4.5.4 Handling of Recourses to the Tenders Review Authority

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Procedure for filing and examination of hierarchical recourses

Pursuant to the provisions of article 94 of the Coordination of Procedures for the Award of Public Works Contracts, Public Supply Contracts and Public Service Contracts and for Related Matters Law of 2006 (Law 12(I)/2006) and, respectively, to the provisions of article 78 of the corresponding Water, Energy, Transport and Postal Services Sector Law of 2006 (Law 11(Ι)/2006), the appeal procedures provided for in Title IV “Tenders Review Authority” of the Award of Public Contracts (Supplies, Works and Services) Law of 2003 (Law 101(I)/2003) remain in force until a new Law providing for the coordination of appeal procedures is applied.

Pursuant to Law 11(Ι)/2006, the competence of the Tenders Review Authority to examine appeals applies only to contracts of an estimated value above the thresholds of article 15 of Law 11(Ι)/2006.

The procedure in force regarding the filing and examination of hierarchical recourses, as provided for in Title IV “Tenders Review Authority” of the Award of Public Contracts (Supplies, Works and Services) Law of 2003 (Law 101(I)/2003), is presented in Annex 4-3 (by means of a diagram) and is summarised in the following tables.

 

FILING AND EXAMINATION OF HIERARCHICAL RECOURSES

 

TABLE 1. FILING OF A HIERARCHICAL RECOURSE

1

RIGHT TO FILE

A HIERARCHICAL RECOURSE TO THE TENDERS REVIEW

AUTHORITY

Every interested party who has or had an interest in being awarded a specific contract and who has sustained or is likely to sustain a loss as a result of an act or decision of the Contracting Authority which violates any provision of the applicable law and precedes the conclusion of the contract.

2

PRELIMINARY OBLIGATIONS OF THE INTERESTED PARTY

Prior to filing a hierarchical recourse to the Tenders Review Authority, the interested party must, within a deadline of five (5) days from the date on which it became aware, by any means whatsoever, of the act or decision of the Contracting Authority, notify in writing the Contracting Authority with simultaneous notification to the Competent Authority, of the alleged violation and of its intention to file a hierarchical recourse.

3

EXAMINATION OF THE OBJECTIONS OF THE INTERESTED PARTY BY THE CONTRACTING AUTHORITY

The Contracting Authority examines the objections of the interested party and issues a reasoned decision within five (5) days from the date it receives the written notification and, if it deems the said objections to be well-founded, takes appropriate measures. Should the deadline elapse, the objections of the interested party shall be presumed to have been rejected.

4

TIME LIMIT FOR THE FILING OF A HIERARCHICAL RECOURSE TO THE TENDERS REVIEW

AUTHORITY

The hierarchical recourse is filed within a deadline of ten (10) days from the date on which the interested party was notified of the reasoned decision of the Contracting Authority or from the expiry of the deadline of five (5) days of the previous paragraph.

5

SPECIAL FEE FOR THE FILING OF A HIERARCHICAL RECOURSE

For filing a hierarchical recourse to the Tenders Review Authority, the applicant pays a special fee, in accordance with the provisions, as applicable in each case, of the applicable relevant decision of the Minister of Finance, published in the Official Gazette of the Republic of Cyprus. The above fee is non-refundable and is deposited into the General Government Account. More information is available from the web site of the Tenders Review Authority (www.tra.gov.cy).

6

CONTENT OF HIERARCHICAL RECOURSE

The interested party states specifically the grounds of the law and the facts on which the recourse is based, and accompanies them by full evidence, including the following information:

Full particulars of the natural or legal person filing the recourse.
Name of the Contracting Authority.
Particulars of the contract or invitation to tender.
Initial information letter by the Contracting Authority regarding the award of the contract, if this has been sent to the interested party.
Proof of payment of the special fee of the previous paragraph.

If the evidence accompanying the recourse is incomplete or inadequate, the Tenders Review Authority may at its absolute discretion request the applicant to submit, within a deadline of three (3) days, any further information which it deems necessary.

 

Although covered by the Law, the Contracting Authority should not prefer the “do nothing” option, leaving the deadline of five (5) days to elapse, instead of issuing the reasoned decision described in item (3) of Table 1. A reasoned decision that answers each one of the objections of the interested party, presenting all the technical details or legal arguments documenting the answer, may discourage the interested party from filing a hierarchical recourse with the Tenders Review Authority. It may also help the Contracting Authority draw up immediately the written report of item (1) of Table 2, should a hierarchical recourse be eventually filed.

