Legal Updates

In the absence of an explicit provision a shareholder’s experience can not be attributed to a new company established for the purpose of participating in a tender

August 27, 2020

In a tender for renovation works and concession to operate a beach kiosk, the winning bid was of a company incorporated immediately prior to the submission of the bid and based on the experience of its shareholder.
The Court held that the winning bid should be disqualified due to failure to meet the experience requirement that constitutes a threshold condition for participation in the tender. A threshold condition is the "entry ticket" to the tender. Failure to comply with the threshold conditions is by itself a material defect, regardless of the nature of the threshold condition itself. Here, the threshold conditions required that the bidder have a minimum of two years experience, but the experience was of the shareholder and not the bidder itself (the company which was just established). The shareholder did not apply for clarification on the matter, despite clauses in the tender documents which indicate that the identity of the bidder is not a technical or formal matter. Thus, the winning bid should be disqualified in order to adhere to the language of the tender and maintain public trust in the tender process.