Legal updates

A tender that requires experience in a specific system as a threshold condition does not necessarily indicates an illegal ‘tailor-made’ tender

November 28, 2021
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The Tel Aviv Municipality published a tender for the supply, installation, maintenance, updates and changes in traffic and light control systems of a specific type that the municipality has been using for several years. As there are only two companies that can win the tender and meet the threshold conditions in the tender, it was contended that this is a 'tailor-made tender'.

The Court dismissed the petition and held that these are not unreasonable threshold conditions, but the municipality must make adjustments to future tenders that will allow the participation of additional bidders. A "tailor-made" tender is a tender whose terms are tailored to the dimensions of a particular bidder and can violate the principle of equality between the bidders. In balancing the laws of tenders and competition with the legitimate authority's interest in optimal threshold conditions for the authority's needs, it is worth considering also the possibility of less stringent threshold conditions that will allow the market to open up to competition. Here, about it is a control system that has been developed and adapted to the needs of the municipality, works well and has proven itself professionally. Therefore, there is no room to force the municipality to replace the system just in order to open the market to competition especially when the potential bidder did not act adequately to gain the required training as he only approached the system's exclusive distributor in the last minute. However, because gaining experience in the control system, which is a threshold condition for participating in the tender, depends on the results of negotiations with the sole distributor of the control system who is also one of the winners in the tender, the municipality is to stay alert and examine other options that will allow to expand the circle of tender participants in future engagements.