On challenging the results of public procurement and on the obligation to eliminate violations by reviewing the results of the competition

No.6001-23-00-6ap/279 dated 07/27/2023

Plaintiff: SG LTD LLP

Respondent: State Institution "Public Procurement Department"

Interested parties: RSU "Treasury Committee of the Ministry of Finance of the Republic of Kazakhstan", RSU "Department of Internal State Audit for Pavlodar region of the Committee of Internal State Audit of the Ministry of Finance of the Republic of Kazakhstan", JSC "CEF", LLP "K".

The subject of the dispute: on challenging the results of public procurement and on the obligation to eliminate violations by reviewing the results of the competition

Review on cassation of the interested party of LLP "K".

PLOT: According to the complaints of the defendant UGZ, According to the results of the competition dated May 18, 2022 "Construction of a water pipeline to the village", LLP "K" was determined the winner.

The work experience of SG LTD LLP in similar works, contained in the electronic depository, was not taken into account by the competition commission due to their receipt through reorganization from other legal entities.

Disagreeing with the results of the results of the competition, SG LTD LLP appealed them in court.

Judicial acts:

1st instance: the claim is satisfied.

Appeal: the decision remains unchanged.

Cassation: judicial acts are cancelled, the claim is denied.

Conclusions: The courts, satisfying the claim, proceeded from the fact that the competition commission had no grounds for refusing to assign conditional discounts on work experience obtained through the reorganization (merger, affiliation) of the plaintiff. Appendix 5 to the tender documentation states that information about the availability of experience is confirmed according to the documents in the electronic depository.

The plaintiff's work experience documents were conducted and verified by the authorized body, the Treasury Committee. However, such conclusions of the courts do not correspond to the circumstances of the case. The courts did not take into account that on July 21, 2021, LLP "P" and LLP "M" joined LLP "KDEU".

On July 27, 2021, KDEU LLP was renamed SG LTD LLP. The works, the experience of which SG LTD LLP indicated as belonging to it, were performed by P LLP and M LLP before joining KDEU LLP. The Department found that the transferred experience in the electronic depository was simultaneously registered with SG LTD LLP, P LLP and M LLP.

In this regard, these information were blocked in the electronic depository after the contested results of the competition.

Representatives of the Department, the Department of Defense and the Treasury Committee confirmed this fact at a meeting of the judicial board. Moreover, by the decision of the Council of Economic and Social Council of October 16, 2019, LLP "M" was recognized as an unfair participant in public procurement. That is, the stated work experience of LLP "P" was obtained from LLP "M", which had the restrictions provided for in subparagraph 6) of paragraph 1 of Article 6 of the Law of the Republic of Kazakhstan "On Public Procurement" (hereinafter referred to as the Law).

According to article 4 of the Law, public procurement is based on principles, including: providing potential suppliers with equal opportunities to participate in the public procurement procedure, except in cases provided for by this Law; fair competition among potential suppliers, and avoiding collusion between procurement participants.

Within the meaning of parts 4-7 of Article 8 of the Civil Code of the Republic of Kazakhstan, legal entities must act in good faith, reasonably and fairly in exercising their rights, observing the requirements contained in the legislation, the moral principles of society, and entrepreneurs, as well as the rules of business ethics. Actions of legal entities aimed at harming another person, abuse of the right in other forms, as well as the exercise of the right in contradiction with its purpose are not allowed. No one has the right to take advantage of their unscrupulous behavior.

In case of non-compliance with these requirements, the court may refuse to protect the person's right.

The above circumstances of the case indicate that the actions of SG LTD LLP violate principles in the field of public procurement, as well as abuse of law, which is the legal basis for the court to deny him judicial protection.

Representatives of the Department also explained that when determining the winner of the competition, only the own experience of K LLP was taken into account.

 

 

 

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