COVID-19 supply chain disruptions and how suppliers and service providers have handled such disruptions have prompted procurement teams to reconsider whether business should be shifted away from suppliers that have performed unsatisfactorily during the pandemic. In this connection, the request for proposal (“RFP”) process continues to be a valuable tool for buyers of goods and services to evaluate new supply and service solutions. There is no better time to consider whether a buyer’s RFP approach, and the form contracts submitted with the RFPs, can be improved.
When a buyer has control of the RFP process, it is in a favorable position to negotiate aspects of a contract that may have been glossed over in the pre-pandemic world. A few provisions that buyers should pay particular attention to going forward are force majeure, termination for convenience, and suspension.
More than ever, it is essential that the buyer’s form contract is sent simultaneously with the RFP document. Due to the urgency of certain supplier selection processes, there is a temptation to send out the RFP document and follow up with the form contract later, and in some instances, the form contract is not provided until the new supplier has been selected. Providing the form contract early in the RFP process and requiring the supplier’s redline as part of the response to the RFP will give the buyer more leverage in negotiating the contract, will identify at an early stage any potential major contractual hurdles, and will provide a glimpse into how easy or difficult it will be to work with the supplier on a go-forward basis.
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