 

TABLE 2. PROCEDURE FOR THE EXAMINATION OF A HIERARCHICAL RECOURSE

1

NOTIFICATION OF THE CONTRACTING AUTHORITY

The Tenders Review Authority shall, within two (2) days from the filing of the hierarchical recourse, notify the Contracting Authority of such recourse and request that a written report, including any other information which it considers necessary be submitted within a 10 day period.

2

SETTING OF THE DATE FOR THE EXAMINATION OF THE RECOURSE

Upon receipt of the written report of the Contracting Authority, the Tenders Review Authority shall fix a prompt date for the examination of the recourse and shall notify in writing the interested party or his representative and the Contracting Authority or its representative, to appear before it and present their views regarding any matter raised in the hierarchical recourse examined by it.

3

TIME OF COMPLETION OF THE PROCEDURE FOR THE EXAMINATION OF THE RECOURSE

The procedure for the examination of the hierarchical recourse is completed as quickly as possible, and the decision of the Tenders Review Authority is issued within thirty (30) days at the latest from the date on which the hierarchical recourse was filed.

 

It is understood that the written report mentioned in item (1) of Table 2 must be drawn up the Contracting Authority with due care and diligence and with the support of the competent body, as appropriate in each case (e.g. the Procurement Team responsible for preparing the tender documents, in the case of a recourse against the tender documents, or the Competent Body for the Evaluation of Tenders, in the case of a recourse against the results of the evaluation). It is also understood that the written report may be based on the reasoned decision of item (3) of Table 1, provided that the reasoned decision was drawn up with the same diligence. In the particular case of a recourse against a decision of the evaluation stage, in drawing up the written report the Contracting Authority should seek assistance by looking up the information contained in the Qualitative Selection and Technical Evaluation Report and in the Final Evaluation Report, drawn up by the Competent Body for the Evaluation of Tenders in the performance of its work.

 

TABLE 3. DECISIONS OF THE TENDERS REVIEW AUTHORITY

1

The Tenders Review Authority may examine summarily and reject any hierarchical recourse which it deems to be groundless, without inviting the interested party or the Contracting Authority to appear before it.

2

The Tenders Review Authority rejects the recourse, if the submitted evidence is incomplete or inadequate and the applicant fails or refuses to provide any further information requested of him.

3

After the examination of the hierarchical recourse, the Tenders Review Authority, on the basis of the evidence submitted to it, may:

1. Confirm the act or decision of the Contracting Authority.
2. Annul the act or decision of the Contracting Authority, if this violates any provision of the applicable law and precedes the conclusion of the contract.
3.Annul or amend by reason of contravention of any provision of the applicable law, any condition contained in the invitation to tender or in the tender documents or in any other document which is related to the tender procedure and concerns technical, economic and financial specifications.

 

Impediments to the conclusion of the contract

Pursuant to the provisions of the Law, the following are definite impediments to the conclusion of the contract:

1.The deadline of five (5) days for the notification of the Contracting Authority by the interested party which intends to file a hierarchical recourse (item 2 of Table 1).
2.The deadline of five (5) days from notification, within which the Contracting Authority must issue a relevant reasoned decision (item 3 of Table 1).
3.The deadline of ten (10) days (for the filing of the hierarchical recourse) from notification of the reasoned decision to the interested party or from the idle lapse of the deadline of five (5) days of the previous paragraph (item 4 of the Table 1).
4.The deadline of two (2) days from the date on which the hierarchical recourse was filed to the Tenders Review Authority, within which the hierarchical recourse must be notified to the Contracting Authority (item 1 of Table 2).

After the deadline of the paragraph (4) above elapses, the impediments to the signature of the contract cease to exist unless, concurrently with the filing of the hierarchical recourse, the interested party submits a unilateral application for interim measures.

ADOPTION OF INTERIM MEASURES

The procedure in force, as provided for in Title IV “Tenders Review Authority” of the Award of Public Contracts (Supplies, Works and Services) Law of 2003 (Law 101(I)/2003), regarding the adoption of interim measures for suspension the contract award and signature procedure after a hierarchical recourse has been filed, is summarised in the following table.

 

TABLE 4. ADOPTION OF INTERIM MEASURES

1

CONDITIONS

FOR THE ADOPTION OF INTERIM MEASURES

The Tenders Review Authority may, after a hierarchical recourse has been filed and following a unilateral request by the party concerned, if it is thought highly likely that the applicable law has been violated and the adoption of interim measures is considered necessary in order to prevent further loss to the interests of the applicant, suspend the procedure for awarding the contract or the execution of any other act or decision of the Contracting Authority in connection with the award procedure, as well as the signature of the contract.

