Legal tips and viewpoints from our expert panel of purchasers and lawyers
Our panel, clockwise from the back: Joel Ramsey, Lori Benson, Marvin Huberman, Shawn Casemore and Stan Gal.
FROM THE PURCHASINGB2B MARCH/APRIL 2012 PRINT EDITION:
From navigating legal language and controlling risk to managing disputes, today’s procurement department has its hands full with legal issues. In February, Purchasingb2b brought together industry professionals with legal experts to discuss what purchasers need to know to navigate the legal landscape. At the table were Toronto-based litigation lawyer and ADR Chambers mediator and arbitrator Marvin Huberman; strategic sourcing director for Ernst & Young Canada, Lori Benson; Shawn Casemore, president of Casemore & Company; Stan Gal, director of supplies and services, finance department, Regional Municipality of York; and Joel Ramsey, partner at Osler, Hoskin & Harcourt.
Clearing the language
The panel discussed RFPs and how to formulate the right legal language when doing so. York Region’s Stan Gal noted an RFP’s function is to reflect the scope of the work being asked for and lay out the buyer’s needs. Procurement must evaluate proposals against the RFP and its evaluation criteria, not against other bids. As well, he noted, procurement professionals should stick with the tasks they’re best at, such as putting together RFPs. “The role of the purchasing professional should be monitoring the methodology, to be responsible for the process, not the evaluation,” he said. “I’m not an expert in engineering, I’m not a legal expert, but one thing I do know is how to develop documents.”
Shawn Casemore of Casemore & Company recommended purchasing professionals meet with their legal departments from the start when developing an RFP or other process. That helps ensure all parties are on the same page in terms of legal content and document wording, he said. “With that relationship at the outset, we can sit down and proactively look at something ahead of time,” Casemore said. “And we’re now talking the same language and can have a discussion and come up with either an interpretation or, if we’re drafting a document, come up with language that we both agree on. If I don’t understand something you can explain it to me and vice versa. I’ve never had any problems if I’m proactive versus if I don’t involve legal, where I think I should and later on I’ve got a problem.”
A back-and-forth process between procurement and legal when drafting an RFP is common, said Gal, and it pays to go through the document and customize the language. During that process, he stressed, ensure not to set rules that will be difficult to comply with. “If you set out evaluation criteria and response criteria that you’re not quite sure about, you might find yourself in trouble,” he said.
Managing risk—including legal risk—is increasingly important for organizations, Gal said. Public agencies have tried to pass on more of that risk to contractors. But as a consequence, those organizations wind up paying more for some goods or services. “There’s also third-party risk management for losses, where there are injuries on construction sites and—especially in the municipal field—we’re dealing with roads under construction,” Gal said. “At the same time, you’ve got the public using those roads. So we’re subject to a lot of risk on that.”
