Basic case

 

C Group company commissioned a bidding agency for the equipment required for the "technical transformation project" to conduct public bidding in China, and a repair factory participated in the technical transformation equipment bidding, and submitted a bid deposit of 300,000 yuan according to the requirements of the bidding documents。On December 9, 2013, the bidding project was opened as scheduled。On March 5, 2014, C Group Company sent a letter to the bidding agency due to funding problems, proposing to cancel the tender。On May 4, 2014, the bidding agency notified the repair factory of the termination of the tender and returned its bid security without interest。

 

The repair factory thinks，The bidding agency and C Group company violated relevant national laws and regulations in this bidding activity，Infringed on their legitimate rights and interests，Then the tenderer and the bidding agency will appeal to the court，Request the bidding agency to return double the bid security，It requires the tenderer to compensate its profit loss of more than 1 million yuan and bear the travel expenses and other contracting costs of 100,000 yuan incurred in participating in the tender。

 

After hearing, the court held that the bidding announcement was an invitation to offer, the bidding act was an offer, and C Group company did not identify the repair factory as the winning bidder, that is, it did not make a commitment, so the two parties did not establish a bidding and bidding contract relationship。If the contract is not established, there is no possibility for the parties to breach the contract。The current law of our country does not stipulate the double return of the deposit, but only the deposit。

 

In addition, the right of bidding should belong to the tenderer, the repair factory has not won the bid, the basic conditions for obtaining the relevant profits have not been established, and its demand for payment of profits has no corresponding basis and is not reasonable。At the same time, the bidder has promised at the time of bidding that it will bear the expenses incurred by participating in the bidding activities。In the end, the court rejected all the claims of the repair factory。

 

Legal analysis

 

This case is a typical dispute caused by the tenderer's termination of the tender。

 

Although the court from the perspective of the contract law and found，The tenderer shall not bear the contract responsibility for the consequences of the tenderer's failure to win the bid，However, this judgment is only made from the perspective of property disputes between equal civil subjects，Bidding and tendering is a special civil legal act，It is not only regulated by the Contract Law，It is also regulated and adjusted by administrative management-oriented procedural laws and regulations such as the Tendering and Bidding Law and its supporting regulations。If the tenderer violates the existing Tendering and Bidding Law and its supporting regulations during the bidding process, the tenderer may bear more legal liabilities, including civil liabilities and administrative liabilities, than the non-tendering method。

 

According to the current law, tenderers should pay attention to two aspects when starting and terminating bidding activities。

 

The tender may not be terminated at will after the tender announcement or the tender document (or pre-qualification document) is issued, except due to force majeure

 

Article 14 of the Measures for Bidding and Tendering of Goods for Construction Projects stipulates that, except for force majeure reasons, the tenderer shall not terminate the bidding without authorization after issuing the bidding documents or pre-qualification documents。

 

In other words, unless there is a force majeure event, the tenderer terminates the tender after issuing the tender document, which is an illegal act。Obviously, the fund problem does not belong to force majeure, so in this case, the tenderer terminates the tender because of the fund problem should be illegal termination of the tender。

 

Although the current law does not directly provide a clear legal responsibility for illegal termination of tenders，However, in accordance with the provisions of Article 80 of the Tendering and Bidding Measures for Construction Projects，The tenderer of a project subject to tender according to law fails to issue a notice of winning the bid without justifiable reasons，The relevant administrative supervision department shall order correction，May be imposed a fine of not more than ten thousandths of the amount of the winning project;Causing loss to others，Bear the liability for compensation according to law;The persons directly in charge of the unit and other persons directly responsible shall be given sanctions according to law。

 

In this case, although the court did not decide that the tenderer should bear legal responsibility, the administrative supervision department may still punish the tenderer according to the above provisions。

 

If the tenderer terminates the tender due to special reasons (but not force majeure), it shall still comply with the principle of "openness, fairness and justice" to perform the necessary notification and statutory refund obligations, so as to reduce or reduce the legal risks of complaints and lawsuits by potential bidders, bidders and other interested parties

 

Nine departments, including the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, and the Ministry of Housing and Urban-Rural Development, issued the Decision on Abolishing and amending some Bidding Regulations and normative Documents in 2013 (Order No. 23 of 2013) (hereinafter referred to as the "Order No. 23").，The administrative penalty clause for the tenderer to terminate the tender illegally has been cancelled。

 

However, this adjustment does not mean that the tenderer obtains the right to arbitrarily terminate the tender, on the contrary, the result of the revision of Order No. 23 emphasizes that unless force majeure occurs, the termination of the tenderer is illegal termination of the tender。Termination of bidding even under legal conditions，The tenderer shall also timely publish an announcement or notice of termination of tender，Refund the corresponding fees of those who have purchased the bidding documents;If bid security has been collected from (potential) bidders，The tenderer shall also return the bid security paid by the bidder and the interest on the deposit in the bank for the same period;The bidder suffers losses as a result，Shall be liable for compensation。

 

Lawyer's note

 

According to the current provisions of the bidding law, if the tenderer terminates the bidding (even if it is a lawful termination of the bidding) and causes losses to the potential bidders or bidders, the tenderer shall bear the corresponding liability for compensation。

 

 

 

In this case, the court did not support the bidder's request for compensation for contracting losses, which the author thinks is inappropriate。In other similar cases, most courts have ruled that the tenderer should bear the corresponding compensation liability when terminating the tender illegally。

 

If the tenderer really needs to terminate the tender after the bid opening (not due to force majeure)，Considering that the bidder has invested a certain amount of manpower and financial resources for this tender，To better appease bidders or potential bidders，Avoid complaints，The tenderer may make appropriate compensation for the tenderer's losses，This includes waiving the bidding document fee (if any) of the previous participating manufacturers when the terminated project is eligible for re-bidding。

 

In this case, the bidder brought the tenderer and the bidding agency to court together, and the court held that the bidding agency was not improper as the defendant in this case。

 

Article 167 of the General Provisions of the Civil Law stipulates that if an agent knows or should have known that the agency matter is illegal and still carries out the agency act, or if the principal knows or should have known that the agent's agency act is illegal and fails to express opposition, the principal and the agent shall bear joint and several liability。

 

The above provisions establish the possibility that the principal and the trustee bear joint and several liability based on the entrusted matters。Therefore, as the trustee in the entrusting legal relationship, the bidding agency may jointly bear joint liability for the civil liability caused by improper entrusting behavior (including illegal termination of bidding) with the tenderer because of the establishment of the entrusting relationship。

 

Therefore, in the actual operation, the bidding agency should strive to further clarify in the entrustment contract signed with the tenderer, "the loss caused to the bidding agency due to the reasons of the client (including but not limited to the termination of the tender) shall be borne by the client." 。