On the 8th of April 2025 the Court of Appeal in its superior jurisdiction delivered a significant judgement overturning a decision of the Public Contracts Review Board on the legality of the cancellation of a tender by the Valletta Local Council (hereinafter the “Local Council”).
In September 2023 the Local Council, as the Contracting Authority, issued a call for tender for the restoration of the façade of St Paul's Church in Valletta. After several bidders submitted their bids, the Evaluation Committee issued its report wherein the preferred and technically compliant bidder was identified. Subsequently, before the Local Council officially executed the contract with the preferred bidder on the basis of the Evaluation Committee's report, the Local Council proceeded to cancel the whole tendering process, without giving reasons for such cancellation. The bidders were only sent an automated email stating that the procurement procedure had been cancelled, with no further information being provided. No action was taken by the preferred bidder at this stage.
In May 2024, the Local Council reissued the call for tenders thereby restarting the procedure for a new tender which was identical to the original one, however this time the reissued tender was issued as an accelerated procedure, which in terms of Regulation 116(3) of the Public Procurement Regulations (S.L. 601.03 – the “Regulations”) is the procedure adopted when “a state of urgency duly substantiated renders impracticable the time limit” which generally applies to open procedures. This reissue implied the appointment of a new Evaluation Committee for the evaluation of new bids.
In light of the fact that all bids of the previous tender had been made public (as is required under the Regulations), most bidders were forced to lower their prices to remain competitive, correctly assuming that competing bidders would adjust their rates accordingly. Once the deadline for the submission of new bids elapsed, the Evaluation Committee prepared its report on the basis of the new bids and presented it the Local Council, once again identifying the same company as the preferred compliant bidder.
Once again, the Local Council proceeded to immediately cancel the procurement process without giving the bidders any justification for the second cancellation, in breach of its obligations, in its role of Contracting Authority, under the Regulations which provide that “The decision leading to the cancellation of a procurement procedure has to be made in writing and must include the findings and the reasoning that led to this decision”.
Feeling prejudiced by this arbitrary decision and the complete lack of information provided to justify it, the preferred bidder appealed the cancellation of the procurement procedure by filing appeal proceedings before the Public Contracts Review Board (hereinafter the “PCRB”), in terms of the Regulations.
In the proceedings before the PCRB, the Local Council argued that it suspected that the tender process was vitiated as a result of an alleged conflict of interest, without producing any substantial evidence of this allegation and without addressing the fact that it failed to give the bidders the findings and reasoning that led to its decision , as it is required to do under the Regulations. The preferred bidder argued that, having failed to give such reasons, the Local Council's decision to cancel the tender breached public procurement laws, to the detriment of the preferred bidder.
Surprisingly, the PCRB did not accede to the preferred bidder's appeal and instead decided to confirm the Local Council's decision for the cancellation.
The preferred bidder appealed to the Court of Appeal to have the decision of the PCRB reversed. In the proceedings before the Court of Appeal, the preferred bidder argued amongst other things that a tender process cannot be cancelled without just cause and without giving reasons for the cancellation to the bidders, all of whom have an interest to know the details of any decisions taken pertaining to the tender which they have bid for.
The Court of Appeal, agreeing with the preferred bidder's arguments, provided that a simple automated email stating that the tender had been cancelled, without including specific details as to the justification for said cancellation, certainly did not suffice to satisfy the Valletta Local Council's obligations.
On this basis, the Court of Appeal proceeded to accede to the preferred bidder's appeal, by overturning the decision of the PCRB and ordered that the decision of the Local Council to cancel the tender be overturned too. The Court decided to revert the tender procedure back to the status quo ante, before the Local Council's decision was delivered, thereby continuing the procurement procedure.
The Local Council is now expected to take a decision on the report finalised by the Evaluation Committee, whereby the preferred bidder was identified. To date, the Valletta Local Council has not complied with the Court of Appeal's orders.
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