The Supreme Administrative Court rendered the 105-Pan-5 Administrative Decision of January 7, 2016 (hereinafter, the “Decision”), holding that if a bid-winning supplier fails to deliver according to the objectives of an obligation with performance delayed for reasons attributable to the supplier, the degree of the supplier’s imputability should still be considered in determining if this matter should be published in the Government Procurement Gazette.
According to the facts underlying this Decision, the Appellant participated in the procurement project organized by the Appellee. After the contract was awarded, the parties entered into the agreement at issue. Since the Appellee believed that the Appellant had delayed in proposing a method and design required under the agreement with no improvement even after being notified to quicken the construction and to rectify within a required period with the construction progress lagging behind schedule by 69.34%, the Appellee rendered the original disposition and informed the Appellant that this issue with the Appellant would be published in the Government Procurement Law since the Appellant was subject to “reasons attributable to the supplier that result in performance delay in material aspects” under Article 101, Paragraph 1, Subparagraph 10 of the Government Procurement Law. The Appellant filed opposition, which was rejected by the Appellee. Still dissatisfied, the Appellant filed a petition, which was rejected as a result of petition examination, before bringing this administrative action.
According to the Decision, Article 1 of the Government Procurement Law and the legislative reasons of Article 101 of the same law suggest that the Government Procurement Law seeks to create a fair and open procurement procedure, maintain a fair and just competitive market and eliminate bad suppliers so as to achieve efficient government procurement. After a procurement contract is executed, the bid winning supplier is obligated to deliver pursuant to the objectives of the obligation, and if delivery is not made according to the objectives of the obligation, if performance is delayed for reasons attributable to the supplier, or if the procurement contract is rescinded or terminated, the “reasons attributable to the supplier which cause performance delay” under Article 101, Paragraph 1, Subparagraph 10 are satisfied. This is not preconditioned by full attributability of such reasons. If part of such reasons are attributable to any third party or the procuring agency, the degree of attributability should be considered in determining if such matter will be published in the Government Procurement Gazette. To wit, the materiality of a default should be considered in order to meet the principle of proportionality.
It was further held in this Decision that the Appellant was obligated to conduct construction as scheduled under the agreement. However, the construction progress seriously lagged behind schedule with material delay. This was indeed attributable to the Appellant and had nothing to do with the Appellee. Since the default was material and the original disposition concerning publication in the Government Gazette was not illegal, the Appellant’s appeal was rejected.