The Hidden Rules of IT Project Tendering: Laws, Principles, and Caveats You Must Know
Last updated: January 29, 2026 Read in fullscreen view
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IT project tendering is not merely a procurement exercise - it is a complex socio-technical, legal, and economic system governed by explicit regulations and implicit laws.
Ignoring these principles often leads to cost overruns, disputes, failed vendors, or litigation.
Below is a curated list of key laws, rules, and tendering caveats that silently shape the success - or failure - of IT procurement.
1. The Law of Incomplete Requirements
What
No IT tender ever contains fully complete, unambiguous, and future-proof requirements.
How
Business stakeholders describe needs based on current understanding, while technical feasibility and edge cases remain unknown until execution.
Why
- Bounded rationality
- Information asymmetry between business and vendors
- Organizational silos
When it applies
- RFP drafting
- Fixed-price bidding
- Early-stage digital transformation projects
Implication: Over-specifying early often backfires; under-specifying creates legal ambiguity.
2. The Fixed-Price Illusion Rule
What
Fixed-price contracts create an illusion of certainty rather than actual risk elimination.
How
Vendors price in:
- Risk buffers
- Change penalties
- Conservative assumptions
Why
Risk is not removed - it is reallocated, usually inefficiently.
When it applies
- Government tenders
- Waterfall-based procurement
- Compliance-heavy industries
Paradox: The more uncertain the scope, the more expensive a “fixed” price becomes.
3. Goodhart’s Law in Vendor Evaluation
What
“When a measure becomes a target, it ceases to be a good measure.”
How
Vendors optimize proposals to score well on evaluation criteria rather than deliver real value.
Why
- Score-based tender matrices
- Over-weighted compliance checklists
- Lowest-bid bias
When it applies
- Public tenders
- Price-heavy scoring models
- Rigid procurement frameworks
Result: The best proposal on paper may be the worst in execution.
4. The Lowest Bidder Fallacy
What
Selecting the lowest bid rarely leads to the lowest total cost of ownership (TCO).
How
Hidden costs emerge through:
- Change requests
- Quality debt
- Schedule slippage
- Vendor churn
Why
IT systems are living systems, not commodities.
When it applies
- Cost-driven tenders
- Commoditization mindset in software projects
5. The Adverse Selection Principle
What
Tender processes tend to attract vendors most willing to accept unfavorable or risky contracts.
How
Strong vendors avoid:
- Unrealistic SLAs
- One-sided penalty clauses
- Ill-defined scopes
Why
High-quality vendors protect long-term viability over short-term wins.
When it applies
- Aggressive legal terms
- “Take-it-or-leave-it” RFPs
Irony: The safer the contract looks for the buyer, the riskier the vendor pool becomes.
6. Parkinson’s Law of Scope Consumption
What
Work expands to fill the scope, budget, and timeline provided.
How
If requirements are loosely defined, vendors will:
- Interpret scope defensively
- Expand effort where ambiguity exists
Why
Commercial incentives favor scope maximization under fixed contracts.
When it applies
- Vague SOWs
- Feature-based pricing without outcome metrics
7. The Change Request Inevitability Rule
What
Change Requests (CRs) are not a failure - they are mathematically inevitable.
How
New information emerges only during:
- User testing
- Integration
- Real-world usage
Why
Complex systems cannot be fully specified upfront.
When it applies
- Software development
- ERP / Core system replacement
- AI / Data platforms
Best practice: Plan CR governance, not CR avoidance.
8. Conway’s Law in Tendered Solutions
What
System architecture mirrors the organizational structure of the vendor.
How
- Siloed vendors produce fragmented systems
- Weak governance yields brittle integrations
Why
Communication pathways define design decisions.
When it applies
- Large SI-led projects
- Multi-vendor tenders
9. The Vendor Lock-In Caveat
What
Tender outcomes often embed long-term dependency, intentionally or not.
How
- Proprietary frameworks
- Limited IP ownership
- Opaque documentation
Why
Switching costs are underestimated during procurement.
When it applies
- Platform-based solutions
- SaaS + customization models
Mitigation: Escrow, IP clauses, exit strategies.
10. The Escalation of Commitment Trap
What
Organizations continue investing in failing vendors to justify past decisions.
How
- Sunk cost fallacy
- Political protection of procurement outcomes
Why
Admitting tender failure has reputational and career costs.
When it applies
- Long-term IT contracts
- Executive-sponsored vendor selections
11. The Legal–Delivery Misalignment Law
What
Contracts are written for disputes; projects are delivered through collaboration.
How
Overly legalistic contracts:
- Reduce trust
- Increase defensive behavior
- Slow decision-making
Why
Legal risk optimization conflicts with delivery agility.
When it applies
- Litigation-driven procurement cultures
- Highly regulated sectors
12. The “Compliance ≠ Capability” Rule
What
A compliant proposal is not necessarily a capable one.
How
Vendors can meet documentation requirements without real execution strength.
Why
Paper compliance is easier than operational excellence.
When it applies
- Documentation-heavy RFPs
- Vendor self-declared capabilities
Closing Thought
IT tendering is governed as much by economic laws, behavioral paradoxes, and organizational dynamics as by formal procurement rules.
Successful buyers do not attempt to eliminate uncertainty - they design tender processes that acknowledge and manage it.
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