Discussion to "Contract Negotiation Surprise"

It's Monday, and here's our Friday answer to last week's mini-case study:

So, what are the risks of continuing negotiations with the vendor? First of all you need to recognize, your process is tainted – the successful proponent received different information/treatment than any other vendor in the process.
1) Risk of Liability – as your process if tainted, in Canada, this could be a breach of “contract A” and the unsuccessful vendor may argue breach of contract (your RFP process). I’m not a lawyer, so can’t say for SURE they’d win that case.
2) Risk of conditions – you may have specified conditions in the RFP, but the current vendor is arguing they were told differently and bid accordingly. You may be able to stand behind your language that all information was to come via the RFP, but will that mean a good vendor relationship, or fighting for everything for the contract period?
3) Contractor has an ‘easy out’ – strangely enough, there have been cases where a vendor walked away from a contract, and was successful in court arguing that they “should have been disqualified”.

What are the risks of not continuing with the vendor?
1) Risk of Liability - Just like the unsuccessful vendor, the ‘successful’ vendor could argue a breach in your process if you cancel awarding the contract to them (again, not being a lawyer, I can’t say for sure whether that’s a viable case)
2) Inadequate Service – if you pull the plug on the ‘successful’ vendor, then go to the unsuccessful vendor, you may end up with an approach/proposal that you had already deemed was not adequate for your needs.
3) Reduced competition/increase in Time & Costs: There’s costs and time delays one would incur with cancelling the process and having to redo the whole process again. In all likelihood there’ll be a lack of competition ie with the ‘successful’ vendor not responding a second time, thus eliminating competition.
4) Unlevel Playing Field – how do you level the playing field when no-one knows what was discussed with the former Executive Director? And, if we admit the issue (to be fair and transparent), will the unsuccessful vendor still sue if the process is cancelled and re-issued.

Now some of these are unlikely occurrances, others are low cost risks. One needs to find a balance when we have to ‘fix’ a process that didn’t go as ‘cleanly’ as it should have…