I. Formulation of the problem
Bidding has become an important way to carry out daily economic activities, and many units choose to purchase and choose partners through bidding. However, in practice, after the tendering unit issues the tender announcement, the tendering activity may be terminated for various reasons. So, under the current laws and regulations of our country and in our judicial practice, what are the legal consequences of terminating the bidding? How should the tendering unit grasp the correct posture of terminating the bidding, so as to reduce the legal risk of terminating the bidding?
2. Legal consequences of terminating the bidding
1) Return the bid bond and its interest.
According to the provisions of Article 31 of the Regulations for the Implementation of the Tendering and Bidding Law, "the tenderer terminates the bidding ......."The tenderer shall promptly refund the fees collected for the prequalification documents and bidding documents, as well as the bid deposit and bank deposit interest for the same period.
Therefore, one of the legal consequences of terminating the bidding is that the tendering unit returns the bidding deposit and bank deposit interest for the same period to the bidder.
2) Compensation for losses.
According to the provisions of Article 73 of the Regulations for the Implementation of the Tendering and Bidding Law, for projects that must be tendered in accordance with the law, the tendering unit "does not issue a notice of winning the bid without a legitimate reason"; "Failure to determine the winning bidder in accordance with the regulations"; "Do not conclude a contract with the winning bidder without justifiable reasons", "If you cause losses to others, you shall be liable for compensation in accordance with the law".
After the termination of the tender, it will generally have the effect that the winning bidder cannot be determined and the contract cannot be concluded. In accordance with the foregoing provisions, if it is a project that must be tendered, after the termination of the bidding, the tendering unit shall bear the legal consequences of compensating for losses.
c) Fines. According to Article 73 of the Regulations for the Implementation of the Tendering and Bidding Law, for projects that must be tendered in accordance with the law, the tendering unit "does not issue a notice of winning the bid without justifiable reasons"; "Failure to determine the winning bidder in accordance with the regulations"; "Do not conclude a contract with the winning bidder without justifiable reasons", "The relevant administrative supervision department shall order corrections, and may impose a fine of less than 10 of the amount of the winning project".
After the termination of the tender, it will generally have the effect that the winning bidder cannot be determined and the contract cannot be concluded. According to the foregoing, if it is a project that must be tendered, after the termination of the bidding, the tendering unit shall bear the legal consequences of the fine.
In addition, relevant provisions have also been made in the laws and regulations related to bidding in special fields, such as the Measures for the Bidding and Bidding of Goods for Engineering Construction Projects, the Administrative Measures for the Bidding and Bidding of Railway Engineering Construction Projects, and the Administrative Measures for the Bidding and Bidding of Communication Engineering Construction Projects. For example, Article 58 of the Measures for the Bidding and Bidding of Goods for Engineering Construction Projects stipulates that "if the tenderer of a project that must be tendered in accordance with the law does not issue a notice of winning the bid without a legitimate reason, the relevant administrative supervision department shall order it to make corrections and may impose a fine of less than 10/1000 of the amount of the winning project; The directly responsible managers and other directly responsible personnel of the unit are to be given sanctions in accordance with law. Article 56, Paragraph 2, Item 5 of the Administrative Measures for Bidding and Bidding of Railway Engineering Construction Projects stipulates that "if the bidding activities are terminated without authorization, or the relevant potential bidders are not informed of the bidding after the termination of the bidding", "the administrative supervision department for the bidding and bidding of railway engineering construction projects shall order corrections and give warnings; where the circumstances are serious, a fine of up to 30,000 yuan may be imposed concurrently." Article 44 of the Administrative Measures for Bidding and Bidding of Communication Engineering Construction Projects stipulates that "if the tenderer terminates the bidding without justifiable reasons after issuing the bidding announcement, issuing the bidding invitation or selling the bidding documents or prequalification documents, the communications administrative supervision department shall give a warning and may impose a fine of not less than 10,000 yuan but not more than 30,000 yuan." ”
According to the foregoing provisions, if the tendering unit terminates the bidding, it needs to bear the legal consequences of being fined and punished by the administrative supervision department.
