Anyone who works in the contracting and procurement space knows that it is possible (some would say ‘inevitable’) there may be a need to run a series of related procurements. It could be that the first procurement did not yield a value for money outcome and you need to try again, or perhaps you have just acquired some supplies and now you need to procure associated support. Maybe the contract from an earlier procurement will terminate or expire, and you need to procure ongoing or updated services.
Whatever the scenario may be, you have no doubt pondered whether material tendered for the original procurement can be used in the subsequent procurement process. If not, you’re thinking about it now, aren’t you? The purpose of this article is provide an overview of the considerations that you should take into account when contemplating if (and, if so, to what extent) tendered material could be used for such purposes.
To begin with, what material do you want to release, to whom and for what purpose?
It is unusual for there to be a “one size fits all” answer to what you can or can’t do with tendered material. Although it may be tempting to jump head first into investigating your rights, it is important to first understand what material you want to release, to whom and for what purpose; this will help t you identify what rights you require.
What material do you want to release?
While it sounds simple enough to say you want to release and use material that had been tendered as part of a particular procurement, it is important to note that tendered material comes in many forms and may have been provided at different points during the tender process. Was it material submitted as part of a tenderer’s original tender? Was it material that had been altered or supplied during offer definition activities? Was it material obtained during contract negotiations? Was it material that had been prepared in draft for approval following contract execution , such as draft management plans and other data items?
Understanding where in the tender process the material originated will assist you to identify the relevant rights and limitations that may apply to the disclosure and use of the material. For example, your rights to material tendered as part of the original bid may be governed (at least in part) by the conditions of tender, whereas your rights to material submitted during offer definition or negotiation phases may instead (or in addition) be governed by a process deed signed by the parties in respect of the relevant phase.
Who will be the recipient of the material, and for what purpose?
It would not be surprising for different limitations to be placed on the use of tendered material depending on the class of recipients, including (for example) distinct purposes for which each recipient may use the tendered material. Therefore, it is important to understand to whom you want to provide the material, and for what purpose.
Common recipients and uses of previously tendered material in subsequent procurement processes include the following:
||Material provided for the purpose of…
||Preparing request documentation and internal briefs.
|Organisation’s contracted service providers
||Assisting with request documentation and advising on the procurement process.
|Potential tenderers (eg, through an RFT data pack)
||Providing context to the procurement and informing tender responses.
|Successful tenderer / incoming contractor (eg, through customer furnished material)
||Performing the relevant contract – eg, for incorporation in (or simply to inform) contract deliverables.
Next, what rights do you need?
Now that you know what you want to release, to whom and for what purpose, the next step is to understand what rights you need to achieve this. This will help you to identify any gaps that need to be addressed.
So, do you need a right only to disclose the material (which may be the case if you’re providing the material to persons for information only)? Do you need to exercise any IP rights in the material (eg, to reproduce extracts of the material within internal approval documentation)? Maybe you need to sub-licence IP rights to a third party (eg, to tenderers so they can adapt the material for their responses)?
It is important to note that the required rights may not always be obvious. For example, although, on the face of it, use of material only for internal informational purposes (eg, as a reference to “inspire” the creation of new request documentation) may only require a right to disclose the tendered material within the organisation, that use may in fact overlap with a requirement for the following rights:
- Exercise of IP rights in the material. The owner of IP in the pre-existing material may seek to argue that the creation of new documents involves the reproduction, adaptation or modification of IP in the tendered material, and that the newly created documents are not “original” enough to constitute a new work in their own right.
- Disclosure of information to third parties. Even if you can demonstrate that the new documents are original and did not involve the infringement of any protected IP rights, you may nonetheless need permission to disclose the documents to external third parties such as tenderers (eg, if the new documents convey information from tendered material that is protected because it is confidential).
In our experience, understanding what rights are required is just as important as understanding what rights you actually have. A misunderstanding of the rights you require could result in the use of material in a manner that (unintentionally) infringes another party’s rights.
Now, on to the question of what rights do you have?
Finally, we come to the question that’s probably at the crux of why you’re reading this article in the first place. What rights do you have to use the tendered material? While we can’t answer this question for you (at least not in a generic article such as this one – remember, one size does not fit all!), we can point you in the right direction.
Key areas to consider include the following:
- Conditions of tender – What do the conditions of tender say about what you can do with the material submitted as a part of that tender? Normally, request documentation includes conditions regarding use of tender documents, as well as provisions regarding each party’s confidentiality obligations. If you’re lucky, you may even have an express right to use material tendered by the tenderer in other procurement processes conducted by your organisation. However, be aware that many conditions of tender are expressly stated as being non-binding, except in certain circumstances (such as where a tenderer’s deed of undertaking or deed of confidentiality has been executed).
