Ahmed's Blog

Tenderer's Exploitation of Poorly Drafted Tender Documents

Errors and discrepancies in tender documents are a major source of disputes, especially if not remedied early on before entering into a contract. Common errors include ambiguities arising between contract clauses, such as stating that the contract is a lump sum, but including provisions for re-measurement.

It is becoming increasingly common for contractors to endeavor to recognize such errors, omissions, discrepancies, and ambiguities in the tender documents, such that they could submit a lower tender, relying on potential claims during the course of the project.

While this act of exploitation is a clear act in bad faith, and it causes tenders not to be on the same basis, contractors may argue that all tenderers have the chance to exploit such mistakes. Another common argument is that, in theory, the employer will end up paying the same amount regardless of the exploited errors.

There are two fundamental flaws, in my opinion, in these arguments:

  1. An error identified early on during the tender and subsequently its cost is included in the tender, will be recovered by the contractor at more cost (to the employer) by means of a claim during the course of the project. This is the reason why many contractors would not notify about errors in the tender documents during the tendering phase. Additionaly, these claims made during the course of the project will, most probably, also include an extension of time, while no additional time will be added for the costs for errors that are made for in the tender.

  2. A more serious implication is that a claim made by reason of errors in the tender documents would reflect directly on the professional competence of the party/parties reviewing the claim, which is commonly the employer and/or the engineer. This would render such claims difficult to resolve amicably.

Employers and engineer have several methods with which they could avoid or minimize such price exploitations:

  1. Identify early on such mistakes by scrutinizing the tender documents, and issuing amendments to the tender documents prior to the tender submission date

  2. Carefully studying and comparing tender prices, and investigation of excessive variations between the tender prices.

However, contractors could assist in avoiding these issues by notifying the employer of any discovered error. The employer should then rectify such errors and notify the other tenderers. This way exploitation will be minimized, and also the potential disputes that may arise from malicious exploitation.