Disputes in the field of public procurement - unreasonably invalidated public procurement contract
LLP "T" filed a lawsuit with the State Institution "Department of Architecture, Urban Planning and Construction of the Akimat of Taranovsky district" (hereinafter referred to as the Institution), LLP "I" on invalidation of the contract on public procurement of works dated March 2, 2018 No. 15, concluded between the defendants. The claim was satisfied by the decision of the specialized interdistrict economic Court of Kostanay region dated September 18, 2018. The public procurement contract No. 15 dated March 2, 2018, concluded between the Institution and I LLP, was declared invalid, with a restriction prohibiting its further execution. By the decision of the judicial Board for Civil Cases of the Kostanay Regional Court dated November 27, 2018, the decision of the court of first instance remained unchanged. The Judicial Board for Civil Cases of the Supreme Court overturned the judicial acts of local courts and issued a new decision to dismiss the claim of T LLP on the following grounds. It follows from the case file that the Institution announced a tender for public procurement of construction and installation works for the project "Construction of a water pipeline and distribution networks in the village of Novoilinovka, Taranovsky district, Kostanay region." Applications for participation in the competition were submitted by 11 potential suppliers, including LLP "T" and LLP "I".
Disputes in the field of public procurement - unreasonably invalidated public procurement contract
The protocol of preliminary admission does not allow any potential supplier to participate in the tender, with a deadline for bringing applications into compliance with the qualification requirements and the requirements of the tender documentation no later than 3 working days from the date of publication of the protocol. The protocol on the results of February 12, 2018, declared public procurement of works on the facility invalid in the form of admission to participation of only one supplier, LLP "I". LLP "T" challenged in court the protocol on the results of the competition dated February 12, 2018. By the ruling of the specialized interdistrict economic Court of Kostanay region dated February 27, 2018, measures were taken to secure the claim in the form of suspension by the Institution of concluding contracts with potential suppliers based on the results of an electronic tender. On March 2, 2018, the Institution (the customer) and I LLP (the contractor) concluded contract No. 15 on public procurement of works using a single–source method (hereinafter referred to as the Contract). The total cost of the work is 549,920,000 tenge. The completion period is from May to September 2018, from May to August 2019. LLP "T" filed a lawsuit with the court to invalidate the Contract in connection with the unjustified rejection of its tender application and the admission to participate in the tender of LLP "I", which did not meet the qualification requirements, as well as the conclusion of the Contract during the period of the measures to secure the claim. Satisfying the application of LLP "T", the courts of the first and appellate instances came to the conclusion that the plaintiff's tender application was rejected unreasonably, since, if necessary, 3 on-board vehicles with a load capacity of up to 5 tons, LLP "T" indicated the presence of 1 car – up to 5 tons and 5 cars – over 5 tons, the tender application of LLP "And" was subject to rejection due to the failure to provide documents on ownership of 2 dredgers, the disputed contract was concluded during the period of action to secure the claim in the form of suspension of the conclusion of contracts based on the results of the public procurement tender.
These conclusions of the courts of first instance and appeal are unfounded, they are based on the incorrect application of substantive law. The case materials established that the tender application of "I" LLP met the qualification requirements, the availability of dredgers is confirmed by an inventory card. In addition, the authorized body of the State Institution "Department of Agriculture of the Akimat of Kostanay city" indicated that dredgers are not subject to registration. The conclusions of the courts on the conclusion of the contested contract during the period of the interim measures are not justified, since the previous civil cases in which these measures were taken were left without consideration or the proceedings on them were terminated. The potential supplier of T LLP, having submitted a competitive application for vehicles with a higher carrying capacity, did not coordinate the replacement of vehicles with the design organization. Also, the legality of the competition was checked by the Department of State Audit for Kostanay region and the execution of LLP "I" works in excess of 240,768,700 tenge was established. I LLP has now fulfilled its obligations under the concluded agreement in full and invalidation of the agreement contradicts the principles of optimal and efficient spending of budgetary funds used for public procurement. The above indicates that the courts of the first and appellate instances unreasonably invalidated the public procurement contract dated March 2, 2018 No. 15, concluded between the Institution and I LLP.
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