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Publication
Merger law reform in Australia: What next after the Exposure Draft?
As expected, the Australian Commonwealth Treasury released an exposure draft for the proposed new Australian merger regime on 24 July 2024.
Author:
Australia | Publication | May 2021
Anyone who works in the contracting and procurement space knows that it is possible (some would say ‘inevitable’) there may be a need to run a series of related procurements. It could be that the first procurement did not yield a value for money outcome and you need to try again, or perhaps you have just acquired some supplies and now you need to procure associated support. Maybe the contract from an earlier procurement will terminate or expire, and you need to procure ongoing or updated services.
Whatever the scenario may be, you have no doubt pondered whether material tendered for the original procurement can be used in the subsequent procurement process. If not, you’re thinking about it now, aren’t you? The purpose of this article is provide an overview of the considerations that you should take into account when contemplating if (and, if so, to what extent) tendered material could be used for such purposes.
It is unusual for there to be a “one size fits all” answer to what you can or can’t do with tendered material. Although it may be tempting to jump head first into investigating your rights, it is important to first understand what material you want to release, to whom and for what purpose; this will help t you identify what rights you require.
While it sounds simple enough to say you want to release and use material that had been tendered as part of a particular procurement, it is important to note that tendered material comes in many forms and may have been provided at different points during the tender process. Was it material submitted as part of a tenderer’s original tender? Was it material that had been altered or supplied during offer definition activities? Was it material obtained during contract negotiations? Was it material that had been prepared in draft for approval following contract execution , such as draft management plans and other data items?
Understanding where in the tender process the material originated will assist you to identify the relevant rights and limitations that may apply to the disclosure and use of the material. For example, your rights to material tendered as part of the original bid may be governed (at least in part) by the conditions of tender, whereas your rights to material submitted during offer definition or negotiation phases may instead (or in addition) be governed by a process deed signed by the parties in respect of the relevant phase.
It would not be surprising for different limitations to be placed on the use of tendered material depending on the class of recipients, including (for example) distinct purposes for which each recipient may use the tendered material. Therefore, it is important to understand to whom you want to provide the material, and for what purpose.
Common recipients and uses of previously tendered material in subsequent procurement processes include the following:
Proposed recipient | Material provided for the purpose of… |
Organisation’s employees | Preparing request documentation and internal briefs. |
Organisation’s contracted service providers | Assisting with request documentation and advising on the procurement process. |
Potential tenderers (eg, through an RFT data pack) | Providing context to the procurement and informing tender responses. |
Successful tenderer / incoming contractor (eg, through customer furnished material) | Performing the relevant contract – eg, for incorporation in (or simply to inform) contract deliverables. |
Now that you know what you want to release, to whom and for what purpose, the next step is to understand what rights you need to achieve this. This will help you to identify any gaps that need to be addressed.
So, do you need a right only to disclose the material (which may be the case if you’re providing the material to persons for information only)? Do you need to exercise any IP rights in the material (eg, to reproduce extracts of the material within internal approval documentation)? Maybe you need to sub-licence IP rights to a third party (eg, to tenderers so they can adapt the material for their responses)?
It is important to note that the required rights may not always be obvious. For example, although, on the face of it, use of material only for internal informational purposes (eg, as a reference to “inspire” the creation of new request documentation) may only require a right to disclose the tendered material within the organisation, that use may in fact overlap with a requirement for the following rights:
In our experience, understanding what rights are required is just as important as understanding what rights you actually have. A misunderstanding of the rights you require could result in the use of material in a manner that (unintentionally) infringes another party’s rights.
Finally, we come to the question that’s probably at the crux of why you’re reading this article in the first place. What rights do you have to use the tendered material? While we can’t answer this question for you (at least not in a generic article such as this one – remember, one size does not fit all!), we can point you in the right direction.
Key areas to consider include the following:
As you can see, the question of what rights you have can be a tricky one to answer. This is especially the case if the material you want to use comprises both “new” (commonly referred to as Foreground IP) and “pre-existing” IP (commonly referred to as Background IP or Third Party IP, depending on ownership). There will not necessarily be a clear delineation regarding what will be classified as Foreground IP, Background IP or Third Party IP, and it may be difficult to distinguish between “new” and “pre-existing” IP in tendered material that is:
Understanding this distinction is important, as your rights to Foreground IP, Background IP and Third Party IP are often different.
If the rights you need, and the rights you have, align – you’re good to go. But what happens if they don’t align? What should you do if you don’t have sufficient rights in the tendered material?
In this case, you should:
Lastly, you may wish to consider engaging with the owner of the tendered material to negotiate the additional rights you require to close the gap between what you can do and what you want to do with the material.
Due to the amount of time that it can take to complete the above analysis (as well as the time that may be required to negotiate additional rights from multiple suppliers), we recommend that you consider as early as possible in the process what rights may be needed for your procurement.
The good news is that once you are familiar with the rights and issues that can arise when seeking to use tendered material in subsequent procurement processes, you will be able to apply your experience and any lessons learnt to the planning and development of future procurements. This may include, for example, ensuring that:
The guidance in this article is provided at a high level only. We suggest you seek targeted legal advice if you are uncertain what rights you require or have for your procurement activity.
Publication
As expected, the Australian Commonwealth Treasury released an exposure draft for the proposed new Australian merger regime on 24 July 2024.
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