From the Bench: When does a tender defect undermine the entire offer?

A judgment by the Court of Appeal on January 29 in the case Europharma Limited vs the Central Procurement and Supplies Unit at the Ministry for Health and Active Ageing constituted a significant contribution to Maltese public procurement jurisprudence. 

Presided over by Chief Justice Mark Chetcuti, together with judges Robert Mangion and Simone Grech, the court’s decision provides useful guidance on the application of the principles of proportionality, equal treatment, and the permissible scope of clarification in public tendering procedures.

The case raised an important question: to what extent may a contracting authority disqualify an economically advantageous tender due to a formal defect, where the relevant information is contained elsewhere in the submission and no substantive non-compliance arises?

Background to the dispute

The appeal in this case arose from a public tender for the supply of mobile therapeutic machines with reduced environmental impact. The Department of Contracts rejected Europharma Limited’s tender on the basis that the company failed to indicate the manufacturer and model number of the offered equipment in the Technical Offer Form, a requirement falling under Note 3 of the tender documentation. As such information was classified as non-rectifiable, the offer was deemed technically non-compliant, and Europharma was disqualified.

This decision was upheld by the Public Contracts Review Board in its decision of 14 October 2025, notwithstanding the fact that Europharma’s financial offer was substantially lower than that of the successful bidder, Associated Equipment Limited (C-9340), by approximately €141,000.

Europharma subsequently appealed the Board’s decision before the Court of Appeal, sitting in its superior jurisdiction.

The Court of Appeal’s considerations

In its analysis in Europharma Limited v Central Procurement and Supplies Unit, the Court of Appeal undertook a detailed review of both local and European procurement jurisprudence. Central to its reasoning was the acknowledgement that, although the manufacturer and model number were omitted from the Technical Offer Form, the same information was clearly included elsewhere in the tender submission, specifically within the Declaration of Conformity Amendment.

The court held that, in such circumstances, the clarification mechanism could have been legitimately employed. Importantly, the court emphasised that any clarification sought from Europharma would not have resulted in the submission of new information, but merely in identifying where the already-existing information could be found within the tender documentation. The court thus drew a clear distinction between impermissible post-submission modification and permissible clarification of an existing offer.

While recognising that the tender documentation required the information to be included in a specific form, the court concluded that rigid adherence to form could not be justified where such adherence served no substantive purpose and did not safeguard equal treatment among tenderers.

An interesting aspect of the judgment was the court’s observation, albeit obiter, that the offer submitted by the successful bidder did not itself indicate the brand of the equipment. Despite this omission, the offer was not deemed technically non-compliant and was awarded the tender.

Although the court acknowledged that it lacked jurisdiction to reassess the technical compliance of the successful bidder’s offer, this observation reinforced concerns regarding consistency and equal treatment in the evaluation process. The court implicitly highlighted that procedural rigour must be applied uniformly and cannot be selectively enforced to the detriment of one bidder.

A central pillar of the court’s reasoning was the principle of proportionality. The court reiterated that public procurement rules are not an end in themselves, but a means of achieving legitimate objectives, chief among them, obtaining the best value for public funds while ensuring fair competition.

The court found that disqualifying Europharma solely because the required information appeared in a different section of the tender documentation was disproportionate. The court held that the omission did not affect the substance of the offer, did not confer any competitive advantage, and did not compromise the transparency or integrity of the procurement process.

This conclusion was reinforced by the stark price differential between the competing offers: €243,287.44 submitted by Europharma as against €384,321.71 offered by the successful bidder. Thus, excluding the more economically advantageous tender for a purely formal reason risked frustrating the very objective of the procurement exercise.

The court was careful to note that its conclusion would have been different had the required information been entirely absent from the tender submission. It noted that in such a scenario, disqualification would have been justified.

The court’s decision

In light of these considerations, the Court of Appeal upheld Europharma’s appeal. It revoked the decision of the Public Contracts Review Board, upheld Europharma’s objection to the award of the tender to the successful bidder, ordered the removal of Europharma’s disqualification, and annulled the award to the successful bidder.

The court further ordered that the tendering process be reconsidered afresh by the Department of Contracts, with Europharma included as a valid tenderer.

The judgment is final and not subject to appeal.

Arthur Azzopardi is managing partner and Alizée Micallef, junior associate at Arthur Azzopardi & Associates.