Pricing the Risks Arising from the Terms of the Contract

Pricing the risks arising from the terms of the contract is where a firm participating in a tender takes into account, in forming its tender price, not only the costs arising from the procurement legislation but also all the financial, technical and legal consequences imposed on it by the contracting authority in the tender documents, comprising the technical specifications, the project and the draft contract. Firms accordingly reflect in their tender prices the authority's conduct in previous contracts, delays in its cash flow and ambiguities in the tender documents.