I. About This Article
Bidder disqualification in public procurement is one of the most important and business-sensitive issues in Georgian tender practice. Participation in a public tender does not only mean offering the lowest price. A bidder must also comply with tender requirements, submit technical documentation, documents confirming compliance, certificates, justification of price adequacy and other materials on the basis of which the procuring entity evaluates the tender proposal.
At the same time, a disqualification decision does not always mean that the bidder actually violated tender requirements. The practice of the Dispute Resolution Council related to public procurement shows cases where bidder disqualification is based on incomplete assessment of documentation, insufficient examination of factual circumstances, incorrect interpretation of tender requirements or incorrect application of the legal basis.
Therefore, after receiving a disqualification decision, it is important to assess not only whether there is a formal inconsistency, but also how the tender commission evaluated all documents submitted by the bidder, whether it fully examined the factual circumstances and whether the decision is properly reasoned.
This article discusses five practical issues that are especially important when challenging bidder disqualification: assessment of documents already uploaded in the system, justification of price adequacy, the standard of bad faith conduct, assessment of the legal form of a foreign association and review of the legality of the winning bidder’s documentation.
For more information about the general strategy of challenging a tender, see our blog: Tender Complaint in Georgia – Anatomy of a Successful Public Procurement Dispute.
II. Why Is Legal Assessment of a Disqualification Decision Important?
Bidder disqualification in a public tender is not merely a procedural consequence. It may mean loss of a significant contract, loss of financial opportunity, weakening of market position and, in some cases, reputational damage for the company.
Legal assessment of a disqualification decision is especially important where the bidder believes that its documentation was fully submitted, the tender requirement was incorrectly interpreted, the procuring entity failed to examine all uploaded documents or a different approach was applied toward another bidder.
In tender disputes, formal details often have decisive importance. Incorrect assessment of one certificate, accreditation document, technical description, sample, registration certificate or price adequacy report may completely change the outcome of the tender.
Therefore, after disqualification, the bidder should quickly assess whether the ground for disqualification corresponds to the tender documentation; whether the commission examined the full documentation uploaded in the system; whether there is sufficient factual and legal basis for disqualification; whether the principles of equality and non-discriminatory evaluation of bidders were respected; and whether a complaint may be submitted to the Dispute Resolution Council within the statutory deadline.
III. The Importance of Full Assessment of Documentation Already Uploaded in the System
One important issue in the practice of the Dispute Resolution Council is the obligation to fully assess documentation already uploaded in the electronic procurement system.
In this regard, the Dispute Resolution Council’s decision in case DET260005089_02(NAT) is particularly noteworthy.
In that case, bidder disqualification was based, among other grounds, on the allegation that the bidder had not submitted a document confirming the accreditation of the body that issued the ISO 9001:2015 certificate. During review of the dispute, however, it was established that the relevant accreditation document had already been uploaded by the bidder at the initial stage of submitting the tender proposal, while the ISO certificate itself had been uploaded at the clarification stage.
The Council indicated that both the ISO 9001:2015 certificate and the document confirming accreditation of the issuing body existed in the system. The representative of the procuring entity also confirmed that the document had been missed for technical reasons. As a result, the Council did not accept this ground of disqualification and fully upheld the complaint.
This decision is especially important from a practical perspective. Assessment of a bidder’s compliance should be based on a combined analysis of the documentation submitted in the system. The fact that a specific document is not uploaded in the latest clarified file does not automatically mean that the requested information does not exist in the system at all.
For the bidder, this means that before challenging disqualification, it is necessary to review not only documents uploaded at the last stage, but the full chronology of the tender proposal.
The same decision was also important in relation to assessment of technical compliance documents. The tender commission indicated that the names in the testing reports submitted by the bidder did not match the models indicated in the price table. The Council, however, focused on the fact that the tender conditions did not require direct indication of the model from the price table in the document confirming compliance with the relevant standard.
This approach shows that, when assessing technical documentation, the decisive issue is not only formal comparison of terms, but the precise content of the tender requirement and what the procuring entity actually requested.
IV. Price Adequacy Justification and Authority of the Issuing Person
In construction and other types of tenders, where a low price is offered, the obligation to justify price adequacy often arises. In such cases, the bidder must confirm that the offered price is realistic and that the works or services can be performed at the indicated price.
The Dispute Resolution Council’s decision in case DIS260011656_01(NAT) is particularly important on this issue.
In that case, the winning bidder submitted a report prepared by an audit company to justify price adequacy. The tender conditions, however, required a relevant opinion issued by the LEPL Levan Samkharauli National Forensics Bureau or another accredited person, as well as a document confirming the accreditation of the person issuing the opinion.
