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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
Brand Hong Kong - Asia world city

Review Body on Bid Challenges

Summary of Case No. 01/2007

The rejection of a tender proposal for the provision of
maintenance services for East Kowloon, West Kowloon and
Tsuen Wan Area Traffic Control Systems to the
Government of the Hong Kong Special Administrative Region (HKSARG)


Company A (the complainant) lodged a bid challenge to the Review Body against the HKSARG (the respondent) for breaching Article XIII(4) of the World Trade Organization Agreement on Government Procurement (GPA) in a tender exercise for the provision of maintenance services for East Kowloon, West Kowloon and Tsuen Wan Area Traffic Control (ATC) systems.

The complainant and another company (Company B) were the only two tenderers who had submitted tenders in full compliance with the requirements set out in the tender documents. The tender contracts were eventually awarded to Company B (the successful tenderer). The complainant considered that there was impropriety and/or irrationality in the marking scheme and HKSARG failed to make the awards in accordance with the criteria and essential requirements specified in the tender documentation. The complainant alleged that the successful tenderer failed to fulfil the requirement of "confirmation on the availability of spare parts for maintenance of in-station equipment" set out in the tender documentation as the successful tenderer should not be able to confirm the availability of five "critical" in-station spare parts. In a reply letter given by the respondent to the complainant, these five spare parts were regarded as "non-core" elements. However, this categorization of "core" and "non-core" elements was not defined or specified in the marking scheme or the tender document. 

A Panel comprising the Chairman and two members of the Review Body was set up to consider the bid challenge. A one and a half-day hearing was conducted to examine the case.

The major points in the decision of the Panel are summarised as follows -

  • The Panel was of the view that as long as the tenderer could reasonably assure the Tender Assessment Panel at the time of assessment that the necessary spares would be available if and when required, the Tender Assessment Panel was entitled to regard the tender requirement of "confirmation on the availability of spare parts for maintenance of in-station equipment" as satisfied. How and where the tenderer was to secure such spare parts was not the concerns of the Tender Assessment Panel. 
     

  • The successful tenderer made a confirmation on availability of spare parts in its tender proposal and two companies (Companies C and D) were named as supporting companies with their letters of support annexed. The Panel accepted that having regard to the past experience of the successful tenderer in maintaining the ATC System in Hong Kong Island, and Companies C's/D's and their staff's experience in maintaining ATC system and undertaking to hold sufficient spare parts, the Tender Assessment Panel had no reason to doubt the ability of the successful tenderer to secure the necessary spare parts for maintenance purpose.
     

  • The Panel also accepted that the respondent's classification of in-station equipment into "core" and "non-core" elements was only to respond to the complainant's query regarding "critical" spare parts in the ATC System and not otherwise. The writer of the reply letter was not a member of the Tender Assessment Panel and he was out of town at the time of tender assessment. There was no evidence to suggest that the Tender Assessment Panel adopted a secret classification not made known to the tenderers at the time of tender.
     

  • The Panel considered that the Tender Assessment Panel had taken into consideration all relevant matters and excluded all irrelevant matters in the conduct of the assessment. The award of full marks for the concerned item to the successful tenderer was in accordance with the criteria and requirement set down in the tender documentation. The assessment was fair and there was no procedural error.
     

In view of the above reasons, the Panel determined that the challenge was not substantiated and the tender exercise had not breached the GPA.