The risk of bias can be mitigated through rigorous governance in the tender evaluation process. Failure to observe governance in tender evaluation can result in reputational risk which can bring the procuring entity into disrepute, especially if bidders demand debriefing. When governance protocols are observed, there is transparency and any bidder who questions the decision of the evaluating panel can get honest feedback. It is therefore important that the tender process has clear governance protocols in place, from receipt of tender submissions to award. Below are some of the practices that organisations and businesses can adopt to make the tender process free of bias.
- Strict adherence to the RFP/ RFQ:
To ensure a fair evaluation process, it is important that the evaluation panel does not show any form of favour to any bidder. All bids that are not aligned to the Request for Proposal or Request for Quotation must be eliminated. The evaluating panel must validate that all bidders have followed the requirements as set out in the request. The tender process must be kept very competitive and any bidder not aligned must be discarded.
- Adequate and independent evaluators:
To eliminate the risk of bias in tender evaluations, there should be a minimum of three panelists. Having a broad evaluation panel minimises bias and can manage procurement fraud. Unfortunately, we cannot turn a blind eye to the existence of procurement fraud. Controls like having a diverse panel can reduce this risk. For instance, if there is collusion between a bidder and some of the panelists, bias scores can be neutralised by the scores of other panelists who are not a part of the scheme to defraud. It may also be ineffective for a bidder to bribe the whole panel because fraud schemes are clandestine in nature and therefore involve only a few people.
- Skilled and knowledgeable evaluators:
For a tender process to demonstrate fairness and no bias, it is important that the evaluators or panelists are knowledgeable in the tender process, the product/service being procured and have sufficient institutional knowledge to ensure that the tender is awarded to the most deserving bidder who is also aligned to the strategic needs of the organisation. Allowing employees who are not knowledgeable can result in an unfair evaluation as they do not have adequate training in how to evaluate. Such employees may second as observers for some time as part of skills transfer.
- Declaration of interests:
All panelists for a tender evaluation must declare interests. These can be disclosures on close relations, business associates or interactions which may be detrimental to the independence of the evaluators. The interests must be declared at the beginning of the evaluation and the Procurement Manager, Risk Manager or Auditor must assess all of them. If the interests are adverse, the respective panelist must be excused from the evaluation. While the declaration of interest control may not be the most effective as it relies on the honesty of employees, it indemnifies the organisation where there is a major breakdown in the tender evaluation process in which there is evidence of bias by a panelist.
- Audit/Risk Managers as governance observers:
The governance observers ensure that the process is fair and that all evaluators score bids independently. To eliminate bias, the governance observers ensure that no one influences scores among the panelists. All scores must be independent and influenced only by submission of bids. Where there is need for discussion, the observers ensure that this occurs in a manner that does not enable bias in the process.
- Approval through independent governance forum:
A governance forum or committee is another layer that ensures that governance is upheld. This forum serves as an approval forum to mitigate against any bias that may emanate from the tender evaluation process. The forum makes the final sanctioning of the bidders recommended by the tender evaluation panel. The committee must be made up of different skillsets and highly experienced members from different departments such as Legal, Risk, Finance, Procurement and Operations, or any as deemed necessary by the organisation. Different committee members provide advisory from the context of their area of expertise and get to ask pertinent questions to ensure that no stone is left unturned. They are the last stop in ensuring that whatever the evaluating panel might have missed is picked and addressed accordingly.
In conclusion, it is worth noting that organisations may not always eliminate the risk of bias in tender evaluations. However, demonstrable effort must be made towards minimising this risk to ensure that tender evaluations are awarded on merit to ensure that the reputation of the procuring entity is not compromised.