You lost the tender, is it the end of the story?

You lost the tender, is it the end of the story?

Yair Aloni, Adv.
January 2, 2018

A client of our firm, a Cypriot maritime bunkering company that we have been escorting for several years in its activity of bunkering at the Haifa Port, participated in a tender for the bunkering services at the Ashdod Port, but received a notice that another bidder won the tender. Under such circumstances need it immediately petition the Court or can it first act to obtain data and consider its options?

A well-known principle of administrative law in general and in the tenders in particular, is that contentions must be raised without delay. The law provides a time limit of 45 days from the day the decision was published or from the date on which notice was received or was learnt of, whichever is earlier. One who exceeds this time limit, may encounter a procedural barrier that will prevent one from moving the Court. However, sometimes circumstances will turn contentions moot long before these 45 days have elapsed.

Therefore, it is advisable to contact the publisher of the tender and request to review the winning bid documentation, minutes and protocols of the tenders committee meetings and legal opinions on which the decision was based upon, all immediately after receiving of the non-winning notice at the tender. The date on which the bidder was able to exercise its right to access information will be considered as the point from which the 45 days for submission of the petition are calculated, because only after examining such documentation will it be possible to examine whether flaws exist in the exercise of discretion and decision making process in the choosing of the wining bid.

It is advisable not to take lightly the right to review the documentation of the winning bid, because one may discover that the selected bidder did not meet the threshold conditions set out in the tender or that its proposal was defected (such as the inclusion of a guarantee not in accordance with the tender requirements). In addition, a careful review of the tenders committee's protocols will enable an examination of the manner in which the discretion of the members of the tenders committee was exercised and sometimes even reveal that access to certain documents was not granted and such are to be demanded. For example, it will be possible to see whether the tenders committee exercised its administrative power independently or blindly adopted the recommendations of an outside consultant, whether a substantive discussion was held before a decision was made and whether the tenders committee's decision was reasoned and reasonable. A quick review of the tender documents and the documents of the winning bid will also enable a better understanding of the factual basis and will enable to base the legal arguments.

Once the claims have been substantiated, it is necessary to approach the tenders committee as soon as possible and present the arguments fully, due the duty to exhaust the proceedings before the administrative authority prior to approaching to the Court. In a case that was discussed at Court several years ago a tenders committee did not answer an approach of a bidder but it was held that petitioning the Court before a final decision was made by the tenders committee may be considered failure to exhaust proceedings, despite the delay. Thus, a legitimate attempt to receive a substantive response to claims raised and receipt of a final position of the tenders committee, as opposed to an artificial attempt to extend the time for submission of the petition, will not be considered as delay.

In light of the fact that a petitioner's conduct is of great importance, it is important to consult with an attorney from the beginning of the tender process in general, and especially upon the receipt of a non-winning notice and this, inter alia, in order to examine the best methods of action, including the need to file an application for an injunction to prevent consummation of the tender prior to a decision by the Court.