- Tender response – Noting that conditions of tender are generally non-binding until a subsequent contract is executed by both parties, it is important to consider whether the tenderer used its tender response to express non-compliance with provisions of the request documentation (particularly provisions relating to use and disclosure of tendered material). If so, what was the organisation’s response (if any)? Was the non-compliance expressly accepted or rejected?
- Process deeds – Procurements (particularly the complex ones) can have multiple stages during which material additional to that in the original tender may be submitted. This may include the submission of an improved tender following offer definition and improvement activities, or the provision of supporting documentation during negotiations. Do you intend to use material developed or tendered during these (or similar) stages? If so, has a process deed or other agreement been signed by the parties that may add to or amend the position set out in the conditions of tender regarding use of such material?
- Commonwealth Procurement Rules (CPRs) – Do the CPRs apply? If the material was tendered as part of a Commonwealth procurement process, additional limitations may apply by virtue of the CPRs – for example, see paragraph 7.23 of the CPRs, which requires submissions to be treated as confidential before and after the award of a contract. For older procurements, historical versions of the rules (or even the Commonwealth Procurement Guidelines, as they were then known) may need to be considered.
- Contracts – It is not unusual for tendered material to subsequently form a part of a contract if the tenderer is successful; this includes material such as schedules, plans and draft data items. In this case, regard should be had to the conditions of the contract (which, as noted previously, are generally more binding in nature than request documentation) and any associated IP plan or confidentiality schedule. Are there any IP licence rights in the contract that could be relied upon? Is the material expressly identified as confidential information? Is use or disclosure conditional upon another obligation (eg, to obtain non-disclosure agreements from recipients)?
- Law – Even if there are no discernable contractual or other express obligations of confidence, could there be an implied or equitable obligation not to disclose the tendered material? If you’re conducting a procurement on behalf of the Commonwealth, could there be Crown use exemptions under legislation that apply to the use of intellectual property rights in the tendered material? Even if material is not commercial-in-confidence information, and you have the requisite IP rights, are there any security or export restrictions that need to be considered?
- Order of precedence – It is possible that your rights regarding an item of tendered material will be set out in more than one place. If this is the case, and the rights are inconsistent, then don’t forget to check if there are any provisions setting out the order of precedence that will apply.
As you can see, the question of what rights you have can be a tricky one to answer. This is especially the case if the material you want to use comprises both “new” (commonly referred to as Foreground IP) and “pre-existing” IP (commonly referred to as Background IP or Third Party IP, depending on ownership). There will not necessarily be a clear delineation regarding what will be classified as Foreground IP, Background IP or Third Party IP, and it may be difficult to distinguish between “new” and “pre-existing” IP in tendered material that is:
- improved and resubmitted during offer definition activities;
- amended during negotiations; or
- attached as “draft”, and subsequently submitted as “final”, under a resulting contract.
Understanding this distinction is important, as your rights to Foreground IP, Background IP and Third Party IP are often different.
Finally, are there any gaps?
If the rights you need, and the rights you have, align – you’re good to go. But what happens if they don’t align? What should you do if you don’t have sufficient rights in the tendered material?
In this case, you should:
- limit your use of the tendered material to align with your rights; and
- ensure that the extent of rights granted in the material is clear to any recipient. To do this, you may wish to seek a deed of undertaking or other acknowledgement from the recipient that they will only use the material for the express purpose set out in the deed.
Lastly, you may wish to consider engaging with the owner of the tendered material to negotiate the additional rights you require to close the gap between what you can do and what you want to do with the material.
Due to the amount of time that it can take to complete the above analysis (as well as the time that may be required to negotiate additional rights from multiple suppliers), we recommend that you consider as early as possible in the process what rights may be needed for your procurement.
The good news is that once you are familiar with the rights and issues that can arise when seeking to use tendered material in subsequent procurement processes, you will be able to apply your experience and any lessons learnt to the planning and development of future procurements. This may include, for example, ensuring that:
- your request documentation has clear (and enforceable) disclosure and use rights to material tendered during all stages of the procurement;
- you address (and document your response) to any non-compliances tendered by tenderers regarding disclosure and use rights; and
- you have in place good contract management and record keeping processes to assist you to identify what material was received from whom and at what stage of the process.
The guidance in this article is provided at a high level only. We suggest you seek targeted legal advice if you are uncertain what rights you require or have for your procurement activity.