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Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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If a Company awarded a contract decides to decline the award

Customer Question

If a Company awarded a contract decides to decline the award and the issuing Authority choose to offer the award to the second best Company being us are they legally entitles to change the contract from a 4 yr contract to a 2+2 yr contract. We have agreed to adhere to our costings logged on the original tender submission but they are proposing to change the contract period?
Submitted: 4 years ago.
Category: Law
Expert:  Ash replied 4 years ago.

Alex Watts : Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return.
Alex Watts : Does the contract allow for it to be a 2+2 or is it on 4 year only?
JACUSTOMER-uwz2ilzw- :

On the original tender it was for a 4 year contract with a price review after the first 2 years. Now the contract period has been changed to a 2+2 year contact, the difference being that after the 2 years the contract would be reviewed and a decision made whether to (i) end the contract or (ii) to extend it by a further 2 years. They have requested that a short extension apply to 17th October 2013 to the existing contract which we currently hold to allow for the above to be agreed.

JACUSTOMER-uwz2ilzw- :

Legally can they change the original terms of contract?

Alex Watts : Legally can they do this - no.
Alex Watts : This is because you have submitted a tender and the tender is as the terms which states 4 years but with a price reciew
Alex Watts : If they want to change the spec then they would have to stop the old tender, change the terms to 2+2 and then re offer the tender.
Alex Watts : That is legal by declaring the first one void and re rendering it
Alex Watts : Does this make sense and can I clarify anything for you about this please? Alex
JACUSTOMER-uwz2ilzw- :

As the awarded bidder declined to take up the contract and it is being offered to ourselves but under the changed terms as discussed above, if we were to challenge the new required 2+2 term, I feel that they would simply re-issue a new tender process as you say of which would be 2+2 anyway and this would probably take 9-12 months for the council to initiate. we being the existing contractor would be asked to extend our current contract and have to re-submit all over again. i feel that it may be easier and quicker for all concerned to simply accept the changes and move on ?. what would you advise.

Alex Watts : It is a matter for you it's a commercial decision.
Alex Watts : They can re tender and that would be the legal thing to do.
Alex Watts : Therefore it's a commercial decision. Whether you want to take it as a risk and have 2+2 or a 4 year.
Alex Watts : i realise this may not be the concrete answer you want but it is a matter for your business and not really a legal question.
Alex Watts : legally you are entitled to re-tender. Alex