Do vendor lawsuits put you off?

 By Paul Snell

As a journalist you quickly learn there are certain people you should be extra careful with when writing about or interviewing them because they have a reputation for being litigious.

It made me consider whether this is ever a consideration for buyers when selecting a supplier. Evidence suggests that challenges to procurement processes from suppliers have increased during the economic downturn.

But if a vendor had successful challenged a procurement with another client, would that put you off inviting them to tender? Would their be any solidarity in the procurement profession, which may essentially “blackball” a vendor?

I guess the difficulty would be the justification of excluding them from the tender process (after all, you wouldn’t want to give them an excuse to challenge). For a private sector firm this shouldn’t pose too much of a problem, you can just invite whoever you want. But in the public sector, EU procurement regulations make this far more difficult.

Could you justify excluding a supplier from a tender based on their past legal action with other clients?

Comments

[Cristian Martin]

So long as the procurement process has been done correctly, there would be no reason for a challenge. Selection criteria is now a legal requirement to be included in tender documents and I see no problem showing a supplier a score card with suppliers names removed. It would be case closed.

If their history is that they challenged a process and won, the courts would have looked at the detail and the supplier would of deserved the contract over their competitors.

I fail to see a problem, and would not seek to exclude anyone from a free and fair process. I would not be working to the best interests of my company if I were to tamper with the process.

[charlie]

The PQQ and ITT would have sections requesting the vendor to provide references.

Risk management processess would want you to ensure you find out what relationship the vendor had with previous customers. You may have weighted this section of the evaluation heavily depending on your needs. This in itself would not justify excluding the vendor based on their past legal actions against other clients, but you would wonder whether those clients, if called upon to provide references, would be forthcoming with praise!!!The quality and relationships would have surely suffered during the litigation process.

The vendor may therefore end up scoring a lot lower in the reference checks section compared to other vendors.

[bitter and twisted]

Let me get this straight.

The poor public sector buyer has to show the market the tender selection criteria.

And then, if a total spiv submits a bid which

i)adheres to the letter of the tender criteria

ii) is the cheapest

the poor buyer is legally bound to award them the order, no matter how bad the smell ?