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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. 02/2003

The rejection of tender proposals for Central Reclamation Phase III

Three companies (Company A, B and C) lodged bid challenges to the Review Body against the Hong Kong Special Administrative Region Government (the respondent) for breaching the World Trade Organization Agreement on Government Procurement (GPA) in a tender exercise for the Central Reclamation Phase III.

A Panel comprising the Chairman and two members of the Review Body was set up to consider the various complaints made by the complainants. The Panel conducted a five-day hearing to examine the case.

The Panel was of the view that Company A had established a breach of the GPA with regard to its complaint regarding a tender condition on pricing certain portion of the work, namely the Special Condition of Tender Clause 2 (SCT2). According to SCT2, failure to price the tender in accordance with the condition may invalidate the tender. Company A was able to comply with the condition and it had the highest score among the tenderers. However, the respondent decided eventually not to apply the SCT2. Company A was then no longer the lowest bidder.

The Panel's recommendations in respect of this bid challenge are as follows :

  1. The Panel recommends the procuring entity asks both Company A and the successful bidder to re-tender.
  2. If the Respondent feels unable to accept the above recommendation because it has entered into a binding contract with the successful bidder, the Panel asks the Procuring Entity to insert in all tenders a clause which enables the suspension of the implementation of the successful contract for so long as the contract is subject to a review by the Panel.

The Panel also made general and specific observations relating to confidentiality, transparency and burden of proof.

For the other challenges raised by the three companies, the Panel did not find that there had been any breach of GPA.