in the ITT to fully explain the tender evaluation model.
Question 4. Are there any examples of practice outside UK central government?
Answer 4. In researching tenders issued by local authorities we identified one that had more detail than the DBIS one at (3) above. There are four parts to the ‘Variant Bid’ section.
(1) XXX will only accept variant bids (at its sole discretion) if they meet the minimum specification detailed in the TENDER SPECIFICATION (or in the absence of defined minimum specification in the TENDER SPECIFICATION, meet and exceed all criteria of the TENDER SPECIFICATION).
(2) Variant tenders will be evaluated against the published evaluation criteria.
(3) Variant tenders submitted which do not meet the minimum specification detailed in the TENDER SPECIFICATION (or in the absence of a defined minimum specification in the TENDER SPECIFICATION) will be deemed non-compliant and not capable of acceptance by XXX.
(4) The variant bid must be set out in writing, as a separate document to the TENDER and accompanied by a new ‘Form of Tender’ submitted and marked “Variant Bid”. For the variant bid offered the full scope of the proposal, costings, delivery and, or, implementation timetable and/or other proposals must be submitted in accordance with the terms set out in the tender documents.
The clever part of this is the final sentence which can be usefully developed to deal with specific circumstances.
Question 5. Has ‘variants’ been tested in Court?
Answer 5. There is a relevant legal case in the High Court of Justice in Northern Ireland ‘Natural World Products Ltd v ARC 21 [2007] NIQB 19.
The judgment is 18 pages long and is founded on a variant bid not being evaluated properly. The unsuccessful bidder was supported by the Judge who determined that the contract could not be awarded and the authority must return to the evaluation of the variant bid. This emphasises the importance attached to the evaluation model and the manner in which the evaluation of any variant bids received.
Everything you wanted to know about variant bids in 5 Q&As!
The take-away: Variant bids are a useful tool in competitive tendering to promote (or to propose) innovation approaches…but ensure you take advice to manage the risks (and opportunities).
If you’ve found our Q&A on variant bids useful and would like to learn more about how we might be able to help you with your variant bid tendering processes please contact me on 01744 20698 and we can have an informal chat to discuss your areas of interest.
When you call, we’ll have a conversation to learn more about your needs and challenges, your objectives and priorities – and to see whether what we do seems to be enough of a fit to move forward.
If there’s a fit, we’ll set up a meeting, either by telephone or in person to do a more in-depth “discovery session” to really understand what you need and whether we can help.
Drop me a note to set up an initial phone discussion. I fully recognise that contacting consultants can sometimes seem like a daunting prospect – but try us, we don’t bite! Alternatively you can call me on 01744 20698.
Thanks
Ray
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