Oleksandr Pysarenko.

Especially for the Yuridicheskaya Praktika neswpaper.

One way of making a profit, although usually small, is the sale of goods (works, services) to buyers for public funds. Large volumes, small delivery time and reliability make it attractive to buyers the participation of enterprises in public procurement.

According to the Law of Ukraine “On procurement of goods, works and services for state funds” from February 22, 2000 (Act), the tender is mandatory for procurement, wholly or partly carried on state funds, if the value of goods exceeds the amount of 2 thousand euros, and works – 100 thousand euros (some exceptions).

The main tender procedure is open bidding. Procurement contract is entered into with the successful bidder – a party that offered the best conditions for the purchase, the relevant interests of the optimum and rational utilization of public funds.

Unfortunately, sometimes with equal quality goods instead of the participant, who offered the lowest purchase price, the tender committee recognizes the winner of another. In such cases, there is violation of the interests of the bidder, because when an objective assessment of the actual conditions of the purchase would have been just been accepted as the best of its tender offer. In addition, the party caused material damage in the form of costs associated with participation in the auction. On these and other grounds to invalidate the law allows the results of public procurement procedures and to recover losses associated with participation in the auction.

On the example of the case, the decision on which was adopted by the Economic Court of Kiev, we consider some aspects of the invalidation of the results of tenders.

In April 2003, OOO “Ekos” (plaintiff), a former member more than 35 bids and the winner of more than 25 of them participated in the bidding for the purchase of residential gas water heating columns, conducted by the Head Office of Housing Kyiv City State Administration (the Respondent) . To prepare the plaintiff bid defendant gave him the tender documents as required by law. In the auction was attended by only two participants.

To participate in the bidding plaintiff as a bid security provided a bank guarantee of tender, for the discovery and supply of which to pay the bank fees.

May 31, 2003 plaintiff received notification of the Respondent’s acceptance of tender proposal LLC LZTA at a price of 398 USD for one column, while the price of the Complainant is 390 USD per unit.

Assuming that the illegality of such a decision, the plaintiff appealed against it. Represent the interests of plaintiffs’ appeal of the results of the tender carried out legal office Pisarenko. Appeals against the results of public procurement was conducted in two phases: pre-trial and trial (Part 10 of Article 37 of the Act).

Article 37 states that filed a complaint Party has the authority to go to court if the authority has not taken a decision on the complaint within 15 calendar days of its receipt. An informed decision on the appeal taken by the competent authority shall be final, unless within 15 calendar days from the date of the party has not challenged it in court.

At the pretrial stage, the complaint was filed by the Respondent’s decision. Article 37 of the Act defines the bodies authorized to investigate complaints. They are very customer tender – budget funds (public authorities, local authorities, institutions or organizations created by them), or specially authorized central executive body for the coordination of procurement – Ministry of Economy and European Integration (CMU 27 September 2000 № 1469).

Plaintiff’s complaint was not considered by the Respondent in fact. In response it was reported that, pursuant to Part 2 of Article 37 of the Act, the complaint shall be considered as filed after the deadline. Despite the fact that the complaint was filed on time, Plaintiff has failed to give any objection Respondent. And because the message Respondent not considering the complaint is not a reasoned decision, the plaintiff obtained the right to appeal the results of the tender before the court pursuant to Part 10 of Article 37 of the Act.

Thus, the plaintiff at the trial stage of a lawsuit was filed in the Commercial Court to the defendant to invalidate the results of public procurement procedures. Substantiating the claim, the plaintiff outlined as follows.

1. Pursuant to Part 7 of Article 26 of the Act, the customer determines the winner of the bidding of those bids, which were not rejected on the basis of the evaluation criteria specified in the tender documents. Tender offer by the Respondent rejected the Complainant was not. In the tender document specified the criteria on the basis of which the tender evaluation.

The first criterion – the lowest price. The maximum possible score – 50 (on a 100-point scale). Since the disclosure of Plaintiff’s bid proposal was the lowest price (390 USD 398 against another party), so that he gets 50 points.

In the tender document specified that the purpose of the tender is the selection of performers capable of at the lowest price in the shortest possible time to make delivery. The customer must accept the bid of the candidate who offered the lowest price of purchasing goods and carried out the supply in compliance with all requirements of the tender documents.

