Review Body on Bid Challenges
Summary of Case No. 03/2003
The rejection of a tender proposal for the supply of 174,000,000 tablets of Nifedipine sustained-release tablet 20 mg to the Government of 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 Articles III, IV, VI and XII of the World Trade Organization Agreement on Government Procurement (GPA) in a tender exercise for the supply of 174,000,000 tablets of Nifedipine sustained-release tablet 20 mg.
The respondent said that although the price offered by the complainant was the lowest among the tenderers, its tender proposal was not accepted since the holder of the Certificate of Registration issued by the Pharmacy and Poisons Board of Hong Kong as provided by the complainant in its tender proposal was not the complainant itself. Besides, there were discrepancies between the drug samples and the information and data of the product specification submitted by the complainant. Further, the complainant failed to provide all the required documentary evidence as set out in the Conditions of Tender.
The complainant, however, maintained that for pharmaceutical products manufactured outside Hong Kong, the required submission of marketing authorization issued by the national control authority of a member country of the International Conference on Harmonization (ICH), the People's Republic of China or Australia as set out in the Conditions of Tender created unnecessary obstacles to international trade. The complainant also considered the requirement a form of discriminatory treatment regarding the country of origin, hence breaching Articles III and IV of the GPA. Moreover, the complainant added that the Conditions of Tender did not require that as far as the pharmaceutical product was concerned, the tenderer should be the holder of the Certificate of Registration issued by the Pharmacy and Poisons Board of Hong Kong, and that each tablet should bear the printed information of its major ingredients. Therefore, the rejection of the complainant's tender proposal by the respondent on the above grounds was a breach of Article VI and paragraph 2(g) of Article XII of the GPA.
A Panel comprising a Deputy Chairman and two members of the Review Body was set up to consider the bid challenge. The complainant proposed that the respondent should suspend the execution of the contract as a Rapid Interim Measure (RIM) to allow a negotiation between the two parties. 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.
The Panel conducted a hearing to examine the case on 15 August 2003. The decision of the Panel is summarized as follows:
- The Panel considered the standard of ICH an international standard. The adoption of the ICH standard was in conformity with paragraph 2(b) of Article VI of the GPA. Moreover, manufacturers of non-ICH member countries could apply to any ICH member country for the granting of marketing authorizations. Thus, the relevant condition of tender was not discriminatory.
- The Panel accepted the grounds on which the respondent rejected the tender proposal offered by the complainant.
- In view of the above reasons, the Panel determined that the tender exercise had not breached the GPA.