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World Commerce & Contracting
2016-10-12 09:05:59

Flexibility in technology contracts with the Public Sector?

When does 'no negotiation' mean 'no negotiation' in technology contracts with the Public Sector?

In principle, public procurement rules are seen in Europe as providing no flexibility for negotiation of terms and in general, policy on areas such as liabilities and indemnities allows for no variation.

However, in reality, what do you experience? On these terms - and others like warranties, IP, data security - do you experience that there is no negotiation, or do you find a less consistent approach?

And if inconsistent, is that because some countries are less rigid, or some situations?


Pablo Cilotta
 •  Longsword Solutions Limited  •   2016-10-12 15:40:13
In terms of EU Regulations I have it in mind that only "Open Procedure" and "Restricted Procedure" tenders do not permit negotiation. I do not yet have any experience of Competitive Dialogue.

Negotiated Procedure permits flexibility, but within individual ITT documents it is possible for compliance with T&C's to be 'gated' or heavily weighted. If so, this will be specified in the instructions to tenderers and/or award criteria. Also, the contracting authority will almost certainly reserve a general right to reject non-compliant tenders. I've never seen this done (yet!) but it's an important health warning.

In my experience the UK Healthcare sector seems to be one place where "no negotiation" of T&C's is strictly enforced at both a framework and individual procurement level. They also tend to give themselves some pretty robust (bordering Draconian) remedies.

Local government, police, and utilities seem to have more flexibility.
 •  Appian Corporation  •   2016-11-03 20:49:00
Hi Pablo,

I work in the pacific northwest region of the U.S. I used to negotiate contracts in the public sector for a major public university, and those negotiations were governed in part by the statutes and regulations in my state that have been enacted for public contracting. But those statutes and regulations don't dictate specific positions on items such as warranty, data security, etc.

We negotiated several large purchases of technology at the university- both hardware and software. In those negotiations, we had pretty wide leaway on topics of warranty, data security, and IP (i.e. the license grants, etc.). The university as a public entity most definately negotiated, and we did not have a "no negotiation" policy.

While this state of affairs may different from state to state in the U.S., I think generally speaking public entites here have the ability to negotiate certain terms if they chose to do so.

I hope this is helpful.
 •  Legal & General  •   2016-11-08 21:48:07
Hi Pablo

I'm based in the UK and in my experience, there is a degree of flexibility in some (but not all) cases and this seems to vary depending on a variety of factors including the value of the contract, process selected (e.g. framework/open/restricted/negotiated) organisational culture, internal governance, professional confidence and appetite for risk.

Queries regarding the terms we seek to amend are raised through the clarifications process usually via the contracting authority's procurement portal. This process is of course very restrictive, not least because all parties, including competitors can see the points you have raised. However, it has proven successful in a number of cases.

Hope that helps
 •   2018-04-04 13:37:24
Hi Pablo, I'm in the UK and agree with Sophie's points. Ability to negotiate certain terms in the first instance when completing an online document is zero. You tick a box to accept the terms and if changes are necessary you will have to address them at a later stage. Public procurement certainly needs transforming and you may find this report from Future Purchasing interesting: www.futurepurchasing.com/knowledge_hub/procurement-transformation/procurement-transformation-ip/public-procurement-is-central

Mark Ford-Langstaff
Replies: 4
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