After the bids were opened the Tenders Committee decides to cancel the tender and publish a new and identical tender instead. Is that legal?
In general, a tender may be canceled at almost any stage thereof up until execution of an agreement with the tender winner. Thus, a decision to cancel the tender may be made after its publication and before any bids were submitted; After bids were submitted, but before the opening of the bids; After the opening of the bids, but before deciding on the winner; After the decision but before notice has been given to the winner and even when the winner has already been notified, but an agreement has not yet been signed.
The Courts recognize a wide variety of reasons, which may be considered in certain circumstances, as justifying cancellation of a tender. Thus, for example, cancellation due to a defect in the wording of the tender, which might mislead the bidders who participated in the tender as well as potential bidders who did not finally made an offer in the tender; cancellation due to the tender publisher’s desire to perform the work itself or for budgetary reasons; Cancelation due lack of any worthy proposal and more. While the premise is that the Court will not usually interfere with the discretion of the tenders committee and its tendency is not to oblige the bidder to enter into a contract that it does not wish or in a contract that may result in wasting the public's resources, the Court will intervene if the decision to cancel exceeds the scope of reasonableness.
The Court will examine the reasonableness of the tender committee's decision and will examine the reasoning for cancellation, the date in which the decision was made, at which stage the decision was taken and whether the decision to cancel the tender violates other principles underlying the tender laws (such as the equality principle). If the decision to cancel was made at an earlier stage, it is safer to assume that it will be considered reasonable, and vice versa, the later the decision, the higher scrutiny the Court will apply. For example, a tender committee’s arbitrary decision to cancel the tender, made after the bids were opened and with no coherent reason, was canceled by the Court especially when the reasons for cancellation described to the Court were not discussed in the tender’s committee at the relevant time. Arbitrary decision regarding the cancellation of the tender after the bids were revealed materially undermines the reliance and expectation of bidders. It is also may open the door to corruption and prohibited preference and is extremely suspicious when a new tender is published to replace the one cancelled.
However, in tenders the manner of acting of a person harmed by the decision of the tenders committee may have a material effect on the chances of the proceeding. Thus, for example, a bidder who makes a bid in a new tender replacing a canceled tender may find itself deemed to have waived claims regarding the cancellation of the first tender. Therefore, it is recommended to act without delay and to consult with an attorney who has experience in the field of tenders at every stage of the tender.