The Supreme Administrative Court rendered the 105-Pan-627 Decision of November 30, 2016 (hereinafter, the “Decision”), holding that the so-called “forgery” and “alteration” under the Government Procurement Law should be interpreted in a manner consistent with the objectives, should not be limited to the meaning of forgery or alteration under the Criminal Code and should also include the circumstance where the documents prepared in the name of a tenderer are untrue.
According to this Decision, after the Appellant won the procurement project at issue, the Appellee terminated the procurement contract between the parties on the ground that the list of share subscription by shareholders in cash and company balance sheets which were used to substantiate the Appellant met the financial capability requirement were untrue. The Appellant believed that the Appellee had no right to terminate the contract and, therefore, sought a declaratory judgment to confirm the existence of the public law legal relationship. The first instance court ruled against the Appellant. Dissatisfied, the Appellant appealed.
According to the Decision, the principle of good faith is a general legal principle, which applies to the people’s participation in administrative procedures and the contractual negotiations and preparatory procedures prior to the execution of an administrative contract. The tenderer’s false specification in the above qualification documents and its tendering using the forged or altered tenderer qualification documents amounted, in terms of results, to deception to the Appellee concerning the tenderer’s qualifications and also materially violated the principle of good faith. Therefore, the parties did not differentiate the reasons why the contents of the documents were false with respect to citing Article 50, Paragraph 1, Subparagraph 3 (concerning “tendering using forged or altered documents”) and Subparagraph 4 (concerning “forgery or alteration of tender documents”) of the Government Procurement Law to determine whether there was any justification for different handling of this matter if the documents were prepared by unauthorized people.
This Decision further affirmed that the original decision was not unlawful when it held that the definition of “forgery” or “alteration” under Article 50, Paragraph 1, Subparagraphs 3 and 4 of the Government Procurement Law should be interpreted in a manner consistent with the objectives, should not be limited to the meaning of forgery or alteration under the Criminal Code, and should also include the circumstance where the documents prepared in the name of the tenderer are untrue. Therefore, the Appellant’s appeal was dismissed.