clr/1989/1989_3A_829.pdf

(1989)addressesol Counsel. In accordance with the terms ol imitation to submit tendcis loi the construction of the PaphosGeneral Hospital thetenderers should deh\er two envelopes, theone. marked A. containing thedeclaration ot interest and the other, maiked Ji. containing itemized financial demands and particulars 5 In Mituc ol paiagiaph 6 oi the relevant document, headed "selection" the declarations ohntercst would be c\aluateci and a limited \Q number of tenderers would be pre-selccted and it is only in respect ot those that theenvelopes containing the ΙιηαηααΙ demandswould beopen lor linul selection. Notwithstanding the above term the tender was tinally awarded to }5 the interested partx who had not been pre-selccted Inannulling the sub judicc decision by reason ol the contravention ot the said material condition and tor lack ot due reasoning, the Court slated that it has "to .sateguard the confidence ol the citizen in the Administration "Hie Administration has to act in such a way as to protect the taith ol the 2 0 people in the Government ol the countiy" Sub judice decisionannulled .\'o ordet ;b to cosfs- 25 Cases relerred to X'ledconConstruction and Otheis \ Republic Mmistei ot hmancc and Othcrs(l96S)3CLR 535. 30 George I) Kounnas and Sons Ltd and -\nothci \ Republic (C\prus Potato Matkenng Hoard)

(1972)3 CI R >42. Κ & Μ Transport & Co Ltd and Others v. htena Iortigon Altokmiton (EFA) and Others

(1987)3 C L.R. 1919 35 Recourse. Recourse against the decision of the respondents whereby the tender for the preparation of the architectural plan* and 40 other studies for the construction ol the Paphos General Hospital was awarded totheinterested part\ inpreference and S30 3 C.L.R. .

1. & A.Philippou v.Republic &Others instead of the applicants. L Qehdes. lor the Applicants. 5 S. Georghiades.Senior Counsel of the Republic, for the Respondents. Ol.Talianos, for the Interested party. 10 Cur. adv. vult. STYLIANIDES, J. read the following judgment. The applicants bymeans ofthis recourse seek the annulment of the decision of the respondents, whereby the tender for the 15 preparation of the architectural plans and other studies for the construction of the Paphos General Hospital was awarded to Messrs. Laghoudis & Charafambous (architects of Limassol), (interested party), in preference and instead of the applicants. 20 The applicants on the day of the tiling of this recourse took out asummons, whereby they applied for a provisional order restraining the defendants and/or any of them from implementing the challenged decision, pending the final determination of the recourse. 25 In the meantime, however, a written contact was entered between the Government of the Republic and the interested party. 30 Thefirst point that arises istheaffectation ofthiscontact on the fate ol the recourse. The power and duty of this Court, under Article 146of the Constitution, is to review the sub judice decision, i.e. to 35 ascertain the legality of the administrative act. The subject of the examination is the decision to ward the tender to the interested party and not thecontract granted asaresult of such decision,which isinthe domain of Private Law and outside the Revisional Jurisdiction of this Court. 40 In Case No. 531/1949 of the Greek Council of State,
2. vol.2,p.13,the Full Bench oftheGreek Council ofState at p.14 831 Stylianides, J. J-&A. Philippou v.Republic &Others

(1989)said:"...καιαντυχόνεπηκολούθησενημετάτου προκριθέντος μειοδότου κατάρτισιςτηςσχετικής διοικητικής συμβάσε­ ως. η υπόστασιςτης οποίαςείναι ανεξάρτητοςτης περί 5 τουκύρουςτηςδημοπρασίαςκρίσεως." (See; also. Medcon Construction and Others v. Republic Minister of Finance and Others) (196S) 3 C.L.R. 535, at p.545 and GeorgeD. Kounnas and Sons Ltd. and Another 10 v. Republic (Cvprus Potato Marketing Board)

