Court overturns tender award for Marsa Cultural Hub works and orders re-evaluation

The Court of Appeal has annulled a Public Contracts Review Board decision and the award of a major construction tender for works on the Marsa Arts and Cultural Hub, after finding that evaluators wrongly disqualified the lowest-priced bidder.

The appeal was brought by Green Building Solutions Ltd (GBS) against Festivals Malta Agency, the Contracts Department, and the consortium awarded the contract, SB Marine Works JV. The tender, issued in December 2024, concerned demolition, excavation, and piling works for the new cultural hub in Marsa. The selection criterion was the lowest compliant offer.

GBS had submitted a bid of €3.1 million, lower than the €3.39 million offer made by the successful bidder. However, the evaluation committee and the Review Board ruled GBS’s bid non-compliant, citing concerns over the feasibility of the timeframes indicated in its work schedule and the inclusion of works not expressly listed in the tender.

In its judgment, the Court of Appeal, composed of Chief Justice Mark Chetcuti, Judge Robert G. Mangion and Judge Grazio Mercieca, held that the review board had misinterpreted the tender conditions. The court found that the twelve-month contract duration stated in the tender documents was a maximum execution period, not a minimum. Disqualifying GBS for proposing to complete the works in less time was therefore incorrect.

The court also ruled that the evaluation committee had overstepped its remit by carrying out an assessment of the feasibility of the proposed timelines. Citing established procurement principles, the court noted that evaluators must assess whether the programme covers the required works and falls within the maximum timeframe, but not whether the programme is realistically achievable. Any subsequent failure to perform on time is addressed through contractual penalties and termination mechanisms.

The judges further held that GBS’s inclusion of additional works beyond those expressly requested did not justify disqualification, as tender rules provide for exclusion only where the minimum required works are not met. Penalising a bidder for offering more than required breached the principles of transparency, equal treatment, and self-limitation.

As a result, the court annulled both the review board’s decision and the award of the contract. It ordered GBS’s offer to be reinstated into the tender process and returned to the contracting authority for a new adjudication. The court also ordered Festivals Malta and the Contracts Department to refund GBS’s deposit and pay the costs of the appeal.

However, the court drew attention to the significant difference between GBS’s bid and the tender’s estimated value of €3.97 million. It invited the evaluation committee to consider whether Regulation 243 on abnormally low tenders should be applied during the renewed assessment.