Administrative Petition (Jerusalem) 15971-03-25 Fair Margin Ltd. v. State of Israel Ministry of Finance – Capital, Insurance and Savings Authority

Judgment

1. A petition in which the Petitioner seeks to cancel the decision of the Tenders Committee of Respondent 1 (hereinafter - the "Respondent"), whereby the bid of Respondent 2 (hereinafter - "Ness") was declared the winner of Tender 3/22 concerning "the establishment and operation of a database of individual price quotes and interest rates for institutional entities" (hereinafter - the "Tender"). According to the Petitioner, the Respondent should have disqualified Ness's proposal, inter alia, because it did not meet the conditions of no conflict of interest set out in the tender documents.  Simultaneously with the filing of the petition, the Petitioner filed a motion for an interim injunction prohibiting the realization of Ness's win.  The application was denied (decision of August 6, 2025), and an application for leave to appeal the decision was also denied (Request for Leave to Appeal 26320-08-25 Fair Margin v.  State of Israel et al.  (August 13, 2025)).  In this situation, Ness began to provide the service required in the tender, and it has been providing it for several months instead of the Petitioner, which had previously provided the service for more than a decade.
2. The Facts

The database, the establishment and operation of which is requested in the framework of the tender, is a technological system that includes an economic model for estimating the value of the non-tradable assets held by the institutional entities that manage financial assets for the public in Israel.  The valuation of these assets is complex because they are not tradable.  Thus, for example's sake only, it is necessary to evaluate the value of a loan given by an institutional body to any third party.  Such a loan is an asset, not tradable, whose value must be assessed.  The number of properties that are supposed to be included in the database is about 600 properties (transcript of the hearing in the petition, pp.  4, paras.  30-34).  The valuation of the aforementioned assets is of great importance, inter alia, for the purpose of calculating the pension due to the insured in the aforementioned entities, and for the purpose of determining the rate of management fees charged by the institutional entities from them.  The degree of importance of the database is indisputable, in view of the enormous financial scope of public assets managed by the institutional bodies, approximately ILS 2.7 trillion (paragraph 10 of the respondent's reply).

3. The tender we are dealing with was published on July 24, 2022. This tender was preceded by tenders published in 2003 and in the years 2009-2012.  In the tender published in 2003, a company called "Interest Rates", which is connected to one of Ness's shareholders, won.  In 2009, a new tender was published, which was won by the Petitioner before me.  Interest rates did not accept this win, and therefore it filed a petition with the Court for Administrative Affairs, claiming that the Petitioner did not meet the conditions of the absence of a conflict of interest included in the tender (Administrative Petition (Jerusalem) 44830-08-10 Interest Rates v.  Ministry of Finance (January 1, 2010)).  Interest Rates' petition was rejected by the Court for Administrative Affairs, but an appeal filed by Interest Rates to the Supreme Court was accepted (Appeal Petition/Administrative Claim 8696/10 Interest Rates v.  Ministry of Finance (September 6, 2011)).  Following the Supreme Court's ruling, in 2012 the Respondent published a new tender, in which interest rates were won.  This time, it was the Petitioner who did not accept the result, and therefore she filed a petition with the Court for Administrative Affairs, claiming that the interest rate proposal did not meet the conditions of the tender regarding the employment of subcontractors (Administrative Petition (Jerusalem) 45692-11-12 Fair Margin v.  State of Israel (December 12, 2012)).  The petition was mostly rejected, but the court ruled that the discussion of the proposals submitted in the tender would return to the tenders committee.  Subsequently, during the discussions in the tenders committee, the Tenders Committee withdrew interest rates from its proposal, and the Petitioner was declared the winner of the tender.  In light of this, the Petitioner provided the services according to the tender from March 21, 2011 until the most recent period.  The impression that arises from these facts is that the tender we are dealing with is relevant to a very limited market of companies that are interested in or able to participate in it, in fact only two companies - the Petitioner and Ness (see in this context - the transcript of the minutes, pp.  5, 34 - pp.  6, 22).  This is also evidenced by the fact that even in the current tender, only two of these companies submitted bids.
4. The Ottoman Settlement [Old Version] 1916I will discuss below a number of provisions in the tender that are important for our purposes.

12-34-56-78 Chekhov v.  State of Israel, Pis.  D.  51 (2) Section 1.5 of the tender deals with "additional undertakings and approvals that the bidder must provide in the framework of the tender proposal".  Section 1.5.4 specifies requirements relating to the independence of the winning supplier.  Section 1.5.4(a) establishes in this context a general determination whereby: