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Principal Legal Positions

4th General Session held on April 16th 2014, Principal Legal Position no. 17 regarding Article 106 Paragraph 1 Point 5 of Public Procurement Law

Fact that bidder has not signed the last page of the model of the contract that is a constituent part of a bid, if this is prescribed by tender documents, presents the reason to reject the bid as unacceptable in accordance with the Article 106 Paragraph 1 Point 5 of Public Procurement Law, as signing of the model of the contract represents consent of the bidder with the contents (elements) of the contract that contracting authority would conclude with the chosen bidder, and intent of the bidder to really conclude such a contract in case his bid gets chosen as the most favorable one, without possibility to additionally demand changes of certain elements of the public procurement contract. If the obligation to sign the last page of model of the contract as a constituent part of a bid is not prescribed in tender documents, the contracting authority will, before initiating the expert evaluation of bids in accordance with the Article 93 Paragraph 1 of Public Procurement Law, request the bidders that have not signed the last page of the model of the contract to state whether or not they completely agree with the model of the contract and whether or not they accept to conclude the contract in accordance with the model of it in case they are awarded the contract. Explanation:

Article 3 Paragraph 1 Point 2 of Public Procurement Law ("Official Gazette of Republic of Serbia" no. 124/12; hereinafter: PPL) defines public procurement contract as binding contract concluded in written or electronic form between contracting authority and bidder, in accordance with conducted public procurement procedure whose subject is provision of goods, services or performing of works.

Article 3 Paragraph 1 Point 33 of PPL prescribes that the acceptable bid is the one that is timely, not rejected due to the significant deficiencies, adequate, not restricting or conditioning rights of contracting authority or responsibilities of a bidder and does not exceed the estimated value of the public procurement.

Article 61 Paragraph 1 of PPL prescribes that contracting authority is obliged to prepare tender documents in such a way that bidders may prepare acceptable bid based upon tender documents, whereas Paragraph 4 Point 4 of the same Article prescribes that tender documents depending of the type of procedure and subject of public procurement should also contain model of the contract.

Regulation on Mandatory Elements of Tender Documents in Public Procurement Procedures and Way to Prove Fulfilment of Requirements ("Official Gazette of Republic of Serbia" no. 29/2013 and 104/2013; hereinafter: Regulation), prescribes model of the contract as a mandatory element of every set of tender documents, except when negotiated procedure is being conducted or in case loan is being procured as a financial service, and then tender documents contain credit request of contracting authority based upon which bidder submits the model of the contract.

Article 93 Paragraph 1 of PPL prescribes that contracting authority may request additional explanation from the bidder that would help contracting authority examine, evaluate and compare bids, and also contracting authority may conduct control (inspection) with the bidder, i.e. manufacturer whose products bidder offers.

Article 106 Paragraph 1 Point 5 of PPL defines important deficiencies of a bid that compel contracting authority to reject a bid, if it contains other deficiencies that make it impossible to establish the actual contents of the bid or compare it with other bids.

Provision of the Article 107 Paragraph 1 of PPL prescribes the obligation of contracting authority to reject all unacceptable bids once all of the bids are examined and evaluated.

In accordance with the quoted provisions of PPL and Regulation, model of the contract represents constituent part of tender documents, and with it contracting authority defines the subject of the contract, as well as all of the documents that are constituent part of public procurement contract (for example, offer, technical specifications etc.). Model of the contract contains total price of the goods, works or services procured, and it states all of the elements creating the price, whether or not the price is fixed, as well as ways and conditions to change the price in accordance with the objective reasons defined in tender documents, or provided for in separate regulations. Further on, model of the contract defines the obligations of the parties to the contract, such as duties of the bidder regarding the subject of the public procurement in question (for example, delivery deadline, validity period for the warranty, obligations of the bidder during that period etc.), obligations of the bidder in case he fails to fulfil his contractual responsibilities within the set deadline, obligations regarding delivery of financial guarantee concerning contractual responsibilities etc. Model of the contract also defines the responsibilities of a contracting authority regarding ways and conditions of payment of the agreed price to the chosen bidder, place for and way to complete works or deliver goods, duties of parties to the contract at takeover, rights of the parties to the contract in case of its termination, ways in which parties to the contract would solve the issues not regulated by the contract, ways to solve disputes between parties to the contract etc.

When it comes to the contents of a bid, it should be taken into consideration that bid has to be complete, clear, precise, which means that on one hand, contents of a bid have to include all important elements of the contract that contracting authority will conclude with chosen bidder, i.e. bid has to contain all important elements of a contract. These elements are necessary for type of contract in question, as they make its essence, and therefore have to be included in bid, as they ask for consent of both contracting authority and bidder. On the other hand, the contents of the bid have to enable contracting authority to reliably establish that the bid submission is aimed at concluding of the contract, and not at negotiations about certain elements of the contract, and also that the bid does not contain the provisions which gives bidder a right to a certain reserve regarding some elements of public procurement contract. In other words, a bid has to include serious intention of the bidder to conclude the contract of specific content.

Bearing in mind the above mentioned, signing of the last page of a model of a contract, in accordance with the request of contracting authority from tender documents, presents consent of a bidder with the contents of a contract that will be concluded with chosen bidder and expresses the intent to really conclude the contract if the bid gets chosen as the most favorable one, without possibility to further demand change of certain elements of public procurement contract.

Therefore, in accordance with quoted provision of PPL, contracting authority is obliged to reject as unacceptable a bid of a bidder that failed to sign the last page of a model of a contract, if that was prescribed by tender documents, as such bid contains deficiencies which make it impossible to establish its real contents, i.e. contains serious deficiencies as described in Article 106 Paragraph 1 Point 5 of PPL.

With regards to the above mentioned, if contracting authority failed to prescribe the obligation of bidders to sign the last page of a model of a contract, their bids cannot be evaluated as unacceptable in the evaluation of bids phase, but it is necessary, in accordance with Article 93 Paragraph 1 of PPL and before the bids are evaluated, to invite bidders who failed to sign the last page of model of a contract to clearly and explicitly state that they consent to conclude the contract which is completely in accordance with the model of contract from tender documents, in case they get awarded the contract after the expert evaluation of bids is conducted.

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Principal Legal Positions

If certain constituent parts of a bid do not contain some of the data bidder was obliged to supply in the bid, in accordance with the requests of contracting authority as stated in tender documents, contracting authority cannot reject such bid due to the serious deficiencies if bidder provided requested data in some other part of the bid, which enables contracting authority to establish actual contents of the bid with regards to the Article 106 Paragraph 1 Point 5 of Public Procurement Law. Explanation:

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Fact that bidder has not signed the last page of the model of the contract that is a constituent part of a bid, if this is prescribed by tender documents, presents the reason to reject the bid as unacceptable in accordance with the Article 106 Paragraph 1 Point 5 of Public Procurement Law, as signing of the model of the contract represents consent of the bidder with the contents (elements) of the contract that contracting authority would conclude with the chosen bidder, and intent of the bidder to really conclude such a contract in case his bid gets chosen as the most favorable one, without possibility to additionally demand changes of certain elements of the public procurement contract. If the obligation to sign the last page of model of the contract as a constituent part of a bid is not prescribed in tender documents, the contracting authority will, before initiating the expert evaluation of bids in accordance with the Article 93 Paragraph 1 of Public Procurement Law, request the bidders that have not signed the last page of the model of the contract to state whether or not they completely agree with the model of the contract and whether or not they accept to conclude the contract in accordance with the model of it in case they are awarded the contract. Explanation:

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If several bidders in public procurement procedure undoubtedly offer identical goods of the same manufacturer, and only one of them submits the proof of domestic origin of the said goods, contracting authority is not obliged to act in accordance with Article 86 Paragraph 9 of Public Procurement Law and to ask the rest of the bidders to submit evidence of domestic origin of the goods they are offering, but it will be deemed that all of the bidders have offered goods of domestic origin. Explanation:

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