Caselaw

Appeal Petition/Administrative Claim 20037-03-25 Zohar Hutzot Ltd. v. Kiryat Ono Municipality - part 9

April 22, 2025
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"In this case, there was no reason to suffice with sending the message by e-mail without verifying its receipt.  This is in view of the combination of two data of special weight: one, the content of the notice, which relates to a subject of great importance that the bidder is expected to be particularly careful about, and which is liable to disqualify his proposal if he does not do so; The second is the date of sending the notice, two days before the deadline for submitting bids for the tender.  The cumulative weight of the aforementioned two data leads to the fact that the fulfillment of the obligations imposed on the Municipality, within the framework of the option that it reserved for itself in the terms of the tender to notify of changes in its terms, in an acceptable manner and in good faith, requires that all the abstainers receive the notice.  When this was not done, there was a flaw in the way the municipality purported to bring to the attention of the "tender buyers" the change relating to the terms of the guarantee.  The appellant was entitled to act in accordance with what was stated in the original tender documents, and it cannot be attributed to the fact that it did not act in accordance with what was stated in the notice.

[...]

In view of the aforesaid, I am of the opinion that there was no defect in the appellant's bid and therefore there was no reason to cancel its winning of the tender.  As stated, this conclusion is based on the determination that there was a defect in the manner in which the notice was conveyed to the potential bidders, and therefore the change in the terms of the tender that the municipality sought to carry out was not perfected.  The significance of the aforesaid determination is that the provision binding on the appellant is the one that was in effect prior to the sending of the notice, a notice that has no bearing on the relationship between the municipality and the appellant.  The municipality's poor conduct created a situation in which towards some of the bidders the wording of the guarantee was according to what was stated in the notice, while as far as the appellant was concerned, the wording of the guarantee was the original version.  In doing so, the municipality (and not any of the bidders) caused a malfunction.  A situation arose in which the bidders who received the notice and acted in accordance with it submitted a close guarantee.  On the other hand, the appellant, who did not receive the notice, was entitled (and in fact even obligated, according to the rule that even a beneficiary guarantee is defective) to attach to her offer a guarantee that is not attached.  This proposal of the appellant was not defective, and therefore there was no reason to prevent it from winning the tender" (paragraphs 4-5 of the judgment of Justice Z.  Zilbertal).

  1. In our case, the tenders committee acted in an even more flawed manner than the manner in which the tenders committee acted in the case of Barak 555. This is because not only did the tenders committee send an email message that includes the need to submit an amended letter of guarantee only a few days before the deadline for submitting the proposals; However, in the email message attached to Clarification Document 5, which instructed the need to submit an amended letter of guarantee , this was not mentioned in the body of the text; This was the second email sent on the same day with the same title; And Clarification Document 5 was included in the attachment to the second email, only after dozens of pages.  Therefore, as in the case of Barak 555, it seems to me that the bank guarantees that were attached to the proposals of respondents 3-5 cannot be regarded as guarantees that were flawed.
  2. More than necessary, I will note that even if I were of the opinion that there was a defect in the guarantees submitted by respondents 3-5, then, in my view, this is not a defect that justifies the disqualification of their proposals.

The Customary Rule Regarding Defects in a Bank Guarantee, As a general rule, Takes a strict and rigid approach.  About-According to this approach, In most cases, The existence of a defect in the bank guarantee justifies the disqualification of the entire proposal (See, For example: Appeal Petition/Administrative Claim 1873/12 Assum Building Contracting Company in Tax Appeal N' University Ben Gurion In the Negev, Paragraph 4 To the judge's judgment N' Handel [Nevo] (6.8.2012); Appeal Petition/Administrative Claim 2628/11 Afcon Control and Automation in Tax Appeals N' State of Israel - Government Water and Sewage Authority, Paragraph 12 To the judge's judgment From' Enlightened [Nevo] (1.1.2012); Appeal Petition/Administrative Claim 6242/09 Holiday'Ezie N' The National Insurance Institute, Paragraph 11 To the judge's judgment S' III'And Bran [Nevo] (10.11.2009)).

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