Administrative Petition (Jerusalem) 65567-06-23 Nahor Netivei Transportation Ltd. v. Ministry of Transport and Road Safety - part 2

The service required in the tender is a complex service from an operational, logistical and economic point of view.  Therefore, the bidders were required to attach to their financial proposals a detailed business plan, in accordance with the outline set out in Appendix 16 to the tender.  This requirement is intended to enable the Ministry of Transport to understand the business and economic infrastructure underlying each and every bidder's proposal.  In the aforementioned Appendix 16, detailed instructions regarding the structure of the business plan were determined.  It was determined that the business plan must include data regarding the investments that the bidder intends to invest in order to realize the tender (purchase of buses, investments in technology and infrastructure, etc.), and regarding the sources of financing for these investments; It was determined that the bidder was required to specify the expected income from the operation of the lines; It was determined that the bidder was required to specify the planned operating expenses, which include, inter alia, wage expenses, and expenses for energy and oils; The bidder is also required to specify the amounts of expenses expected to him in the areas of sales, marketing, and management, and the amount of general expenses expected to him.  In addition to the aforesaid, the bidders were required to include in the business plan a chapter dealing with "Required Profit, Risk Factors and Unforeseen (in the Fund)" (hereinafter for short – the "Fund").  According to clause 1.7 of Appendix 16, in this chapter of the business plan, each bidder is required to specify what the planned profit is in the framework of the provision of the service, and what is the bidder's estimate regarding the amount to be reserved for unforeseen costs involved in operating the service.  It was also clarified in paragraph 1.7 of Appendix 16 – the section that is the focus of the petition before me – that in the framework of this chapter of the business plan, the bidder must include the amount of royalties that he intends to pay to the Ministry of Transport, to the extent that he intends to pay royalties, without specifying in the framework of the business plan the exact amount of royalties, and the financing expenses required for the payment of the royalties.  In addition, it was explicitly emphasized in clause 1.7 that: "The amount of royalties must be less than the amount accumulated in this clause" – sharp, smooth and simple.  The significance of this provision is that the amount of royalties that the bidder will state in his financial proposal, which will be submitted in an envelope separate from the envelope in which the business plan will be submitted, must be less than the amount that will be recorded in the business plan in the chapter of the business plan.  The logic of this provision is clear, since it is not possible for the amount of royalties to be paid by the bidder to exceed the amount of the royalties, which includes the royalties themselves, the unexpected expenses of the bidder, and the profit that the bidder expects from the provision of the service.