Final answer:
Privilege clauses in bidding contracts allow owners to reject any bid but are not recommended due to the potential lack of transparency, fairness, and potential for favouritism in the bidding process. These clauses can discourage bidders and undermine the competitive nature of bidding.
Step-by-step explanation:
Privilege Clauses in Bidding Contracts
Privilege clauses in bidding contracts are provisions that allow the project owner to reject any bid, even after the bidding process is complete. They are often phrased as 'owner reserves the right to reject any and all bids.' The intention behind these clauses is to provide flexibility to the owner, but they are not recommended because they can lead to a lack of transparency and fairness in the bidding process. Bidders may feel discouraged from participating if they believe their efforts could be disregarded without a substantial reason. Moreover, such clauses can foster an environment where favouritism or corruption could influence the decision-making process. This could undermine the competitive nature of bidding, where the goal is to select the most qualified bidder with the most beneficial offer. It is advised that bidding contracts maintain objectivity and provide clear criteria for bid selection to ensure a level playing ground and to promote fairness in awarding contracts.