Changing catering tender requirements after bids were made was anti-competitive, court rules

The Court of Appeal has reversed a board’s decision to cancel and re-issue a call for tenders for catering at open and detention centres for migrants, describing it as being "unreasonable, discriminatory, anticompetitive and lacking in proportionality."

In October 2019, the Home Affairs Ministry issued a call for the provision and delivery of meals to third country nationals in open and detention centres. The deadline for tendering offers was extended from 1 October to 29 October 2019.

On 30 September, while the tender was still open, James Caterers had filed an application, requesting the board to order the contracting authority to modify the tender document in such a way as to require evidence of Halal certification and of “the adequacy of the facilities proposed by prospective tenderers.”

The board had subsequently cancelled the tender in November that year and ordered a new tender be issued, which included additional requirements.

Cateressence had filed an appeal against this decision on 17 December, arguing amongst other things that the board had failed to justify its decision to cancel the tender.

The court of appeal, presided by then Chief Justice Joseph Azzopardi, Mr Justice Giannino Caruana Demajo and Mr Justice Anthony Ellul ruled that the fact that the decision of the Revision Board had to specify the motivation behind the decision to be valid, “like every other judicial, quasi-judicial or administrative decision,” had not been contested.  

The board had done so, observed the court, but had failed to safeguard the minimum requirements of validity in the exercise of its discretion.

The issue at stake was whether there was proportionality between the need for the new conditions and the radical measure of cancelling the tender. The first condition, requiring the provision of statistics about emergency cases, did not create the necessity of cancelling the tender, said the court. Likewise the second condition, that of a site visit being carried out before the evaluation of tenders was also unnecessary and did not merit the tender’s cancellation.

But there was a more grave reason for which the decision failed the test for proportionality and also that of reasonableness, said the court - the change would put Cateressence at a competitive disadvantage as the value of its offer is now known.

Rival bidders could now undercut the offer, meaning that Cateressence can never win the contract and this meant that any decision to restart the bidding process would be anticompetitive.

“This anticompetitive factor... outweighs any advantage that could be achieved - and if there is an advantage, this hasn’t been shown - by the cancellation of the call for bids. It only serves to give an advantage to those who, till now, kept their offers hidden, which is certainly against the spirit of awarding public contracts.”

For this reason, the court declared the decision by the Board of Revision to be ultra vires - beyond the scope of its powers “as it is unreasonable, discriminatory, anticompetitive and lacking in proportionality and should therefore be revoked.”

Upholding Cateressence’s appeal, it ordered that the selection process continue with the offers which were validly submitted. 

Judicial costs were ordered to be paid by the ministry.