2

DURATION OF SUSPENSION IN THE CASE OF ADOPTION OF INTERIM MEASURES

1.The Tenders Review Authority may suspend the relevant procedures initially for a period of two (2) days, within which the Contracting Authority is invited to appear before the Tenders Review Authority and present its views regarding the damages likely to be caused by the further suspension of the relevant procedures.
2.The Tenders Review Authority may decide to suspend all relevant procedures for a period of time up to its final decision on the hierarchical recourse.

3

REASONS FOR REJECTING THE APPLICATION FOR INTERIM MEASURES

No interim measure is adopted if, after having assessed the loss of the applicant, the interests of third parties and the public interest, the Tenders Review Authority considers that the adverse effects of granting the application will be more serious than the benefit to the applicant.

It is understood that the rejection of the application should not impair any other rights of the applicant.

 

If the Contracting Authority is invited to present its views, in accordance with item (2.1) of Table 4, it must prove to the Tenders Review Authority that the adverse consequences in the event of a decision to adopt the interim measures, i.e. the loss, resulting from the delay, to the interests of the Contracting Authority or of those benefited by the implementation of the contract (who, in the case of public contracts, are as a rule a small or larger part of the countrys population), will be more serious than the potential benefit to the interested party. The evidence to document this claim may, for example, consist of the references made in the tender documents to the purpose and benefits of the contract, or the texts on the strategic choices of the Contracting Authority and its business plans, of which the specific contract forms part.

Consequences for, and rights of, the applicants and the Contracting Authority

In the case of rejection of a hierarchical recourse in accordance with items (1) and (2) of Table 3, or in the case of ratification of the act or decision of the Contracting Authority in accordance with item (3.1) of the same Table:

The Tenders Review Authority may impose on the applicant the payment of all expenses of the procedure and, additionally, a fine, as it may deem appropriate under the circumstances.
If the interested party considers the decision of the Tenders Review Authority to be unfair for him, it may appeal to the Supreme Court, in accordance with Article 146 of the Constitution.

In the case of annulment of the act or decision of the Contracting Authority in accordance with items (3.2) and (3.3) of Table 3:

taking place after the conclusion of the relevant contract, the interested party may, if it has sustained loss as a result of the specific act or decision, seek compensation from the Contracting Authority by means of an action filed before the District Court.
Irrespective of the time  it takes place, if the Contracting Authority considers, on the basis of appropriate documentation, that the relevant decision of the Tenders Review Authority is unfair, it may appeal to the Supreme Court, in accordance to Article 146 of the Constitution.

If the Tenders Review Authority annuls an act or decision of the Contracting Authority after the conclusion of the relevant contract, the latter is not affected, unless the award procedure had been suspended and interim measures had been adopted prior to its conclusion. Therefore, if no application for interim measures is filed concurrently with the hierarchical recourse, or if the application to be filed is rejected, the Contracting Authority may proceed to sign the contract without bearing the risk of its cancellation, even if the Tenders Review Authority rules in favour of the interested party. However, within the framework of the transaction ethics which must govern the functioning of administrative authorities and as a gesture of goodwill, the Contracting Authority should consider delaying the signature of the contract, if this does not create serious problems for it, until the final decision of the Tenders Review Authority is issued.

Pursuant to the provisions of the Law, the deadline of five (5) days under item (2) in Table 1, within which the interested party must disclose its intention to file a hierarchical recourse, starts from the time when the party becomes aware, in any manner whatsoever, of the act or decision of the Contracting Authority which violates any provision of the applicable law, as a result of which the interested party has sustained or is likely to sustain loss.

In order to limit the period of time during which hierarchical recourses are likely to be filed (also in accordance with the foregoing) but also for reasons of transparency and equity, it is advisable and recommended to the Contracting Authority to consider, in all cases, the possibility to mention, in the initial informational letter to the economic operators participating in the procedure, the reasons for the exclusion or rejection of a tender.

The case of decisions favourable for the applicant prior to the signature of the contract

If the Tenders Review Authority decides, prior to the signature of the contract, to annul or amend an act or decision of the Contracting Authority, recognising that such act or decision violates any provision of the applicable law, the Contracting Authority must comply with this decision and take all appropriate actions in order to remedy the violation.

The method of remedy is not always obvious and, in certain cases, the remedy may prove unfeasible. In all cases, the Contracting Authority must exhaust all the available possibilities for completing the procedure and concluding the contract, taking into account that after the issue of the new decision replacing the one cancelled the period of time during which an interested party has the right to file a hierarchical recourse is renewed.

The Table below contains the most common examples of cases involving decisions of the Tenders Review Authority which are favourable for the applicant, together with guidelines on how to handle these in each case:

 

DEALING WITH CANCELLATION DECISIONS OF THE TENDERS REVIEW AUTHORITY

CONTENT OF RECOURSE

PROPOSED RESPONSE

The recourse was filed against the tender documents, claiming that they contained terms or specifications which violate the provisions of applicable law.

