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You are on step 8 of 10 steps.

Click for slide: Planning for negotiations Click for slide: Managing the Supply Chain Click for slide: Other agreements Click for slide: Ensure the right contract is in place Click for slide: Agree service levels Click for slide: Prepare for change Click for slide: Ensure that there is a clause addressing dispute resolution Click for slide: Selecting a preferred bidder Click for slide: Produce evaluation plan Click for slide: Agree draft contract
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What you need to do

Preferred bidder stage is the final stage before financial close and contract signature. It involves selecting one supplier as a preferred bidder, and finalising detailed drafting of the contract terms, and the schedules that specify the operation of the service and define the nature of the asset as proposed in the bid. The time should not be used for substantive negotiations over commercial terms or price. Usually there is a reserve bidder in case it is not possible to conclude the contract with the preferred bidder.

The best time to appoint a preferred bidder is when there is little risk that the finalisation of contract terms details, due diligence and funding arrangements (and, when required, TUPE negotiations and other negotiations with employees and/or detailed planning clearance or other statutory consents) will lead to any material change to the proposed deal.

Points to consider

After the appointment of a preferred bidder, it may be difficult to maintain competitive tension. Since competition is the best driver of value for money, great care needs to be taken that the appointment is not made prematurely

Are the key elements of the deal agreed? What is the risk it could unravel?

Can the preferred bidder demonstrate before appointment that it has the resources, and management skills and support to conclude negotiations on the basis of the agreed key elements in an efficient and professional manner?

Does it have the ability to deliver, post-contract signature, a complete solution to meet the output specification?

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