I. Brief Overview of the Dispute
TB Legal provided legal assistance to a tenderer in challenging the tender conditions of an electronic tender announced within the framework of public procurement.
The dispute concerned the public procurement of specialized laboratory products. The assessment of the conditions established by the tender documentation revealed several significant legal issues affecting tenderers’ ability to prepare their bids and participate competitively in the tender.
The Dispute Resolution Council related to public procurement fully upheld the complaint and instructed the tender commission of the procuring entity to annul the decision approving the tender conditions and reformulate the requirements in accordance with the legal standards established by the Council (see the decision).
II. Key Issues Related to the Dispute
1. Contradictory and Ambiguous Delivery Deadlines
Different deadlines for the delivery of products were specified in different parts of the tender documentation. In certain cases, two business days were indicated, while in others — two weeks or 2–3 weeks, and for certain items the wording “I need it urgently” was used.
Our position was based on the principle that a tenderer must be able to clearly determine the scope of its obligations and the applicable performance deadlines from the tender documentation.
The Dispute Resolution Council shared this approach and explained that the requirements used in tender conditions must be clear and specific and must not create the possibility of differing interpretations. The Council found that, in this case, the provisions concerning delivery deadlines were ambiguous and open to multiple interpretations.
2. Proportionality of an Exceptionally Short Delivery Deadline
According to the tender conditions, certain specialized products had to be delivered within two business days from the conclusion of the contract.
The complaint focused on the specific nature of the procurement object, the particularities of international delivery of the products, and the commercial risk arising for the tenderer from such a requirement.
The Council explained that tender requirements must be adequate to the needs of the procuring entity, necessary, suitable, and proportionate. Accordingly, the procuring entity must substantiate why the imposition of a specific restriction in precisely such a form is necessary and whether a more proportionate means of achieving the same objective exists.
3. Automatic Termination of the Contract Due to Breach of the Delivery Deadline
Another issue in the dispute concerned a tender condition under which a breach of the delivery deadline automatically resulted in termination of the contract.
Our position was that linking any breach of the deadline in advance and automatically to such a legal consequence required an additional assessment of proportionality, including consideration of the seriousness of the breach and the specific circumstances.
The Council indicated that the procuring entity’s reasoning must demonstrate why such a strict mechanism of contract termination is necessary and has no alternative for achieving the specific objective.
4. Three-Day Deadline for Submission of a Sample
The tender documentation entitled the procuring entity to request a product sample, for the submission of which the tenderer was given only three business days.
Our position was based on the specific nature of the procurement object: certain products required special ordering and international transportation, while the submission of their “sample” could, in practice, amount to the delivery of the full product.
The Council focused on the requirement of a reasonable deadline established by law and noted that it was unclear which particular product sample the procuring entity would request. Under such conditions, the tenderer could not plan its actions in advance. The Council considered the requirement related to the submission of a sample to be inconsistent with the applicable legislation.
5. Requirement to Have the Products in Stock in Advance
The tender conditions also required the tenderer to confirm in writing that it already had the specific products in stock and was able to deliver them within two business days.
The proportionality of this requirement was challenged in the complaint, since the advance purchase of specialized and high-value products created a significant financial risk for the tenderer, particularly under conditions where the procuring entity retained the right not to purchase part of the products at all.
The Council considered that the procuring entity was required to provide additional justification as to why the requirement to have the products in stock in advance constituted a necessary means of achieving the intended objective.
III. Result
The Dispute Resolution Council fully upheld our client’s complaint.
The tender commission of the procuring entity was instructed to annul the decision approving the tender conditions and to reformulate the public procurement conditions in accordance with the legal assessments contained in the Council’s decision and the requirements of public procurement legislation.
This case demonstrates that, when challenging tender conditions, it is important to assess each requirement from the perspective of certainty, proportionality, necessity, and its impact on competition.
IV. TB Legal’s Experience in Public Procurement
Within its legal services package in the field of public procurement, TB Legal assists tenderers with legal matters related to public procurement, including: legal assessment and challenge of tender conditions; challenging the disqualification of a tenderer; assessment of a competing tenderer’s compliance; preparation of tender complaints; and representation before the Dispute Resolution Council related to public procurement.
If you wish to effectively protect your company’s interests in public procurement, contact us — TB Legal is ready to provide you with professional legal support in the field of public procurement.
