Two bidders submitted proposals in a public tender for the establishment of a database. After the tender committee awarded the contract to one despite a concern regarding a conflict of interest, the other contended that the tender committee's decision is unreasonable and should be annulled.
The Court rejected the claim and held that the existence of a concern for a conflict of interest does not lead to the automatic disqualification of a bid in a tender. The principle of avoiding conflicts of interest, particularly in the public sector, is derived from the fiduciary duty of public servants and the obligation of authorities to act in accordance with the rules of justice and fairness, weighing only relevant considerations. However, the rule prohibiting conflicts of interest is not absolute; rather, it is a principle that should be realized to the highest possible degree without undermining the underlying purpose of the administrative action itself. Accordingly, even when there is a concern about a conflict of interest, it does not mean that a certain action is invalid from the outset. Instead, the implementation of more moderate measures should be considered first, utilizing disqualification only as a last resort. In this case, the winning bid included an advance disclosure regarding the potential conflict of interest and even outlined how such a conflict could be prevented. The tender committee examined the issue, including through legal and external expert opinions, and determined that there was no justification to disqualify the bid since the conflict of interest was not material, the likelihood of it actually materializing was low, and there were effective ways to manage it. Consequently, there is no justification to overturn the award decision, and the company that submitted the winning bid should be permitted to proceed with the execution of the tender.