TENDER

David Hornby

An advertisement for tenders is an invitation to treat unless it is states that the lowest tender will be accepted in which case it becomes an offer. Each tender submitted constitutes an offer. Tenders can be called by either:
DECIDE ON AN OPEN OR CLOSED (SELECTED) TENDER & SPECIAL CONDITIONS

The most common tender system is the open tender. This is a tender advertised “to the world” and anybody interested is invited to submit a tender. This is the normal tender sale process for rural properties. However, the occasion may arise where the expected buyer has to meet certain criteria before being allowed to submit a tender. This will only apply to formal tenders where for example, the seller requires the buyer to have sufficient expertise and assets to carry out required improvements on the property.

The more likely scenario where the tenders will be selected are in the formal tender system adopted by governments and councils. The local council may require for example, that a condition of the tender is the improvement of access roads to the property. Only tenderers with the financial backing and expertise to carry out these works are allowed to tender.

The formal system has been outlined in Learning Outcome 1. In this case government departments and councils are required to follow set procedures and protocols as outlined in government or council policy documents. The stock and station agent will come into contact with such formal procedures if he/she has been invited to sell rural land on behalf of the department or council. In this situation the agent must make sure that he/she has obtained the full and correct procedures. These will include the necessary tender documents or invitation to tender if the process is selected tendering.

The agent should study and make sure he/she understands the required procedures because in a formal tender situation there may be room for a dissatisfied tenderer to sue the agent if that agent does not correctly and full follow the set procedures and rules. If the agent is unclear of any matter, procedure, term or condition applying to the formal tender system then he./she should consult their legal adviser for clarification.

Your legal adviser can also make sure that you have set up an independent system that will meet not only the procedures and protocols set down by the department or council but also consumer and anti discrimination laws. For example, the office staff must receive tenders from all eligible people and not discriminate under anti discrimination laws. Your legal adviser can also advise on the best method of opening the tender box (eg in the presence of a departmental/council official) and how and in what order they should be evaluated.

Special conditions to the tender system should not breach consumer and anti discrimination law. They can be required in both a formal and informal tender system. In an informal tender system it is sufficient to have the special conditions clearly stated in the advertisement (eg “must settle by a certain date”) or if there are a number the advertisement should state “subject to conditions” and where a full copy of these conditions can be obtained.

Special conditions attached to a tender should be checked by your legal representative as not being in breach of consumer or anti discrimination laws.

Suitable database and/or recording systems for sale by tender
There are a number of dedicated programs that the agent can use to keep a record of enquiries and prospects for sale by tender. These are database programs with easy menu options that allow the grouping of prospects and their details according to a useful variable (eg such as address). Examples can be found in real estate magazines such as the REI Journal. The learner should realize however, that these programs are largely database programs and although easy to use, flexibility is lost as agents cannot modify them to their particular needs.
With a little practice the agent can construct his/her own database program with common software such as Access or on spreadsheets such as Excel (part of the MS Office Suite) or their equivalents in free office suites such as Open Office.


Why record the tender system on a database? Because it: A computer database that tracks the tender system from opening to closing will allow agents to efficiently evaluate the success or not of their advertising and promotional campaign. We can follow the tender system in stages and note how the use of records, proformas and databases aid the agent in the sale process.
Opening tender
A database or spreadsheet program should be set up so that any enquiry by telephone, email or in person is recorded. The enquirer should be encouraged to reveal at least their names and addresses for entry into the database. A telephone or email enquirer should be encouraged to come into the office to pick up a brochure or have one mailed to them. If the brochure is to be mailed out, at least their name and address is known.
For formal tenders a tender book is kept. The applicant must sign this book in sufficient detail before the necessary tender documents are handed over. This is necessary because if there is a change in tender policy or information provided (eg a typographical error may be found) then all potential tenderers must be advised. Otherwise there would be a serious breach of “due process”.
Enquiries will include a request for more information and clarification of details. If it becomes apparent that there is an obvious omission or mistake in the advertisement or brochures all enquirers should be notified of the changes. Again, this is most essential in a formal tender system.
The necessary contract and planning information has been prepared by the agent for perusal by an interested party. The documents necessary are the same as for private treaty,
Lodgment of tenders will occur during the tender period. For informal tenders this is usually the tenderer handing over an envelope containing a letter to staff, posting the tender in or lodging the tender by email. Verbal or telephone tenders cannot be accepted.
Emails are acceptable for an informal tender. They should be printed out by the agent and lodged on behalf of the tenderer. A tender box is not necessary for an informal tender but all the tenders received must be lodged in the same and secure place. A cardboard file box or folder in a lockable filing cabinet is suitable.
For a formal tender, only tenders in the correct form(s) can be accepted. In the formal tender system the tenderer will lodge the tender documents in an envelope (with identifying information on the outside) into a locked tender box displayed in an obvious position in the office. The agent must follow the stated procedures and rules that are applicable for a government or council tender system
The use of a spreadsheet to record enquirers will aid transparency, and is a good summary of the success or not during the tender period. It should be shown weekly to the seller.
The following is a recommended Tender enquiry/contact form. This can easily be setup on a spreadsheet.
NB use landscape mode to provide more room.


