Tendering and procurement is becoming increasingly globalised. In this environment it is critical that owners become more sophisticated and disciplined in their approach to drafting the Request for Tender (RFT) document and more consideration needs to be given to issues that were once standard and seen to require little attention. These include the relevant time regime used for the deadline for the submission of tenders.
The recent case of Electricity Retail Corporation t/as Synergy v Western Australia1 dealt with the issue of the time for the submission of tenders and whether or not the tender submitted by Synergy was late. The central argument focused on the time regime applicable to the closing time in the RFT. On one interpretation the tender was submitted on time while on the other the tender was late and would be excluded from evaluation.
The issue of the closing time and the acceptance or exclusion of a tender was first considered in the landmark case of Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council2. This case was not only the first to establish the process contract in UK common law but also considered whether or not a tender was validly deemed late and therefore set aside from evaluation.
The Synergy Case – The Request for Tender
The Western Australian Government through the Office of Energy (the State) issued a tender for the supply of 26,000 megawatt hours of 'GreenPower' premium, accredited through the national GreenPower programme for the 2007/2008 financial year. The RFT provided that the closing time for tenders was 11.00am Thursday 6 December 2007 (Western Standard Time).
Part C clause 1.1(a) of the RFT conditions provided that, amongst other things, any offer which is not submitted before the closing time or is incomplete at the closing time will be excluded from consideration unless the tenderer can provide conclusive evidence of mishandling of the offer. 'Closing Time' was defined as the 'time and date specified on the front of this Request as the closing time'.
The Closing Date and Time
The closing date and time for the RFT was advertised in a range of places in addition to being included in the RFT itself. The first advertisement, placed in The West Australian Newspaper, noted the closing date and time as 'Thursday, 6 December 2007 at 11am'. However, a second advertisement in the same paper noted the closing date and time as 'Thursday, 6 December 2007 11.00am (WDST)'; WDST presumably being an acronym for Western Daylight Savings Time3. The RFT was also advertised on the Department of Treasury and Finance website with a closing date and time of 'Thursday, 6 December 2007 11am (Western Australian Standard Time)'.
Synergy gave evidence that it had not seen the two advertisements but had obtained information about the RFT from the Department of Treasury and Finance website, which they had been alerted to by a telephone call from an employee of the Office of Energy.
A non-mandatory briefing was held and a PowerPoint presentation containing information about the RFT was delivered. It included a slide entitled 'Tender Details' which stated:
A copy of these slides was included in an addendum issued by the State.
A second addendum was issued by the State extending the closing date and on which it was noted that the closing date was '11.00am Wednesday 19 December 2007 (Western Standard Time)'.
On 19 December 2007 at approximately 11.34am AWDT (summer time in Western Australia), Synergy lodged its tender at the specified address in Perth, Western Australia. On 27 December 2007, the State advised Synergy that:
- Its offer had been received at 11.34am on 19 December 2007.
- The offer had been received after the closing time, which had been specified as '11am Western Standard Time'.
- Due to the above, Synergy's tender would not be evaluated.
The Process Contract and its Terms
The Court accepted that if Synergy had lodged its tender within the time specified by the RFT, a process contract would arise between Synergy and the State. The process contract, which was conceded by the State, would be a contract between Synergy and the State to the effect that, in consideration of Synergy preparing and submitting an offer, the State would evaluate and assess that offer in good faith and in accordance with the provisions of the RFT.
It was argued by Synergy that the evidence relating to the newspaper advertisements and material on the Treasury and Finance website should not be relevant. The State accepted that the newspaper advertisements or material contained in the Treasury and Finance website did not form or could not form part of the process contract. Rather it submitted that the material was admissible as evidence of extrinsic circumstances available to assist in the resolution of contractual ambiguity4.
The Court said that if the newspaper advertisements and website material were admitted to assist in the resolution of contractual ambiguity, it would have to be shown that these were objective facts known to both parties. The Court found that the terms of the newspaperadvertisements, and the assertions made on the website, are not objective facts of the kind that can be admitted as an aid to construction. At the most they are materials which have formed part of the process of negotiation between the parties. In the case of the newspaper advertisements, based on the evidence of Synergy, they were not known to Synergy and as a consequence this evidence was not admissible. In any event the Court found that the RFT was not ambiguous.
The Time Regime
In 2007, there were two time regimes in Western Australia:
- Standard time – established by the Standard Time Act 2005 (WA).
- Summer time – established by the Daylight Savings Act 2006(WA).
The RFT closed during the summer time. As a consequence the Court stated that the general effect of the Daylight Savings Act is to provide that over the summer period (as set out in section 4 of the Act), there is to be a time known as 'summer time' which is to be one hour in advance of standard time.
More specifically, section 7 of the Daylight Saving Act provides that during the period that summer time is in operation, a time specified in any act, contract, agreement, deed or other instrument is to be taken to be a reference to summer time unless the contrary is expressed. Both Synergy and the State accepted that the RFT and the process contract incorporating the terms of the RFT fell within the scope of a contract, agreement or other instrument for the purposes of section 7.
Therefore the question for the Court was whether a time, other than summer time had been expressed.
The Court found that the decisive reference to time in the RFT was found in Addendum 2, which specified that the closing time was to be '11.00am Wednesday 19 December 2007 (Western Standard Time)'.
The State argued that the relevant time regime was the time enforced in Western Australia at the time the tender closed, which was summer time. The State said that as the briefing was held at 10am on 9 November 2007, being summer time, the RFT as a whole should be construed as referring to summer time.
The Court however found that this submission ignored the 'plain and obvious' effect of the use of the words Western Standard Time when specifying the 'closing time'. The Court found that by stipulating the closing time as Western Standard Time the RFT clearly and unequivocally adopted 'standard time' as the time regime governing the RFT and, more importantly, the closing time. The fact that the request refers to summer time in relation, for example, to the time for the briefing, did not, in the Court's opinion, support the conclusion that the closing time should be construed as a reference to summer time. The Court said that if the authors of the RFT had intended the closing time to be summer time, they need not have said anything about the time regime to be adopted. By including the words Western Standard Time the RFT clearly adopted a different time regime.
The Court therefore found that Synergy's tender submitted at 11.34am summer time (which was 10.34am Western Standard Time) was submitted in accordance with the requirements of the RFT (ie before 11am Western Standard Time) and therefore should be evaluated by the State.
Time Regimes across Australia
Time regimes used in Australia vary depending on the location and time of the year. A whole range of acronyms can be and are used in tenders to note the closing time. For example:
- AEST (Australian Eastern Standard Time) is used in NSW (except Broken Hill), Victoria, Queensland, Tasmania and the ACT.
- ACST (Australian Central Standard Time) is used in South Australia, Northern Territory and Broken Hill NSW.
- AWST (Australian Western Standard Time) is used in Western Australia.
AEST and ACST change and become respectively AEDT and ACDT during daylight savings periods. As stated earlier, daylight savings no longer applies in Western Australia.
Each state has its own legislation dealing with time regimes. The Standard Time Act 1987 (NSW) provides for both 'standard time' and summer time and, like its former Western Australian equivalent, the time regime is considered to be 'standard time' in a contract or agreement unless expressly stated otherwise.
This case is a useful reminder to ensure that the time regime noted on the tender is considered and, when determining whether or not to accept a late tender, due regard is given to the time regime in the RFT.
The discretion of an owner to accept late tenders differs depending on whether the owner is a Commonwealth Government entity or a state or territory government entity. The Commonwealth Procurement Guidelines are clear that late tenders will not be accepted (exceptin extremely limited circumstances). Various state procurement guidelines, on the other hand, including the NSW Procurement Guidelines, provide discretion in relation to the acceptance of late tenders.
It is important for those entities calling tenders to ensure that they are fully aware of the relevant procurement guidelines and the RFT conditions when determining whether or not to accept a late tender, as well as the relevant time regime.
This case demonstrates the importance of being consistent in referencing times and dates, both in the RFT and in advertisements and websites, to avoid ambiguity and, in this case, costly litigation.
It also highlights the risk in using standard RFT templates without thorough consideration of information which is considered to be standard such as references to dates, times and time regimes.
Finally the case serves as a lesson to those calling tenders, and to those responding, to be aware of the applicable time regime and, if uncertain, to seek or provide clarification before the closing date and time.
1  WASC 19
2  3 All ER 25;  1 WLR 1195
3 Daylight savings was rejected by referendum in Western Australia in May 2009 but was still in operation at the time of this tender.
4 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352
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