A bidder that won an Israel Land Authority tender for a lease of a plot withdrew its bid, contending that essential information regarding the scope of building rights had been concealed. The tender committee forfeited ILS 400,000 of the bid guarantee (approximately 25% of the total guarantee).
The Court rejected the petition and held that the committee's decision to partially forfeit the guarantee was reasonable and proportionate. A tender committee has the authority to forfeit a bank guarantee when a bidder, after being selected as the winner, fails to realize their win according to the tender's provisions. The purpose is to ensure the seriousness of the bid, the fulfilment of the winner's obligations, and the deterrence of bidders from breaching tender conditions. In this case, the lease of the land under the tender was conducted on an "AS IS" basis, including provisions regarding the planning status at the time of the tender and references to the applicable plan documents. Furthermore, the tender included binding contractual provisions establishing the bidder's responsibility to examine the planning, legal, and physical information, and the authority's lack of liability for information provided within the tender framework. Consequently, in the absence of concealment or misleading conduct, the winner was not entitled to withdraw its bid, and the tender committee's decision to forfeit 25% of the guarantee amount is reasonable and balanced.