Threshold conditions (T&Cs) in a tender constitute a mandatory criterion and serve as the initial screening phase for participation in the bidding process.
The threshold conditions are the single most important element in a tender. They shape the rules of the game and act as a preliminary filter that pre-determines who can compete and who is left out.
Every bidder is obligated to meet the threshold conditions before the final deadline for bid submission. Accepting a bid that does not meet the T&Cs violates the principle of equality, both towards other bidders who submitted valid proposals and towards potential bidders who refrained from participating, knowing they did not meet the conditions. Validating a bid that fails to meet the threshold conditions at the time of submission, even if the requirements are met later, creates an unfair advantage for that bidder and results in a harmful, retroactive change to the tender rules.
When a contracting entity establishes threshold conditions, they attempt to find a balance between ensuring that competitors have the proven ability to deliver the required services or products at the necessary quality and scale, and the desire to allow as many qualified competitors as possible to submit bids. This is assuming the contracting entity is not unfairly favoring a specific competitor for various reasons (such as being satisfied with a current supplier or, God forbid, in cases where a certain supplier attempts to bribe the contracting entity).
Sometimes, contracting entities impose excessive threshold requirements, not for malicious reasons, but simply due to insufficient consideration, pressure from the existing service provider, or because broad competition is less important to the entity than the peace of mind derived from receiving the service or product from a large and experienced body. |
What are Clarification Questions Regarding the Threshold Conditions?
The first action upon approaching a tender is to verify the threshold conditions. It is essential to read the T&Cs with great care and ensure there is no doubt that they are met. If a bidder believes they cannot meet the threshold conditions, they have the option to submit a clarification question to the Tender Committee, with the aim of seeking a change in the T&Cs. This approach is critical, as it is the best opportunity to effect a change in the threshold conditions.
Even if there are parties within the Tender Committee or behind the scenes attempting to tailor the tender to a specific candidate, the Committee as a whole is an objective body, and these issues are usually reviewed by the Committee’s legal counsel. Therefore, it is important to act quickly and decisively.
When Should the Tender's Threshold Conditions be Checked?
The threshold conditions should be checked twice: once when the tender documents are published, and a second time after the responses to clarification questions are released (and essentially after every update to the published tender documents by the Tender Committee). The reason is that just as the Tender Committee may ease the requirements for participation, they may also tighten them. Sophisticated competitors can use clarification questions not only to open the door for themselves to participate but also to attempt to close the door on their competitors.
Not Meeting the Threshold Conditions? There is Action You Can Take
If a bidder does not meet the threshold conditions, the option is open to file an Administrative Petition with the court before the final deadline for bid submission, alongside a request for an injunction to halt the tender. Failure to file a petition and yet participating in the tender is tantamount to accepting its terms (see [Case Citation Placeholder]). Only in such a case can the court be asked to change the threshold conditions before the tender’s “final whistle.” Such petitions are challenging but can be granted if one succeeds in demonstrating that the Tender Committee’s refusal to relax the threshold conditions was unreasonable. It is crucial to remember that, usually, the timeframe for filing such a petition is only a few days, and it is a complex procedure requiring great expertise and specialization. Due to the high sensitivity involved with threshold conditions, it is recommended to involve an attorney specializing in tender law as early as the clarification question phase. A knowledgeable and experienced attorney can provide professional advice, streamline the process, and prevent errors that could lead to the disqualification of the bid or prejudice the participant’s rights.
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Do You Believe the Winner Fails to Meet the Tender's Threshold Conditions?
If a bidder believes that a candidate who won the tender does not meet the threshold conditions in a way that infringes on the principle of equality or could change the tender’s outcome, they may appeal to the Administrative Affairs Court with a request for an injunction to stop the contract with the winner. In such cases, it is important to recall legal principles established in case law, which lead to a preference for an interpretation that allows the tender to proceed while upholding the principles of equality and fair competition. However, this does not permit the contracting entity to deviate from a clear interpretation of the threshold conditions or create a novel interpretation that could prejudice other bidders. This principle is intended to ensure certainty and transparency in the tender process while maintaining fair competition, especially when bidders may have refrained from participating due to the declared threshold conditions.
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Expert Tender Law Attorney | Dr. Guy Carmi
Expert Tender Law Attorney | Dr. Guy Carmi
As an experienced attorney with extensive seniority in the procurement arena, Dr. Guy Carmi combines in-depth knowledge and long-standing experience that yield a significant competitive advantage. Dr. Carmi operates proactively to prevent legal pitfalls, while meticulously ensuring full compliance with the strictest standards and legal requirements. In cases of disputes or appeals, Dr. Carmi represents his clients with resolve and professionalism, maintaining an uncompromising dedication to their rights and a constant aspiration to achieve the best possible outcome.
Dr. Carmi possesses extensive experience in dozens of tender administrative petitions and in representing all relevant players in tender law. Dr. Carmi’s reputation in the field of tenders and the high professional standard of his work lead Tender Committees and the Courts to treat his appeals seriously, with the court being attentive to his arguments.
Dr. Carmi consistently represents the Tender Committee of Clalit Health Services, one of the largest entities in the Israeli economy, and additional tender committees such as Mekorot (Israel’s National Water Company) and the Netanya Municipality. Furthermore, Dr. Carmi has represented dozens of companies that won tenders and were forced to defend their win in court, or companies that lost and challenged the victorious competitor.
His prominent clients include major companies in the economy, including the Tender Committees of Clalit Health Services, Mekorot, and the Netanya Municipality, large international clients such as Alstom (Jerusalem-Tel Aviv Railway Line Tender), Keinan-Sheffy Ltd., Medtechnica Orthophone Ltd., ILEX Medical Ltd., Nevo Medical Ltd., Sheleg Lavan (1986) Ltd., transportation companies (Bon Tour, Metayley Al-Mi), large contractors (Peretz Bonei Hanegev, Sharbat Brothers), and others.