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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. 02/2011

The rejection of a tender proposal for the design, supply and installation of a replacement air traffic management system and the provision of related services to the Hong Kong International Airport

Company A (the complainant) lodged a bid challenge to the Review Body against the Government of the Hong Kong Special Administration Region (HKSARG) (the respondent) for breaching the Agreement on Government Procurement (GPA) of the World Trade Organization (WTO) in a tender exercise for the design, supply and installation of a replacement Air Traffic Management System (ATMS) and the provision of related services to the Hong Kong International Airport.

The complainant alleged that the ATMS proposed by the successful tenderer did not have a proven performance record prior to the date of tender submission. As one of the Conditions of Tender provided that "[a] proposed system with no proven performance record will not be considered further", the complainant considered that the respondent had breached Article XIII.4(c) of the WTO GPA, which reads "[a]wards shall be made in accordance with the criteria and essential requirements specified in the tender documentation".

A Panel comprising the Chairman and two members of the Review Body was set up to consider the bid challenge. As the contract between the respondent and the successful tenderer had commenced, the complainant applied for no further steps to be taken by the HKSARG as a Rapid Interim Measure (RIM) with a view to preserving its business opportunity. Having considered the written representations of the respondent and the response of the complainant, the Panel decided not to recommend the respondent to implement RIM on grounds of public interest and given the correspondence thus far suggested that the issue at stake was at most a question of semantics.

Following the Panel's decision against the recommendation for an RIM, the complainant informed the Review Body that it no longer requested a hearing, but that a Paper Review would suffice. The respondent adopted a neutral position on the matter of whether a hearing should be held. The Panel then decided to consider the bid challenge based on the written submissions of both the complainant and the respondent without conducting a hearing. The decision of the Panel is summarised as follows -

  1. The Panel accepted that the wording "a system with proven performance record" must be read in context with relevant provisions of the tender document, and hence the word "System" should mean "the tenderer with the umbrella System", otherwise the respondent could neither install a new sub-system nor adopt new technology, because a new sub-system by its very nature could not possess a proven performance record. The insistence on interpreting the relevant clause to mean a past system in its entirety with a proven performance record therefore could not be correct.
  2. Moreover, the Panel found that the relevant sub-system of the ATMS proposed by the successful tenderer did possess the necessary "proven performance record". It had not seen any unfairness or bias which the respondent had operated on any tenderer including the complainant.
  3. The Panel could see no basis to support the complainant's case and therefore dismissed the complaint.