Property address:………………… Seller……………………….
Seller address if not property address:……………………..
Contact number:………………………
Preferred times for inspection: …………………….
Enquirer’s name Date-
time 		Contact number
# 		Address Brochure given or mailed Y/N Comments


























Closing tenders
Although it is not necessary for an informal tender it is good policy and increases transparency if the tenders are opened in the presence of the seller.
The correct closing procedure is laid down for formal tenders and usually a government or local government nominee will be with the agent when the tender box is opened.
A list is made of the lodged tenders as they are drawn from the tender box and each is numbered in consecutive order. This list is then signed by both the agent and nominated person.
A suitable spreadsheet for listing is as follows. The comments column is filled in later:
NB use landscape mode to provide more room.


TENDER PROPERTY…………………
ADDRESS ……………………………….
SELLER……………………………………..
TENDERS LODGED. WITNESSED BY:…………………………….
Tender # Tenderer’s name Tender Price Correct forms Y/N Comments




















Signed: Agent …………………………………………..
In the presence of Witness …………………………………………….
Date: ……………………………………………………….
2 Evaluating tenders
The agent and seller should agree on the acceptable conditions of a tender before opening them. That is, if a tender does not meet the agreed criteria such as price, then that tender should be set aside.
Tenders should be arranged according to the tender price. If the tender is an informal tender then generally, the highest tender is the one accepted but there may be a reason why a lower tender is accepted instead. That decision is up to the seller. For example, there may be personal reasons why the seller does not what the property sold to a particular person.
The formal tender system will have laid down the correct procedure for evaluating the tenders and this must be followed. Again the agent would sort the tenders by tender price. If any tender does not meet the formal tender requirements (eg not signed or dated) then it must be rejected immediately.
Generally, a council or government department would accept the highest tender that has met all the tender conditions. If there is more than one tender at the same highest price, the department or council should decide the winning tender.
A suggested spreadsheet summary of tenders lodged for evaluation purposes is as follows:
NB use landscape mode to provide more room.
TENDER PROPERTY…………………
ADDRESS ……………………………….
SELLER……………………………………..
TENDERS LODGED IN DESCENDING ORDER OF PRICE.
Tender # Tenderer’s name Tender Price Correct forms Y/N Decision




















3 Closing and communicating with tenderers
The agent should have a standard form letter to send to all tenderers. Information about the winning tender cannot be divulged to a losing tenderer as this would be a breach of privacy. Government departments and councils show all closed tenders on their web sites as this is an aid to transparency and probity.
The winning tenderer is advised with a special letter advising him/her that the required 10% deposit is to be paid before a specified date. The actual date would be in the documentation provided tenderers by the agent.
The deposit monies are held in the agent’s trust account with the agent as stakeholder.
The details of the sale are stated on the Sales Advice form (see learning outcome 3) sent to the parties solicitors/conveyancers. If the solicitors/conveyancers are satisfied with the information provided and their own searches, contracts are drawn up and exchanged at a mutually convenient time. There is binding contract between the parties on exchange. Once the offer has been accepted the conveyancing process is the same as for private treaty.
The procedure for a formal tender is stated in the tender documents, procedures and rules. Selected tenderers often have to pay a fee to tender. This fee is lost even if unsuccessful. Upon completion all tenderers are advised of the results.
Recommended letter to an unsuccessful tenderer:


Joe Bloggs
Stock and Station Agent
Licence # xxxxx

Address

Dear Sir or Madam

Your tender for ……………………

We wish to advise that unfortunately you were not successful in your tender for the above property.

However, we are only too pleased to help you in the purchase of other properties you may be interested in or perhaps, we can find another property that would suite your needs.


Yours faithfully

Signed agent

Date



Recommended letter to the succesful tenderer:


Joe Bloggs
Stock and Station Agent
Licence # xxxxx

Address

Dear Sir or Madam

Your tender for ……………………

We are pleased to advise that you have been successful in your tender for the above property.

As you know a 10% deposit is required tobe paid by xxxx as required under the contract of sale. We would be pleased if paid this money to us as soon as possible.

For further information please contact ……… on ………..


Yours faithfully

Signed agent

Date