Revocation of a public tender

THE revocation of a public tender is a serious act of the administration, which must be taken exceptionally and provided the facts leading to such a decision are specifically stated so that to allow its judicial review. It is possible to revoke a legal administrative act even if reasonable time has passed since its issuance, provided it is justified for reasons of public interest and by the principles of good administration and good faith. Such a decision must be reasoned and take into account that in the meantime rights and favourable situations have been created for the interested persons. The annulment of the award of the tender by the Tender Review Authority is not an excuse for an administrative Authority to revoke the tender without an essential reason and any recommendation made by the Audit Office should not replace the decisive competence of the Authority. The revocation must be specifically justified, as it is a burdensome measure for the interested persons and the decision of the administration that there are reasons of public interest are reviewed by the Administrative Court.

The above principles are indicated in a judgment issued by the Supreme Court dated 14.6.2022 in a Revisional Appeal, whereby it upheld the decision of the Court of first instance in its administrative jurisdiction. The case concerned the revocation of a tender by an administrative Authority which was conducted by an open procedure and with the criterion of awarding the lowest price. Seven bids were submitted for the undertaking of the project, of which five were found to be out of the specifications of the tender. The evaluation committee of the administrative Authority, after the intervention of the Audit Office, proceeded to a re-evaluation, deciding that all the bidders met the required specifications. On the basis of the committee’s recommendation, the administrative Authority decided to award the tender to a specific company, subject to its answers to the clarifying questions being considered satisfactory by the evaluation committee.

The two affected bidders filed hierarchical recourses before the Tender Review Authority with a positive outcome, the tender award to the specific company was annulled, since on the one hand its bid violated an essential condition of the tender and on the other hand the evaluation committee, after the intervention of the Audit Office, did not evaluate which deviations from the conditions of the tender were significant and which were not. This was followed by a decision of the administrative Authority to revoke the tender and to publish it again with improved terms and by dividing it into more than one tender for the purpose of easier evaluation and comparison of the elements and bids.

The affected bidder filed a recourse against the decision of the administrative Authority to revoke the tender, with a successful outcome. The administrative Authority filed an appeal against the judgment of the Court of first instance, arguing that the revocation of the tender was fully reasoned and substantiated. Moreover, the administrative Authority argued that the complexity of the tender and its technical data, the volume of the tender, the number of its items, made the comparison and the evaluation not only too difficult, but also unreliable and for this reason the revocation was inevitable.

The Supreme Court did not accept the grounds of the appeal, finding that the reason for the revocation of the tender and the justification given by the administrative Authority were incomplete and not legal. The revocation could not be based on the facts of the case and the elements before the administrative Authority. Its argument that the revocation of the tender and the intention to publish new tenders would make their comparison and evaluation easier and more reliable was unfounded. The decision of the Tender Review Authority did not constitute an unpredictable event and the decision of the administrative Authority did not serve the public interest. The Court pointed out that it is a well-established case law, based on the principles of administrative law, that the exercise of such power (revocation) is subject to the restrictions set by the general principles of the administrative law and the case law and especially the principles of good faith.

The special and serious reasons for which a tender is annulled or revoked, as the Supreme Court stated, must serve the public interest, which is not a concept above the law, but is expressed and defined within the framework of the Constitution and the laws. The decision for the revocation must be justified with reference to the facts, in order to reveal the reasoning and allow its judicial review. The administrative Authority did not invoke the existence of public interest based on which it proceeded to revoke the tender. So, its decision was illegal and the Supreme Court dismissed its appeal. ?