The Supreme Administrative Court rendered the 106-Pan-331 Decision of June 22, 2017 (hereinafter, the “Decision”), holding that participation in a tender by borrowing the name or certificate of another supplier to achieve the minimum statutory number of bidders so as to win the tender still constitutes illegal tender participation in the name of another supplier.
According to the facts underlying this Decision, the Appellant had participated in the Defendant’s procurement project at issue before it was subsequently informed by the Appellee that it was subject to the circumstances under Article 101, Paragraph 1, Subparagraph 2 of the Government Procurement Law and would be published in the Government Procurement Gazette. After the Appellant’s protest and petition against the review decision were rejected, the Appellant brought this administrative action.
Article 101, Paragraph 1, Subparagraph 2 of the Government Procurement Law provides: “Where a procuring agency finds that a supplier is subject to any of the following circumstances, the agency shall notify the supplier of the facts and reasons related thereto, and indicate with a note in the notification that it will be published on the Government Procurement Gazette if the supplier does not file a protest: …(2) where the supplier borrows or assumes the name or certificate of another person or uses forged documents or altered documents to participate in a tender or enter into or perform a contract…”
According to the Decision, if a tenderer borrows or assumes the name or certificate of another person to participate in a tender to create the false impression that multiple suppliers are separately competing for this tender project, this is sufficient to cause the tender examiners to misbelieve that such tenderer does have competitive relationship with the other suppliers and damage the price competition function of a tender procedure.
Therefore, this runs the risk of causing inaccurate bid-opening results when the procuring government agency seeks to secure and enhance the quality of government procurement by obtaining optimal bid-winning terms through a fair competition procedure for suppliers. Even though the borrower is a qualified tenderer, still borrowing or assuming the name of another supplier to participate in the tender in order to achieve the statutory minimum number of tenderers and win the tender still falls within the scope of participation in a tender by borrowing or assuming the name of another person within the meaning of the above-mentioned provision.
The original decision concluded that the Appellant broke the law based on evidence that showed that although the two companies offered different tender prices, the amounts of their bid bonds were exactly the same, and that one of the companies did not intend to win the tender and was merely willing to lend its certificate for tender participation. Therefore it was held that since the Appellant violated the law, the original disposition which published the Appellant in the Government Procurement Gazette was lawful. According to this Decision, since the original decision made no error in the interpretation of laws or regulations or there was any insufficient ground such as application of laws and regulations in contravention with the applicable laws and regulations for this matter, contradiction with interpretations or legal precedents, or failure to apply relevant laws or regulations or application of inappropriate laws in the original decision, the Plaintiff’s appeal was rejected and the decision against the Plaintiff was upheld.