Innovative supplier selection methods

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The APM Contracts & Procurement SIG held a conference on the 1st of October 2008 at the Southwark Cathedral Conference Centre titled Innovative supplier selection methods.

During the afternoon, participants did some work on the advantages and disadvantages of the use of different selection methods.

The output of this work can be downloaded below and has been added to by both Jon Broome and the facilitators of each group and can be downloaded at the bottom of this page.

In addition, Mike Taylor cited a case which was proceeding through the courts which would have a major effect on the promises made during tender. Below is the relevant text:

In 2001 BSkyB wanted to set up a customer services centre in Dunfermline & Livingstone which they contracted with EDS to provide. In BSkyB's opinion EDS failed to "deliver what they had promised" so BSkyB booted them out and engaged an alternative contractor to do it. BSkyB clearly wanted EDS to pick up the tab for the costs associated with the re-procurement exercise and other costs incurred as a result of the failure of EDS. The contract contained customary exclusion for consequential loss and had the usual limits of liability provisions so EDS sought to rely on these and on the 'Entire Agreement' clause in the contract.

BSkyB wanted to sue EDS for more than the contractual limits believing that EDS had known from the outset that they could not deliver what they said they could and that internal EDS documentation and emails etc would confirm this. BSkyB have therefore sued EDS for around 700m claiming the Tort of Deceit and Fraudulent Misrepresentation ie ex contractual.

The case is still being considered by the courts and a ruling is expected in the next couple of months or so I believe but, if the courts find in favour of BSkyB, this will have massive implications for us all. It will mean that a party will no longer be able to automatically rely upon consequential loss exclusions and LoL provisions of contracts or on the Entire Agreement clause. Suppliers will have to have very careful management control of all documentation and correspondence with customers to ensure that nothing is said anywhere (and that can be discoverable in court cases) that would indicate that promises made are not deliverable in reality.

In the public sector we are already seeing a move by government customers to ask for express warranties concerning all statements made at all stages of the procurement process that they can then rely on in the event of supplier failure to deliver on promises made.

Each presentation can be downloaded below

Posted by APM on 29th Jul 2010
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