 

The Tenders Review Authority decided to cancel the invitation to tender and amend all or some of the points indicated in the recourse.

The Contracting Authority must:

1.Cancel the previous tender procedure.
2.Call a meeting of the Procurement Team responsible for the preparation of the tender documents, which it shall inform of the decision taken by the Tenders Review Authority, for adapting the contents in accordance with the suggestions made.
3.Verify the correctness of the tender documents after their adaptation.
4.Take all necessary actions to repeat the invitation to the tender, in the same manner as that of the initial invitation, i.e. using the same advertising means and the same deadlines as the initial ones.

The recourse was filed against the act whereby an economic operator was excluded during the qualitative selection phase.

 

The Tenders Review Authority decided to cancel the exclusion act and reinstate the applicant.

The Contracting Authority must:

1.Call a meeting of the Competent Body for the Evaluation of Tenders, which it shall inform of the decision taken by the Tenders Review Authority.
2.The Competent Body shall repeat the evaluation procedure for the specific economic operator and, in particular:
oIt shall complete the qualitative evaluation of the economic operator.
oIt shall proceed to evaluate its technical offer in relation to the contents of the tender documents.
oProvided that the technical offer shall not be deemed eliminable during the general technical evaluation, it shall mark it on the basis of the Table of Evaluation Criteria contained in the tender documents, in the case of a contract for which the award criterion is the most economically advantageous tender.
oIt shall proceed to evaluate its financial offer and, provided this shall not be deemed eliminable during the general evaluation, shall mark it comparatively, in the case of a contract for which the award criterion is the most economically advantageous tender. It is understood that in this case, if the specific tender proves to be the one with the lowest price, it shall proceed to comparatively mark again all offers which have already been evaluated.
oIt shall redraft the table of final ranking of the tenders and shall deliver it for approval to the competent body of the Contracting Authority, together with a Special Evaluation Report where the procedure followed shall be described and the relevant decisions shall be mentioned and documented.
3.After the examination and approval of the Special Evaluation Report, the competent body of the Contracting Authority, shall issue a new award decision and shall inform the interested economic operators accordingly.

The recourse was filed against an act whereby a tender was rejected during the technical evaluation procedure.

 

 

The Tenders Review Authority decided to cancel the rejection act and reinstate the applicant.

 

The Contracting Authority must:

1.Call a meeting of the Competent Body for the Evaluation of Tenders, which it shall inform of the decision taken by the Tenders Review Authority.
2.The Competent Body shall repeat the evaluation procedure for the specific economic operator and, in particular:
oIt shall complete the evaluation of the technical offer of the economic operator in relation to the contents of the tender documents.
oProvided that the technical offer shall not be deemed eliminable for any other reasons during the general technical evaluation, it shall mark it on the basis of the Table of Evaluation Criteria contained in the tender documents, in the case of a contract for which the award criterion is the most economically advantageous tender.
oIt shall proceed to evaluate its financial offer and comparatively mark it, in the case of a contract for which the award criterion is the most economically advantageous tender. It is understood that in this case, if the specific tender proves to be the one with the lowest price, it shall proceed to comparatively mark again all offers which have already been evaluated.
oIt shall redraft the table of final ranking of the tenders and shall deliver it for approval to the competent body of the Contracting Authority, together with a Special Evaluation Report where the procedure followed shall be described and the relevant decisions shall be mentioned and documented.
3.After the examination and approval of the Special Evaluation Report, the competent body of the Contracting Authority, shall issue a new award decision and shall inform the interested economic operators accordingly.

 

Dealing with the issues arising because of cancellation decisions of the Tenders Review Authority is usually difficult and time-consuming. Regarding the second and third cases of the above table, where the award criterion is the most economically advantageous tender, the difficulty lies primarily in the fact that the Competent Body for the Evaluation of Tenders should act in line with the principle of equal treatment, although during the marking of the economic operator in favour of which the decision of the Tenders Review Authority was issued the financial offers and comparative ranking of its competitors shall be known. The position of the Competent Body for the Evaluation of Tenders becomes even more difficult if the object of the recourse which led to the cancellation decision was the marking of the economic operator in favour of which the decision of the Tenders Review Authority was issued, as in this case the Competent Body for the Evaluation of Tenders will know in advance if and how the new marking affects the final ranking.

If the established bodies participating in the tender procedure and in the contract award procedure observe all terms of the tender documents, the Laws applicable in the Republic of Cyprus and the Regulations applicable in each case, and act within the framework of the principles of the Treaty, the likelihood of hierarchical recourses being filed is reduced and the risk of cancellation decisions being issued, should hierarchical recourses be eventually filed, is minimised.


© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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