3. Legal Advice
Although the termination of the tender may face a series of legal risks, if the correct posture of terminating the tender can be grasped, the probability of the risk occurring can be relatively reduced, or the risk can be reduced. The following legal suggestions are for the reference of the tendering unit.
a) Try to avoid terminating the bidding.
As mentioned above, once the termination of the bidding (except for legitimate reasons) will bring more serious legal consequences to the tendering unit, including the return of the bid deposit and its interest, compensation for losses, fines, etc. It is recommended that the tendering unit pay full attention to the preparation of the bidding and try to avoid the situation that the bidding has to be terminated due to its own reasons.
B) the bidding documents for the tendering unit to terminate the bidding circumstances to make a clear agreement.
In order to deal with the loss of the tendering unit caused by the unexpected termination of the bidding, it is recommended that the tendering unit make a clear agreement on the circumstances under which the bidding can be terminated in the bidding documents.
In practice, in order to avoid the legal risk of terminating the bidding, the tendering unit often stipulates in the bidding documents that "the tenderer has the right to terminate the bidding procedure at any time and does not assume any liability arising from the termination of the bidding". The validity of such agreements is currently debatable. In order to avoid the loss caused by the termination of the bidding to the tendering unit, and at the same time try to strive for the termination of the bidding exemption agreement to be found invalid by the judicial authority, it is recommended that the tendering unit in the bidding documents for the tendering unit to terminate the bidding circumstances to make a clear agreement. Such agreements shall be specific and shall conform to the principle of fairness as much as possible, and shall be specially reminded to bidders by bolding, enlarging, etc.
3) Timely performance of notification obligations after the termination of bidding.
After the termination of the bidding, the tendering unit shall timely fulfill the notification obligation and inform the bidder that there is no need to continue to prepare for the bidding. Those who fail to perform their notification obligations may be found by the court to be in violation of the principle of good faith when involved in litigation, and then be required to bear responsibility. For example, in the case of a contract dispute between Eight Metallurgical Construction Group and BAIC Jiaqing (Chongqing) New Energy Vehicle Technology *** (Case No.: [2018] Yu 0102 Min Chu No. 6685), the court held that "after collecting the plaintiff's bid deposit, the defendant failed to notify the plaintiff to participate in the bidding in accordance with the legal procedures, or to inform the plaintiff to terminate the bidding, which violated the principle of good faith that should be observed in civil and commercial activities, and therefore, the defendant should bear the liability for negligence in contracting." ”
It should be noted that the method of terminating the bidding may be different depending on the bidding method and the different stages of deciding to terminate the bidding. If the tender is terminated at the announcement stage, all potential bidders must be notified of the termination of the tender by way of the publication of a termination notice, as the announcement stage is open to unspecified potential bidders. If the tender is terminated after the invitation to bid is issued to the potential bidder, a notice of termination of the tender shall be issued in writing to all the potential bidders invited. If the bidding is terminated after the prequalification documents or bidding documents are sold, it is necessary to notify the potential bidders who have obtained the prequalification documents and bidding documents in writing in a timely manner to terminate the bidding. If the tender is terminated after the bid is opened, a notice of termination of the tender shall be issued to all bidders who submit the tender documents. If the bidding is terminated after the issuance of the notice of winning the bid, only a written notice of termination of the bidding shall be issued to the winning bidder. Of course, in practice, in order to avoid disputes, it is recommended that the tendering unit terminate the bidding at any stage, except for the above-mentioned "directional notice", as far as possible on the bidding platform to publish an announcement of termination of the bidding.
4) Timely return of the fees collected for prequalification documents and bidding documents, as well as the bid deposit and bank deposit interest for the same period.
