Selection of contractor and conclusion of contract
(Правовое руководство по составлению строительных контрактов)
There are two basic approaches to the conclusion of a works contract. Under the first approach, the purchaser invites tenders from enterprises to construct the works, and the contract is concluded on the basis of the tender selected by the purchaser through formal tender procedures. Under the second approach, the purchaser negotiates the contract with enterprises selected by him without formal tender procedures. The purchaser may not have complete freedom to choose the approach he wishes to adopt in concluding the contract (paragraphs 1 to 3).
The tendering approach may be implemented through the open tendering system or the limited tendering system. Tenders may be restricted to those of enterprises which have been qualified by the purchaser in accordance with pre-qualification procedures. The open tendering system, under which all interested enterprises are invited to submit tenders for the construction of the works, provides competition among enterprises but may also be the most formal and costly of the procedures for the conclusion of a works contract. The limited tendering system, where only certain enterprises are invited to submit tenders, allows for some competition, but usually less than under the open tendering system. Negotiation of the works contract with a number of potential contractors or with only one such contractor may avoid the need to adopt the formalities of the tender procedures (paragraphs 5 to 9).
The legal rights and obligations of parties engaging in tendering procedures may be regulated by mandatory rules of the applicable law or by the rules of a lending institution financing the project (paragraph 10). When the open tendering approach is adopted, it may be appropriate to require potential tenderers to pre-qualify in order to limit the number of tenders to be considered. An enterprise applying to be pre-qualified may be required to complete a questionnaire which seeks to elicit relevant information about the enterprise. On the basis of the replies to the questionnaire, the purchaser may select enterprises in accordance with criteria for pre-qualification which have been established by him (paragraphs 11 to 14). When the purchaser has sufficient information about the works to be constructed, he may invite tenders from those enterprises whose tenders are solicited. Under the open tendering system, the invitation is communicated by means of an advertisement, which may be circulated internationally or more restrictedly. Under the limited tendering system, the invitation to tender is sent individually to enterprises selected by the purchaser, accompanied by a full set of documents to be provided to prospective tenderers (paragraphs 15 to 18).
The documents to be provided to prospective tenderers usually include instructions to tenderers conveying information with respect to the preparation, contents, submission and evaluation of tenders, and model forms of the documents which are to be submitted by the tenderer with his tender (paragraph 19). The instructions may specify all the purchaser's requirements in respect of the tenders, including the criteria they must meet to be successful. Where model forms of the tender documents are not supplied by the purchaser to tenderers, the purchaser's requirements in their regard may be set out in the instructions. It is desirable for the purchaser to prepare the contractual terms that are to form the basis of the works contract and to supply them to tenderers. The purchaser may wish to consider requiring tenderers to submit a tender guarantee meeting specified criteria (paragraphs 20 to 30).
Tenders are usually opened in the presence of the tenderers or their representatives or in public. A private opening, without the tenderers being present, may be justified by exceptional circumstances. After tenders are opened, they are compared and evaluated with a view to identifying the tender which complies with the purchaser's requirements and is most acceptable to him. The purchaser then proceeds to select the successful tenderer. The purchaser may, in certain circumstances, reject all tenders (paragraphs 31 to 43).
Under the negotiation approach, the purchaser contacts one or more enterprises which he judges to be capable of constructing the works, informs them of his requirements, and requests offers. Documents describing the scope of the construction and main technical characteristics of the works required and containing the contractual terms required by the purchaser may be submitted to the enterprises. No formalities are usually required for making or evaluating the offers, or for negotiating the contract. In certain circumstances the purchaser may be able to combine the tendering and negotiation approaches (paragraphs 44 to 47). The parties may find it advisable to reduce their agreement to writing. The parties may also wish to agree on when contractual obligations between them are to arise, either on their entering into the contract or as from the date when a specified condition is fulfilled (paragraphs 49 and 50).