Thus, the lowest price tender offer undeflected Plaintiff should accept as the most rational, the plaintiffs acknowledge the successful bidder under Parts 7 and 8 of Article 26 of the Act.

The remaining evaluation criteria specified in the tender documents by the Respondent, could not be applied to accurately determine the best bid because of the possibility of changing conditions in each of them.

2. The draft treaty in the tender documents the Respondent does not specify any particular conditions and order of calculations, the most profitable for Respondent. That is not possible to compare it with the conditions proposed by the bidders. In addition, the tender document specified that in case the parties to achieve agreement contract form in relation to the draft version can be added or changed. Thus, the conditions and payment arrangements, referred to a party at the time of the tender at the time of the contract could be changed.

The above does not correspond to paragraph 2 of Article 29 of the Act, under which the customer enters into a contract of purchase, in accordance with the requirements of the tender documents, with party tender offer has been accepted. In addition, these provisions tender documents will not reliably determine the successful bidder by the criterion of “settlement terms.”

3. With regard to the criterion of “the most profitable delivery of goods”, the Respondent has violated the provisions of paragraph 1 of Article 21 of the Act, as in the tender documents stated that the timing of purchases of goods finally agreed in the treaty. Thus, at the time of the contract terms could also be changed.

4. Illegal was to evaluate the tender offer by the Applicant as the lowest criterion of “quality indicators of product (functional characteristics, reliability, etc.).

Defendant stated that when assessing tenders taken into consideration the recommendation of the expert (specialized) company – GKPGH “Kievgas,” under which the product quality LLC LZTA “surpasses the rest.

Application of this recommendation is not consistent with paragraph 10 of Article 26 of the Act, states that “to assess the bids may be involved in the relevant expert organizations or individual experts, whose recommendations can be used in determining the winner of the procurement procedure.”

According to Articles 1, 4, 5 of the Law of Ukraine “On scientific and technical expertise” on February 10, 1995, scientific and technical expertise in the field of applied research, including at the stage of practical application (implementation, use, consequences of use, etc . etc.), produced by individual organizations and corporations and individuals that have received accreditation for this activity.

Respondent has not provided evidence that GKPGH “Kievgas has been accredited by the state to implement this kind of expertise. And because the specified company is neither an expert nor an expert organization, which could be held to evaluate the bids.

According to the order of the Ministry of Economy of Ukraine as of December 26, 2000 № 280 “On Approval of Regulations on the establishment and major functions of the tender committees for the organization and implementation of procedures for the procurement of goods, works and services for public funds, decision-making of the tender committee formalized protocol.

The law states that will not be disclosed: the number of points put up tender proposals for each evaluation criterion; motives that guided the tender committee in the election winner; information regarding the examination, comparison and evaluation of bids. Disclosure of this information is permitted only by court order (Part 2 of Article 17 of the Act).

Thus, to establish the circumstances of evaluation of tender offers, first and foremost, it should be stated in the Commercial Court of the petition for the recovery of the customer’s record of assessment of tender proposals and report on the implementation of procurement procedures, the keeping of which is mandatory for customers (Article 17 of the Act).

Rationale for non-compliance findings Act Respondent accepted criteria 2-4, the Plaintiff filed after reading these materials.

5. During the organization of public procurement procedures and the Respondent violated the provision of part 1 of article 19 of the Act. Since the announcement in the bulletin “Messenger of public procurement has not identified the essential conditions of public procurement, such as: the number and location of delivery of goods, delivery of goods, eligibility requirements, which must meet the performers.

The above facts indicate that violated the legitimate interests of plaintiff, that is actually based on the results of the tender with it, rather than with the other party should enter into a contract of state procurement. Also, it suffered damages in the amount of the costs of bank guarantee for bid security. In accordance with Part 7 of Article 37 of this cost recovery is possible only by a court decision to annul the tender results.

Economic Court of Kyiv to participate in a third party without the independent claims were brought LLC LZTA “- the winner of bidding, certain Defendants.

The Economic Court of Kiev claim. The decision also stated that the absence in the tender documents the Respondent’s methodology for assessing the criteria that determine the best proposal and the participants of the tender qualification requirements, the objective of the transparency of government procurement and objectivity of the winner. The decision came into force in connection with inappropriate appellate court to consider the Respondent’s appeal. Resolution Appellate Commercial Court of Kiev was not appealed, the appeal not been lodged.

PYSARENKO Oleksandr.