Legal Updates

A tender’s threshold conditions must be interpreted purposefully in way that fulfils the tender purpose and upholds the proposals as much as possible

January 24, 2021

The winner of a tender for Covid19 testing system at the Ben Gurion Airport lacked experience in the field and sought to base its experience on an experienced advisor it hired.
The Court held that the winning bid did not meet the threshold conditions set in the tender and therefore the winning proposal should be disqualified. The concept of public tenders is based on two principles, the preservation of equality and fairness between the bidders and the interest of efficiency and saving public funds. Between these two principles, the principle of equality is more important, based on the approach that careful adherence to this principle will, over time, also lead to the fulfillment of the second principle and to meeting the economic interest underlying the concept of public tenders. In order to maintain the principles of equality, care must be taken to ensure that the threshold conditions are met and that proposals that do not meet these conditions are rejected. When the threshold conditions are not clear or when a dispute arises regarding their interpretation, a purposeful interpretation should be adhered to and the interpretation that is anchored in the language of the tender terms as published should be chosen as far as possible. In the event that the terms of the tender are also subject to a number of interpretations, interpretations must be chosen that best fulfill the purpose of the tender and among these, one must choose the interpretation that tends to upholds the bids submitted by the tender participants over one that disqualifies them. Here, the terms of the tender stipulated that the bidder must have proven experience and operate the Covid19 testing laboratory itself or, in case it does not have the necessary experience, hire the services of a subcontractor who has experience to operate the laboratory for it. However, the winning bid was submitted by a company that has no proven experience and only included a professional advice and guidance from an experienced subcontractor, who does not actually operate the lab. This is a laxing of the terms of the tender, which has led to discrimination between the bidders, and to the winning of a bid that does not meet the threshold conditions. Therefore, the winning of the tender must be canceled and the issue returned to the Tenders Committee for further review.