At any stage of the procurement lifecycle – from tender writing to final negotiations – accurately and completely describing what you are buying is critical…and rarely straightforward. Here are some of our thoughts on getting this right.
When we are engaged to advise on contractual interpretation issues, more often than not we are being asked to consider whether what was written down at the time corresponds to what has actually been delivered. In these circumstances, broad specifications introduce uncertainty for both parties as to identify what was intended to be delivered or received.
If the contract requires a supplier to provide ‘assistance to install the machine’, this could mean anything from being available on the end of a phone in case of issues, to physically coming on site to secure bolts to the floor. Particularly if the installation is in a remote location, this could mean the difference of days of effort and corresponding costs.
On the other hand, overly specific specifications, while narrowing the opportunity for uncertainty, may unnecessarily mean certain outcomes cannot be delivered, and as the purchaser you have to ensure all your requirements are completely included in the contract or else you may not be buying everything you need.
At a contract tender stage, some procurement policies may inadvertently narrow specifications and unnecessarily limit competition. Another often-seen example is the provision of an exhaustive list of resource requirements – the procurement falls into over-specifying how a service must be delivered, instead of a more general, based description of what outcomes the service needs to achieve. For example, a contract that specifies that ‘services must be delivered by three personnel over five days’, may be overly specific compared to a requirement that the supplier ‘provide sufficient resources to deliver the Services in accordance with the service levels.’
Ensuring that an appropriate level of precision is applied in describing the items or services to be bought will lead to both better outcomes and less disputes.
For procurement practitioners, getting the specifications right is a worthwhile exercise and one that assistance with clear and complete drafting can improve. While the legal terms of a contract are important, the specifications are the part that will have the most impact on the delivery and enjoyment of goods and services.
For more information about getting your procurement right please contact: