Legal Updates

After the bids were opened one cannot waive the first stage in a two-stages tender

June 3, 2022

The Israeli National Fire and Rescue Authority has issued a tender for the supply and installation of warning systems, which included a two-stages procedure for selecting the winning bid. The Tenders Committee opened the financial bid and announced the winner of the tender before the threshold conditions phase was completed.

The Court held that the winning bid is to be disqualified and tender canceled due to a violation of the principle of equality. Changing the threshold conditions after opening the bids violates the principle of equality both towards the participants in the tender and towards potential participants. In this case, the tender established a two-stages procedure of checking threshold conditions (checking the bidder's statements and checking the product samples and the degree of suitability of the product to the professional requirements and technical characteristics defined in the tender), which only after completion this part in full the Tenders Committee will move on to the second stage in the tender of opening the financial bid. Two bidders participated in the tender, one bidder was disqualified during the first threshold conditions check while the other bidder provided a sample of a product that did not meet the professional and technical requirements defined in the tender. Despite this, the Tenders Committee decided to move the bidder to the next stage and opened its financial bid. After being impressed by the financial bid, the Tenders Committee allowed the remaining bidder to provide another sample, while deviating from the tender provisions. From the moment the bid was revealed, the Tenders Committee was in a state of conflict of interest, as it had a clear interest in approving the only bid remaining. Such conduct is violates the principle of equality both for bidders who participated in the tender and also for potential bidders, who might have submitted their bids had they known that a statement could be sufficient to meet the threshold and would be required to provide suitable samples only subject to winning the tender. Under these circumstances, the winning bid should be disqualified and in the absence of other bid the tender is canceled.