The Council explained that audit activity is fundamentally different from construction-technical expertise and price formation inspection. Accordingly, an audit report could not replace the type of expert opinion or inspection report required by the tender documentation and the relevant technical regulation.
The Council also noted that the bidder had not submitted a document confirming the accreditation of the person issuing the opinion. In addition, documents confirming price adequacy are not subject to subsequent clarification.
Based on this approach, submitting a document formally called an “opinion” or “report” is not sufficient for justification of price adequacy. It is necessary for the type of document required by the tender conditions, the authority of the issuing person, accreditation and the content of the opinion to be jointly compliant.
For bidders, this means that a price adequacy document should be checked not only in terms of its content, but also in terms of the competence and formal status of the issuing person.
V. Bad Faith Conduct
Disqualification of a bidder on the ground of bad faith conduct is not merely connected with a technical defect. It relates the bidder’s behaviour to intentional or bad faith conduct, the purpose of which may be to obtain the right to conclude the contract.
The Dispute Resolution Council’s decision in case DET260008760_01(NAT) is noteworthy in this regard.
In that case, the bidder was required to submit a sample of the procurement object and an expert opinion. The bidder initially indicated that the sample was being sent from the manufacturer through DHL. Later, it was established that this specific shipment had not yet arrived in Georgia during the period when the expert examination was conducted. On this basis, the tender commission considered that the bidder had violated the affidavit conditions and committed bad faith conduct.
The Dispute Resolution Council did not share this approach. The Council focused on the fact that the tender documentation required submission of a sample and issuance of an expert opinion on the goods offered by the bidder — same country of origin, same manufacturer and same brand/model. However, this condition did not mean that the expert opinion necessarily had to be issued on the exact physical item that became the basis for extending the sample submission deadline.
The Council also noted that the procuring entity could not prove that the sample submitted for examination was not a school board produced by the same manufacturer. Accordingly, the mere fact that the specific shipment sent by DHL had not yet arrived in Georgia did not prove that the bidder had committed bad faith conduct.
This decision shows that bad faith conduct cannot be based only on suspicion, logistical inconsistency or the existence of additional questions. There must be a specific factual and evidentiary basis confirming that the bidder’s conduct was genuinely in bad faith.
VI. Legal Form of the Bidder
Foreign companies, consortia, joint ventures and other organisational forms often participate in public tenders. In such cases, correct assessment of the bidder’s legal status is especially important.
In this regard, the Dispute Resolution Council’s decision in case DET260000544_01(SPA) is important.
In that case, the tender commission considered the bidder disqualified on the basis that it was registered in the system as a “consortium”. According to the commission, the Civil Code of Georgia did not recognise consortium as an independent organisational-legal form, and if the bidder’s real intention was to participate as a partnership, it had not fulfilled the requirements established for a partnership.
The Dispute Resolution Council focused on the fact that the tender commission had not indicated a document-based ground according to which “Aet and Taikai Partnership” should have been considered a partnership under Georgian law. The Council noted that the commission’s statement — that the bidder’s intention to participate as a partnership could not be excluded — was only an assumption, and such an assumption could not serve as a basis for disqualification.
The Council also indicated that public procurement legislation allows foreign individuals or legal entities, as well as other organisational formations provided for by the legislation of the relevant country, to participate in public procurement. In addition, the unified electronic public procurement system itself allows registration of non-resident associations in the form of a consortium.
This decision is especially important for international companies participating in large tenders in Georgia in the form of a joint venture, consortium or another association. Assessment of the bidder’s legal form should be based on documents, registration data, agreement and compliance with foreign law. Bidder disqualification cannot be based only on the name indicated in the system or on the tender commission’s assumption.
For more information about this topic, see our blog: Tender Joint Venture in Georgia – How to Participate in Public Procurement by Combining Resources.
VII. The Winning Bidder’s Proposal May Also Become the Subject of a Dispute
A tender dispute does not always concern challenging one’s own disqualification. In some cases, the bidder’s legal interest may relate to checking the legality of the winning bidder’s proposal.
In this regard, the Dispute Resolution Council’s decision in case DIS260013196_01(NAT) is noteworthy.
The dispute concerned the documentation submitted by the winning bidder, LLC “Green City”, regarding its material and technical base. The tender conditions required the bidder to have the relevant machinery at the service location, either by ownership or right of use, as needed, and to submit documents confirming ownership or right of use of the material and technical base in the unified electronic system, including machinery registration certificates.
