The Public Procurement team from our Latvian office helped SIA PROLUX successfully challenge the results of the negotiation procedure “Delivery and installation of kitchen equipment at the Jelgava state municipality educational institution Jelgava Technology Secondary School” (the Negotiation Procedure) at Meiju Road 9, Jelgava, organised by Jelgava city municipality (the Client) and held at the Procurement Monitoring Bureau (PMB).
This IUB decision is important not only in the context of this case, but also for the improvement of the procurement environment, as it clarifies under which circumstances it is permissible to conduct a negotiation procedure in case of the termination of an open tender, and under which circumstances it is permissible to conduct a competitive procedure with negotiation without the publication of a contract notice, negotiating only with those suppliers who participated in the open tender.
Actual circumstances
The Client conducted the negotiation procedure because it had closed the previous open tender due to the submission of inappropriate tenders (Section 8, Paragraph 7, Clause 1 of the Public Procurement Law). However, in addition to inviting all the suppliers that took part in the open tender to take part in the Negotiation Procedure, the Client also invited one additional supplier , which was awarded the contract.
In our assessment, the Client opted for the Negotiation Procedure in order to be able to invite the successful supplier to participate, bypassing the obligation to publish a contract notice. The Client conducted the negotiated procedure in an unreasonable way, as the discrepancies in the tenders submitted in the open tender could easily have been remedied by negotiating only with those suppliers who had previously participated in the open tender as part of the Negotiation Procedure.
IUB decision
The Procurement Monitoring Bureau stated that, in order to justify conducting a negotiation procedure due to the submission of non-compliant tenders in the open tender (Section 8, Paragraph 7, Clause 1 of the Public Procurement Law) “it must be established that the tenders submitted in response to the Tender are so incapable or incompatible with the contract that no further negotiation is possible at all”. When assessing the discrepancies found in the tenders, the IUB agreed with our assessment that they could easily have been corrected or clarified during negotiations in the framework of the negotiated tendering procedure by negotiating only with those suppliers who had previously participated in the open tender. Consequently, the IUB found that the Client had acted unreasonably in organising the Negotiation Procedure.
The IUB also pointed out that if the Client wished to also invite to the Negotiation Procedure other suppliers who had not previously participated in the open tendering procedure, the Client was obliged to organise a new open tendering procedure.
Our team
Legal assistance was provided to the Client by counsel Raivo Raudzeps and senior associate Katrīne Pļaviņa-Mika.
