Thursday 5 February 2015

Z clauses....thinking about them from a different angle (part III the decision)

Having established the mischief then justifying the need to address it, next we need to make a decision and perhaps test it.

So does it stack up (perhaps sometimes financial appraisal only will not justify the need) and shall we put this into effect? Do we really need this in a one-off contract or could we elevate it somehow to a barrier to entry to working with our organisation - if you (as supplier) cannot demonstrate this or have done that then unfortunately there's a mis-match and we cannot do business together. Policing issues at this level should be far more effective than trying to make it happen with countless contracts. Surround yourself with suppliers that should give you the best service possible.

Once you've made a decision that perhaps a z clause is needed why not test this - why not ask tenderers to offer a price with and without this z clause. What if this causes the tenderer to significantly increase his tender total beyond the level you thought it would? How will you otherwise ever know?

There are loads more things you could look at here but you think there is justification, you need to make a decision to effect the z clause but possibly have one more chance at tender stage to test the financial impact this brings to tenderers.

After this, you can only measure what impact this has and consider the applicability of this for future contracts. As usual, be careful what you wish for!!!

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