Improving Public Procurement Efficiency – Applying a Compliance Criterion
24 Public Procurement Law Review 63-77 (2015)
18 Pages Posted: 25 Jul 2017
Date Written: March 16, 2015
One of the main issues that arises in the context of competitive public procurement is the treatment of a defective bid. Under current law, such bids will be rejected more often than not, and can be ignored without sanction only in exceptional cases – when the flaw is merely "formal". The rationale behind this policy is that ignoring non-compliance with the solicitation demands is unfair, endangers integrity, violates equality, and in the long run jeopardizes the efficiency of the competitive procurement process. However, this policy is also very costly – often resulting in the loss of the best bid, an increase in bidders’ transaction costs and the creation of undesired incentives for procurement officials. This article suggests a simple and effective remedy for the problem: recognizing the ability of contracting authorities to establish a “compliance criterion” which allows a defective bid to remain in the competition after being corrected by the bidder, subject to a score reduction. The types of defects for which correction will be allowed and the amount of the reduction for each such defect would be pre-determined in the solicitation documents. Adoption of this proposal is expected to enhance the efficiency of the public procurement process, without endangering its other goals – integrity, fairness and equality.
Keywords: Defects; Public procurement procedures; Rectification; Tenders
Suggested Citation: Suggested Citation