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1. Which tenders should I submit for a legal review?

All tenders, but particularly those that contain a draft contract, should be submitted for legal review, regardless of the size or value of the contract or the length of the contract term. It’s important to remember that the main purpose of reviewing the tender contract is to manage legal risk. The risk associated with a contract is not necessarily commensurate with its value or length of term. Any contract could expose you to potential liabilities (which may or may not be covered by your insurance) that could conceivably exceed the profit you expect to earn from the contract. It should also be noted that a contract (commonly known as a ‘process contract’) may be formed as a when you submit your tender, based on the tender terms and conditions.

2. What areas of Australia does the Tender Lawyer Cover?

The Tender Lawyer can review contracts involving transactions in all Australian State and Territory jurisdictions. Contract law in Australia is, for the most part, based on the common law, which is more or less the same across all Australian jurisdictions. The Tender Lawyer has online access to legislation and Court decisions for all Australian jurisdiction.

3. What documents should I send the Tender Lawyer to review?

The most important document is the draft contract, followed by the request for tender and scope of works. If you can, however, it’s best to send the entire tender package to the Tender Lawyer. The Tender Lawyer’s advice (especially any departures that the Tender Lawyer drafts) will always be tailored to the context in which the tender is issued, including the nature of the goods and services to be provided, the length of the contract, the identity of the principal and various other contextual factors.

4. What will it cost for the Tender Lawyer to review the tender documents?

Detailed price information can be found here. The Tender Lawyer’s prices represent fantastic value for money, when compared to prices charged by other lawyers and considering the Tender Lawyer’s extensive experience.

5. Wouldn’t it be smarter to wait and see if I win the tender before paying legal fees for a contract review?

No, that would be dumb! Once your tender is accepted it’s generally too late. In the absence of any stipulation to the contrary in the tender conditions or the RFQ a contract is generally formed when the principal communicates acceptance of your tender, even though the contract has not been signed at that point. The terms of the contract will be as per the draft contract that was included in the tender package. Although the principal may be willing to negotiate contract changes after that point, you cannot insist on it. If you want to make changes to the draft contract the proposed changes should be submitted in the form of contract departures and/or commercial and technical exceptions submitted as part of your tender.

6. What industries does the Tender Lawyer work with?

The Tender Lawyer reviews all types of contracts and tenders in any industry. However, the Tender Lawyer has particular expertise in industrial services, waste management and environmental services, facilities management, equipment hire, logistics, professional services and construction-related contracts.

7. What’s the likelihood that I will be able to negotiate changes to the tender contract?

No guarantees can be given and it’s really up to the principal. Having said that, if the principal likes your price and you’re your profile, the principal will be more willing to negotiate contract terms. Most tenders these days include a ‘Compliance Statement’ section which usually contains a departures template. This indicates that the principal is inviting departures and logic suggests that the principal would not invite departures if the principal was unwilling to negotiate the contract terms, at least to some degree. You will have a better chance of effecting changes to the contract if your proposed changes are reasonable (i.e. they significantly alter your risk) and not merely pedantic legal technicalities. Drafting departures is as much an art as a legal science, and the Tender Lawyer’s approach to what issues get included in the departures may vary depending on the tender context. It’s important that departures are clear and concise, are supported by a sensible and reasonable rationale and are accompanied by suggested wording changes to the contract.

8. Will submission of contract departures/exceptions affect my chance of winning the tender?

In the Tender Lawyer’s experience, submitting departures will not, of itself, diminish your chances of winning the Tender. In fact, the opposite can be true. If you raise an important issue and provide reasonable explanation, this may work in your favour, especially if it’s something that none of your competitors have raised, because it projects a professional and alert image. And of course, if you don’t ask, you won’t get!

9. If the proposed tender contract is based on a recognised standard template (such as an AS contract), won’t it be fair and reasonable as it is? Do I really need to have it reviewed and, if so, can it be amended?

Standard contract templates are never entirely fair and reasonable from a contractor perspective. Most AS contracts are drafted for use in the construction industry. One of the most common problems encountered by the Tender Lawyer is the use of AS contracts in tenders for non-construction services. Also, in some cases the ‘flavour’ of the contract favours the principal more than it does the contractor. Furthermore, research commissioned by the University of Melbourne in 2014 into the use of standard form contracts in the construction industry (where AS contracts are the most widely used) found that more than 75% of these AS contracts are amended from the original template prior to execution. DOWNLOAD THE DOCUMENT HERE.

10. Can we increase our tendered rates and prices during the term of the contract (other than by “variation” claims)?

Only if the contract expressly gives you the right to do so. Many contracts neither prohibit nor expressly allow price adjustments, in which case prices will be fixed for the term. Some contracts expressly prohibit price adjustments during the term. Other contracts allow for “rise and fall” by reference to a price adjustment mechanism or formula contained in the contract (or in the price schedule tendered by the contractor). In short-term contracts, price adjustments are rarely an issue, but if you are providing services under a longer-term contract (e.g. more than one year), you will almost certainly want to be able to increase your prices to keep pace with inflation at the very least. Bear in mind that you may want to reference different adjustment methods or indices depending on the nature of the fee. If your fee represents a labour (wage) component on an hourly rate, then a wage index may be appropriate. If your price includes miscellaneous input costs plus a profit margin, then an “All-groups” CPI index is probably sufficient. You do need to be mindful, however, of any major input costs that are liable to change significantly over the term of the contract, which could result in a dramatic decrease in profit margins if the increase is not passed on. A good example of this is waste management contracts, which generally pass on disposal costs to the customer, either as part of the overall service fee or as a separate disposal fee component. If, for example, the Government introduces a new waste management (EPA) levy which is significantly in excess of CPI, you will want to be able to pass on this cost component to the customer other than by reference to CPI. In Queensland for example, the foreshadowed 2019 waste levy is expected to have the effect of doubling landfill costs overnight. Waste management providers whose contracts do not allow them to pass on this cost increase to the customer could find themselves chained to a long-term loss-making contract.

11. Does the Tender Lawyer provide other legal services?

The Tender Lawyer is a service offering from Legal Advantage Pty Ltd, trading as Legal Advantage Lawyers & Consultants. Legal Advantage also provides a wide range of other commercial services including drafting and reviewing corporate and commercial contracts (e.g. consultancy agreements, share sale agreements business agreements, shareholder agreements, owner-driver agreements, employment agreements, supply agreements, trading terms & conditions, credit account applications and guarantees & indemnities), debt collection, commercial litigation, licensing and compliance services and general commercial legal advice an corporate consulting services.