According to the provisions of Article 31 of the Regulations for the Implementation of the Tendering and Bidding Law, "if the tenderer terminates the bidding, it shall issue an announcement in a timely manner, or notify the potential bidders who have been invited or have obtained the prequalification documents and bidding documents in writing." If the prequalification documents and bidding documents have been sold or the bid bond has been collected, the tenderer shall promptly return the fees collected for the prequalification documents and bidding documents, as well as the bid bond and bank deposit interest for the same period. ”
Therefore, after the termination of the bidding, the tendering unit shall promptly return the fees collected for the prequalification documents and bidding documents, as well as the bid deposit and bank deposit interest collected for the same period, so as to prevent the insured from filing a lawsuit and increasing the burden of litigation.
In addition, it should be noted that there may be special provisions in the specific bidding field regarding the time for returning the bid deposit and the interest on the bank's deposit for the same period. For example, the second paragraph of Article 29 of the Administrative Measures for the Bidding and Bidding of Procurement of Goods and Services stipulates that "the ...... of terminating the bidding."If the cost of the bidding documents or the bid bond has been collected, the purchaser or the procurement agency shall, within 5 working days after the termination of the procurement activities, return the fees collected for the bidding documents and the bid bond collected and the fruits generated in the bank. "In the course of practice, when the bidding is terminated, the tendering unit shall pay attention to the return of the bidding deposit within the time specified by relevant laws and regulations.
5) Negotiate with the bidder to terminate the handling of the follow-up matters of the bidding.
In practice, if the tendering unit and the bidder reach an agreement on the handling of the follow-up matters of the termination of the bidding, it may also be recognized by the judicial authority. For example, in the case of a contract dispute between Beijing Jingfa Bidding *** and China Railway Construction Engineering Group (Case No.: [2019] Jing 02 Min Zhong No. 3199), the project bidding agency Beijing Development Company issued the Notice of Suspension of Bidding according to the instructions of the tendering unit, notifying China Railway Company to suspend the bidding, and at the same time notifying the compensation and compensation plan for terminating the bidding, and China Railway Company replied that there was no objection. Later, due to the failure of Beijing Development Company to perform the relevant obligations, China Railway Company sued Beijing Development Company to return the bid bond and related expenses and losses, and pay the interest from November 27, 2013 to the date of payment based on 1 297 314 yuan (the tender deposit + the compensation and compensation for losses promised in the Notice of Suspension of Bidding [including the cost of returning the bidding documents and related materials]) according to the loan interest rate for the same period of the People's Bank of China. With regard to the claim for payment of interest, the court held that Beijing Development Company should pay corresponding interest as compensation for its long-term arrears of compensation and compensation. However, the above-mentioned sum consisted of a bid deposit of 800,000 yuan and a compensation of 497,314 yuan, and part of the interest was included in the compensation, and China Railway Company had not claimed its rights against Jingfa Company for a long time. Based on the principle of fairness, the court determined that the interest should be based on the principal of the tender deposit of 800,000 yuan, calculated according to the deposit interest rate of the People's Bank of China for the same period", and finally ruled that "Beijing Jingfa Bidding *** returned the deposit of 800,000 yuan and compensation of 497,314 yuan to China Railway Construction Engineering Group***, totaling 1,297,314 yuan; Within 15 days from the effective date of the judgment, Beijing Jingfa Tender*** shall pay interest calculated on the basis of 800,000 yuan to China Railway Construction Engineering Group***, which shall be calculated according to the deposit interest rate of the People's Bank of China for the same period from November 27, 2013 to the date of actual payment." To a certain extent, these judgments recognize the agreement reached between the tendering unit and the bidder on compensation and compensation for the termination of the bidding.
Based on the above-mentioned judicial practice experience, it is recommended that the tendering unit after the termination of the bidding, on the termination of the bidding follow-up matters to negotiate with the bidder, if you can reach an agreement with the bidder, to minimize the amount of compensation, compensation, can reduce the loss caused by the termination of the bidding to a certain extent.