When bids are made on the basis of
The Danish Act on Tender Procedures (Tilbudsloven) the client has the possibility of negotiating with the bidder as follows:
- When the criteria is ’lowest bid’ the client is only allowed to negotiate with the lowest bidder.
- When the criteria is ’the most economical advantageous’ the client is allowed to negotiate with the top three best bids
Reference is made to
The Danish Act on Tender Procedures (Tilbudsloven) sections 10 and 11 concerning the right to negotiate and negotiation procedures.
It is not unusual that the client asks the lowest bidding main contractor to present cost saving measures.
The main contractor and his sub-contractors and suppliers will jointly analyze the bid and elaborate a ’cost saving catalogue’ and identify consequences of proposed savings.
Subsequently, the cost savings catalogue will be presented to the client and his consultants in a meeting where they will discuss and take a position on the individual savings, and decide which savings they accept.
Once the savings are accepted, a final contract may be signed on the basis of the reduced bid.
In addition to the actual savings, the savings catalogue shall also clearly specify what other consequences the savings may have in relation to the initial bid, for example: Life expectancy, wearability, operational expenditure, the look (samples), delivery time, reservations, changes in the time schedule, new working methods etc.
Additional conditions may apply.
In accordance with AB92 section 6 / AB 18 § 9 the contractor shall provide security for the performance of his obligations towards the client. The bond provided shall correspond to 15% of the contract sum. The security will be reduced re to AB 92 § 6 / AB 18 § 9. Please notice that the reduction of the security according to AB 18 goes from the contract sum including possible extra work / excluding possible minor work. Re AB 18 § 9 subsection 3.
In accordance with AB92 section 7 / AB 18 § 10 the client shall – if the contractor so requires, – provide a performance bond for the due performance of his pecuniary obligations towards the contractor.
Public clients and – re AB 18 – also Housing associations do not have to provide a security.
The contractor is entitled to demand an increased performance bond in case additional works are added to the contract (AB 92 § 14 / AB 18 § 23) and in case the the total remuneration for all additional works – apart from those already paid for – exceeds 50% of one month average as agreed in the initial contract.
The contract specifies penalties for delays re stated in the tender material
In cases where the contract states that the contract sum shall be adjusted in accordance with index changes, such adjustments shall be made in accordance with AB92 section 22, subs. 6 / AB 18 §§ 34 and 35 and the relevant index must be stated. See indexation figures at Dansk statistik (Denmark’s Statistics).
If the contractor fails to submit the final account to the client within a defined period of time, he shall forfeit his right (i.e. he looses his right) to claim payment as reimbursement for wage and price increases – cf. AB92 section 22, subs. 8 and 9 / AB 18 § 36 subsection 7.
Once the main contractor has entered a contract with the client he may subsequently enter contracts with his sub-contractors and accept bids from suppliers. Contract conditions will be based upon the tender documents that the main contractor has submitted to his sub-contractor as well as the sub-contractor’s bid and the result of negotiations.
AB92 section 8 / AB 18 § 11 states that the client shall take out and pay for the usual fire and tempest insurance. In this context it is important that the contractor is included in the insurance policy. In AB 92 the contractor has to ask for it – in AB 18 the client has to include the contractor in the insurance. In doing so, the contractor will be able to claim the insurance company directly in case of damage.
This clause is included in the standard reservations prepared by The Danish Construction Association (Dansk Byggeri) and when the contractor uses these reservations, he will be covered automatically.
According to AB 18 the client has to cover the own risk – in AB 92 it is normally the Contractor has to cover the own risk.
It is the sole responsibility of the contractor to take out an insurance covering accidental damages such as theft and wanton destruction. In case the tender documents mention that the client has taken out an ’all-risk’ insurance the contractor will be covered by this insurance
According to AB 18 the contractor has to take out an insurance covering product liability.