Is there a lawyer in the house?
Sophie Newbould looks at the legal options for when you’re selling goods, services or tech into government
Whether you’re a sole trader or multi-billion-pound strategic supplier, contracting with the UK government and wider public sector is rarely straight-forward. Picture a sole trader from the gleaming spires of academia who has contracted with government to sell his self-developed coded software but hasn’t realised that he has, in fact, transferred his lifetime’s Intellectual Property for a time and materials pricing model. Such problems are by no means confined to sole traders, however. Larger organisations, too, are hardly immune to legal difficulty. Imagine a multi-billion-pound strategic supplier under government contract which finds itself having to invest considerable amounts into establishing its lack of responsibility for an implementation deliverable that is fast becoming a dispute and, in the process, eroding any profit margins it has left.
Both scenarios are crippling for the supplier, no matter its size or contract complexity. But both are preventable commercial risks that could have been managed using a qualified legal professional. Unfortunately, the commercial devastation to both parties (and other suppliers) are consequences of true scenarios that I have witnessed from within government. There is no room for pleasantries here. Just hard business. Do not take it personally.
Selecting Tender Pursuits
Let’s start with some basics. It’s vital to remember that some government tenders will simply not be worth the investment of your business’ time and money – even winning won’t change this unwelcome jolt of reality. The processes you install to select the right tendering pursuits are therefore likely to be the most important part of your business risk analysis. The value of good legal support starts here.
Allowing as much time as possible for your business to prepare, analyse and forecast the benefits and risks of any public contract tender must be a priority.
There is little, if no, value of rushing into bid on tenders when you are blind-sighted on risk exposure. The risk may be too great and, to be honest, it’s likely that you will not win with such an approach anyway.
Basic Business Risk Protection
To ensure a basic level of risk protection, here are some key areas where legal support on your bid team could make all the difference:
1. Public procurement law and applicable legislation expertise
Spot where the contracting authority may have not followed correct procedure or breached its legal responsibilities for a fair, open and transparent competition. There is also a plethora of legislative compliance to consider, including the General Data Protection Regulations, Public Contracts (Social Value) Act, Modern Slavery Act, environmental and social compliance, Anti-bribery/corruption, cyber security, and information handling. Any bidder needs to navigate and comply with this complex legal tapestry whilst also ensuring that bid compliance is understood, and procedures and processes are correctly implemented within the bidder business.
2. Procurement documentation review
Conduct a legal review of all the procurement documentation, including requirements, timelines, procedures, contract terms and conditions, schedules, plans, and security. Organisations need to ensure that all key internal commercial legal matters are sufficiently covered before proceeding (i.e. close any legal and commercial risk gaps where possible and identify where the same remain exposed).
3. Intellectual property/value proposition
Whatever your business is selling make sure it is priced correctly by deploying an appropriate legal framework and financial model. A good lawyer can test your model against the tender documents to ensure you are realising the full value proposition for your business – thereby avoiding the academic supplier’s scenario I mentioned earlier.
4. Understanding risk liability and indemnities
Good legal advice should be obtained to ensure you are assured that:
- the indemnities your organisation are providing (and accepting) are sufficient and correctly flowed through supply chains.
- your business is sufficiently protected/covered if the contracting authority defaults.
- the level of risk you adopt under the tendered contract terms are acceptable.
5. Raising clarifications and planning contract lifecycle scenarios
Good legal advice can help raise relevant clarifications in relation to procurement procedures and improve your organisation’s understanding of how the lifecycle contracting terms apply to various scenarios.
6. Conduct risk gaps analysis
Use legal expertise to conduct a risk gap analysis between your business solution against the contracting authority requirements. Know your business risk exposure and ensure sufficient protections in place and avoid the strategic supplier scenario I cited above.
7. Improve your bid prospects for evaluation success
If there is an opportunity to negotiate during the procurement procedure, good legal support will help your business achieve the most commercially advantageous outcome which can help lead to a higher prospect for successful scoring at evaluation.
8. Be legal challenge ready
If the contracting authority conducts behaviours that breach UK and international procurement laws, it would be prudent to have a good public contracts lawyer in place and ready to spot where matters can be challenged if necessary. There are plenty of examples where bidding companies challenge authorities for a procurement illegality that lead to a change of award decision, and potentially a re-tender opportunity.
9. Make legal part of your team
If your bid does win, the contract life cycle itself is likely to require a certain amount of ongoing legal support in terms of fast and effective dispute resolution, ensuring contract change impact assessments are correct and any changes across the contract documents are consistent, accurate and completed. The more your legal team knows about your business, the more effective and efficient their involvement will be as good relationships with your lawyers will pay dividends for your business.
10. Understand contract exit from the off
Even before entering your new contract a good understanding of exiting it (such as how much exit will cost you and how well you need to plan) is also a very important consideration. Receiving good legal support to guide you through this process will always be worth its weight in gold. Having a true understanding of your business position, and ensuring this understanding is correctly reflected in your business solution and the contract terms, will make an enormous difference to understanding your business risk exposure on contract expiry or earlier termination.
There are also a range of other policies, contract plans and ancillary documents that will need to be drafted for the bid that must ensure consistency and enable growth across the rest of your business. To ensure that these documents are compatible with relevant UK and international laws, it is wise to seek good legal advice as part of your bid/business team.
The government spends hundreds of millions of pounds on legal services for its outsourced projects and complex contracts. It makes perfect sense to include legal services as part of your business bid team costs, even if it is to rule out a tender opportunity for reasons such as non-profitability or overtly high risk if pursued.
About the author
Sophie Newbould has been advising on public sector contracts and procurements since 2000. Her law firm, Newboulds Solicitors, predominantly advises technology companies selling into UK government and wider public sector. Feel free to call tel:0800 019 6793 for a free consultation about your next public tender opportunity.
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