Timely use of pre-contractual remedies in tender processes

A recent judgment by the Court of Appeal in its superior jurisdiction given on April 8, 2025, clearly illustrates the options open to tenderers wishing to participate in a process where the tender document contains unfair tender specifications.

In ‘Martin Grima Ltd v Department of Contracts et’, the court ordered the contracting authority to change tender specifications which unduly restricted competition.

The tender was for the supply of certain specialised equipment utilised in the washing of roads and called for the supply of machines with very restrictive specifications. While the tender process was still open, the plaintiff sought clarifications from the contacting authority but was met with laconic answers referring the bidder to the technical specifications contained in the tender documents.

Unsatisfied with the answers given to its request for clarifications, the plaintiff filed proceedings in terms of Regulation 262 of the Public Procurement Regulations before the Public Contracts Review Board (PCRB). The plaintiff argued that the specifications established in the tender documents unduly restricted competition in breach of the Public Procurement Regulations, and asked the PCRB to order that they be revised.

The PCRB disagreed, finding no evidence of intent to limit competition, and holding further that the technical specifications established in the tender documents did not artificially narrow competition. 

The plaintiff, unhappy with the PCRB’s decision, appealed to the Court of Appeal. The court started by emphasising that Regulation 39(3) of the Public Procurement Regulations is intended to ensure that the design of procurement processes is not made with the intention of artificially narrowing competition.

Competition is considered to be artificially narrowed when the design of the procurement process is made with the intention of unduly favouring or disadvantaging certain economic operators.

The court then made reference to ‘Krypton Chemists Limited v Central Procurement and Supplies Unit’, where it had been decided by that Court of Appeal that in order for an argument in terms of Regulation 39(3) of the Public Procurement Regulations to succeed, it was not necessary for it to be shown that the contracting authority had acted dishonestly or with malice to place a particular economic operator at a disadvantage.

What was necessary was for it to be shown that technical specifications included in the tender documents unduly restricted competition by reducing, without an objectively valid reason, the number of economic operators that could participate in a tender process.

Proof of the actual, subjective intention of the contracting authority is not required when the facts clearly show that the technical specifications unduly restrict competition without an objectively valid reason. The court clarified further that in practice, it is sufficient for an economic operator to show that the contested specifications have the effect of restricting competition; once this is done, the onus of proving that there are legitimate, objective reasons for the inclusion of those specifications shifts to the contracting authority.

The court proceeded to observe that the PCRB had failed to follow these principles, and in particular had incorrectly held that the plaintiff was required to prove that the contracting authority had the subjective intention of restricting competition.

The court continued by examining the factual basis on which the appeal was based. The court noted that similar tenders issued in the past for the same or similar supplies contained wider technical specifications, and noted further that on the basis of evidence produced before the PCRB it appeared to be the case that the tender specifications, as drafted, in effect meant that only one or two economic operators would be in a position to participate in the call.

The court further commented that the contracting authority had failed to justify the narrow specifications that it had established in the tender documents.

On this basis, the court upheld the appeal filed by the plaintiff, declaring that the contested specifications unduly restricted competition in breach of Regulation 39(3) of the Public Procurement Regulations, and ordering the contracting authority to amend the technical specifications to allow for the participation of more economic operators.

Adrian Mallia is of counsel, WH Partners.