Hi, Martin here,
How do you ensure you put your best foot forward when asking for changes to a contract provided with a tender?
So, you have a new tender you really want to win and it comes with a proposed contract for the eventual winner. You just know it will be geared towards the customer and it should probably be reviewed. And an uncomfortable by-product of this review is that you will need to point out the inherent problems you have in signing the contract. Will this put your bid at risk?
I was recently asked for some thoughts on dealing with tender contract exceptions. By exceptions I simply mean the list of items in the proposed contract that you aren’t comfortable in simply agreeing to.
It wasn't a request regarding the legal content, like indemnities, set-off clauses and other ‘exciting’ legal stuff, but more about how to ensure you put your best foot forward when submitting contract exceptions.
In my experience, businesses getting frustrated with lawyers who put forward pages of wonderfully crafted legal exceptions is about as common as sunshine in Queensland.
So, with this in mind, here are my top tips on how to approach a tender legal review. The aim is to ensure you get the best value from this review and put your best foot forward with the customer:
1. Don't split the 'legals' out and separate the review from the tender as a whole.
A capable legal adviser will want to spend a lot of time reviewing all of the contract sections to ensure there are no inconsistencies. They will also be searching for the nasties hidden away in the schedules and other attachments to the contract. They are there because the customer's bid team usually doesn’t want to touch the base template contract any more than you want to read it! The solution – write all sorts of obligations with price and service risk into the other bits and pieces of the contract.
2. Know your risk appetite and assume you will be challenged on price.
Every risk you accept for your first price is difficult to undo. You will be asked to drop your price and ‘withdraw’ contract exceptions (and yes I get it. Why put them in then? Keep reading). If you don’t understand your risk, you will end up making less money with more exposure. Know your risks and then make fully informed decisions on what you drop and what you push, and tie it into price discussions.
3. Discuss internally what is going to be submitted, and what isn’t and why...
(and keep this handy for future discussions). Same as the above point. You need to know where you started to arrive safely where you are going.
4. Your audience is probably non-lawyers.
Come across as ‘easy to do business with. This usually just means writing the way you speak. Don't think you need to write the way you 'think' a lawyer writes, to get your point across. The opposite generally applies. And I hope this article at least helps you recognise that a good lawyer writing on your behalf will also avoid legalise. They will adopt this tip.
5. Short sentences.
They work really well. Always.
If it doesn’t make sense to you when you read it, challenge it and change it. You need to be able to explain to your customer what you mean and what you want. Can the ‘legal’ concern be raised in a different section of the tender response, i.e. is a list of pricing assumptions being included?
Martin has spent the last 12 years working as a senior legal adviser inside some of Australia’s foremost companies, as well as within the Australian businesses of some of the world’s largest companies. As ‘inside counsel’ Martin has learned that any effective commercial legal adviser understands how to balance the role of business defender with the role of business partner. Corvus are business lawyers and workplace advisors, with over 20 years experience working in Australian and international companies.