13.2.1 A common approach in the past has been for the Authority to assume automatically that it should hand over full responsibility to the Contractor for verifying information. This involves the Contractor (and other bidders) in due diligence expense in ascertaining what is being bid against and what contingencies to include. Contractors have accepted this risk in Projects in which the due diligence is small in relation to the rest of the Project, particularly where the Project involves only the provision of a new service.
13.2.2 Contractors may be reluctant, however, to bear this risk where the Project involves a great deal of costly due diligence (relative to the size of the Project) or where the Authority is the sole source of information which cannot otherwise be verified. This is usually the case where the Authority is handing over a service (and possibly employees) which has been provided in-house for an extended period and/or a range of Assets in uncertain condition.
13.2.3 If the Contractor bears the risk of information being inaccurate, then its bid price may increase to reflect the level of risk assumed. The Authority should consider whether it can obtain better value for money (taking into account the overall risk allocation) if it is able to bear some of this risk itself or transfer some of this risk to a third party. If the risk is sufficiently large it will affect the ability of some or all bidders to submit bids.
13.2.4 So far as title to any land and buildings being provided by the Authority is concerned, the Authority should warrant title (and its replies to enquiries) itself. Required drafting is set out below, and applies unless there are particular reasons why the Authority wishes to provide a certificate of title from its lawyers in which case: (i) the certificate should have a duty of care extended to the Contractor (ii) any replies to enquiries should be duly warranted by the Authority and (iii) the required drafting below will need amending). See below at Clause 13.4.4 (Authority Title Warranty) for required drafting.