The complainant argued that, in relation to certain vehicles, the winning bidder had not uploaded registration certificates. The authority of the persons with whom agreements on the use of machinery had been concluded was also questioned.
The Dispute Resolution Council focused on the content of the tender requirement and noted that the obligation to submit machinery registration certificates applied both in cases of ownership and in cases of use. Accordingly, because the relevant registration certificates were not submitted in relation to two vehicles, the bidder’s clarified technical documentation did not satisfy the tender requirement.
The Council fully upheld the complaint and instructed the procuring entity to annul the decision identifying the bidder as the winner and to re-evaluate the bidder’s documentation.
This decision shows that a competing bidder may challenge not only its own disqualification, but also the legality of the winning bidder’s documentation. In such cases, it is especially important to compare the winning bidder’s documentation with the tender conditions point by point.
VIII. What Should a Bidder Check After Receiving a Disqualification Decision?
After receiving a disqualification decision, the bidder must act quickly. Deadlines in public procurement disputes are short, and even a strong legal position may lose practical importance if the relevant decision is not challenged in time.
First, the full history of the tender proposal should be checked. It is important to review not only the files submitted with the latest clarification, but all documents initially uploaded in the system.
Next, it should be determined exactly which requirement the tender commission refers to and whether that requirement actually follows from the tender documentation.
It should also be assessed whether the factual circumstances were properly examined. If the commission’s decision is based only on assumption, incomplete information or unsupported suspicion, this may become an important argument in the complaint.
Particular attention should be paid to the legal basis of disqualification. The commission protocol should show why the procuring entity considered a specific inconsistency to be a ground for disqualification and which legal rule or tender condition it relied on.
Finally, the deadline must be assessed. A tender complaint must be submitted within the statutory deadline and before conclusion of the contract.
IX. Why Is Proper Structuring of the Complaint Important?
A tender complaint must be clear, reasoned and evidence-based.
A general statement that bidder disqualification is unfair is not sufficient. The complaint should show what requirement existed in the tender documentation, what document the bidder submitted, how the commission evaluated that document, where the error lies and what legal consequence should follow from correcting the error.
In tender disputes, chronology of facts has particular importance. Sometimes a document really exists in the system but is uploaded at a different stage or in another file. Sometimes a requirement is drafted in a way that allows more than one interpretation. Sometimes the commission incorrectly applies such a serious ground as bad faith conduct.
A properly structured complaint helps the Council see the real essence of the dispute and assess not only the formal result, but also the legality and reasoning of the process.
X. Legal Services in Public Procurement
Challenging bidder disqualification requires combined analysis of tender documentation, materials uploaded in the system, commission protocols, competing bidders’ documentation and public procurement regulations.
TB Legal assists businesses in public procurement disputes, including issues related to bidder disqualification, identification of a competitor as the winner, price adequacy, technical documentation, tender joint ventures and other related matters.
Our services include legal assessment of tender documentation; analysis of disqualification grounds; chronological review of documents uploaded in the system; legal assessment of a competing bidder’s proposal; preparation of complaint; representation before the Dispute Resolution Council; assessment of the need to involve technical specialists; strategic management of the public procurement process; and other related support.
For additional information, see our service page: Public Procurement Law Services in Georgia – Tenders, Complaints & Legal Support.
XI. Conclusion
Bidder disqualification in a tender does not always mean that the decision is legally sound. The practice of the Dispute Resolution Council shows that grounds for disqualification may be based on incomplete assessment of documentation existing in the system, incorrect analysis of a price adequacy document, unsupported assumption of bad faith conduct, incorrect interpretation of the legal form of a foreign association or insufficient review of the winning bidder’s documentation.
After disqualification, quick and precise legal response is important for businesses. Deadlines, tender requirements, uploaded documentation, commission reasoning and evidence must be checked.
The success of a tender dispute often depends not only on legal rules, but also on proper organisation of facts, full analysis of documents and clear structure of the complaint.
Contact TB Legal if your company has been disqualified from a public tender or if you believe that another bidder has been given an unjustified advantage. We will help you assess the issue legally, prepare a complaint and represent you before the Dispute Resolution Council.
Disclaimer
This article has been prepared for general informational purposes only and does not constitute individual legal advice or a legal opinion. Issues related to bidder disqualification, tender documentation, price adequacy, bad faith conduct, foreign associations or winning bidder documentation must be assessed in light of the specific tender conditions, documents uploaded in the system, commission protocols, evidence and factual circumstances of the case.
In a specific case, it is recommended to obtain individual legal advice.