(1972)3 C.L.R.542.). Thesalient facts of thecase are as follows:15 The Council of Ministers on 8th December. 19S3, after submission madeby theMinisterof Health, by Decision23.934 authorised the Ministry ofHealth:(a)To invite tenders from Cyprus architectural firms for 20 declaration of interest for the preparation of architectural plans and studies, for the construction of thenew General Hospital ofPaphos. (b)To set upa Committeecomposed of representatives of 25 the Ministries of Health. Communications and Works and the Planning Bureau, which would undertake the evaluation of thearchitectural firms, thepre-selection of the most suitable, and the preparation of the relevant report. (c)To set up a Committee composed of the Ministers of Health, Communications and Works and Finance, to consider the report referred to above and proceed with the final selection of the firm, without reference of the 35 matter again totheCouncil of Ministers. (See Appendix A.) Pursuant to the above, the particulars for the invitation of 40 tenders were prepared and embodied in Document Y.Y.398/S3/A, headed ''Architectural and other studies for the 832 30 3 C.L.R. J. &A. Philippou v. Republic &Others Stylianides, J. new Paphos General Hospital" -("Αρχιτεκτονικές καιάλλες μελέτες γιατονέο Γενικό ΝοσοκομείοΠάφου") -(Appendix Β totheopposition). 5 On13thJanuary, 19S4,by publicationintheOfficial Gazette of the Republic, under Notification 77, and in the local press, invitations weremadefor declaration of interest andtendersby architects for the new Paphos Hospital. This advertisement invited thesuitably qualified registered Cypriot architects,who 10 were interested, to submit to the Ministry of Health two documents: Declarationof Interestandrelevant Tender.In this Notification it was stated that adocument which containedall the relevant particulars on the subject and the terms and conditionswas availableattheMinistry of Healthfor everyone 15 concerned -("Έγγραφο πουπεριέχειόλες τις σχετικές μετο θέμαλεπτομέρειεςκαθώςκαιτουςόρουςείναιδιαθέσιμοστο Υπουργείο Υγείας γιαοποιοδήποτεενδιαφέρεται"). According tothepublication,thedeclaration of interestand 20 therelevant tendershould have reached the Ministry by 10.00 a.m.of the4th Febaiary, 1984.The date was later extended to 11th February, 1984. The document referred to in the invitation is circular 25 YY.39S/83/A. to which reference was made. This document gives details in paragraph 5, p.10, of the contents of the declaration of interest, which should be placed in a separate envelope marked "A". This envelope should not contain any financial demandsasfees,etc.Inaseparate envelope - marked 30 "B" -the tender, containing itemized financial demands and particulars as per paragraph 5

(2),should be placed. Paragraph 6 headed "Selection" provides that the declaration of interest wouldbeevaluated andalimitednumber 35 of interested tenderers will be selected, whoseenvelopes with the financial demands will then be opened for the final selection:- "ό.Επιλονή 40

(1)Οι δηλώσεις ενδιαφέροντοςθα αξιολογηθούν καιθα επιλεγεί περιορισμένος αριθμόςενδιαφερομένωντων 833 Stylianides, J. J. & A. Philippou v. Republic &Others

(1989)οποίων θα ανοιχθούν οι φάκελοι με τις οικονομικές απαιτήσεις γιατελικήεπιλογή. ΤοΥπουργείο Υγείας δεθαείναιυπόχρεοναδεχθεί τη χαμηλότερηήοποιαδήποτεπροσφορά. 5

(2)ΟΑρχιτέκτοναςπουθαεπιλεγεί θακληθείνα υπογρά­ ψει σχετικήδεσμευτική συμφωνία." A number of architects showed interest and ISdeclarations of interest andtenders weresubmitted. 10 The Committee, before opening any of the envelopes of declarations of interest, set down the procedure for the evaluation and the criteria of evaluation and appraisal. {See Appendix "Γ"). 15 The Committee opened the envelopes "A" and considered and evaluated the declarations of interest. Their report, dated 25th February. 19S

1. marked "Confidential" is Appendix "E". They pre-selected. according to paragraph 5 of the document 20 Y.Y. 39S/S3/A.as set out intheir Report,thefollowing:
2. I.&A. Philippou (theapplicants).
3. S. Economou & Associates,
4. P.Georghiades & Associates.
5. Ph.Colakkides &Associates. 25 Thereafter, the Committee opened the envelopes "B" containing the tenders; financial demands of the four pre­ selected architects or firms of architects. They presented the following picture:
6. I.&A. Philippou
7. P.Georghiades
8. S. Economou&Associates .
9. Colakkides &Associates .. . £270.025 £292.000 £294.S00 £372.627 30 35 The applicants and Colakkides lost marks in comparison with the other pre-selected. as they did not satisfy theterm to indicate aproject architect. The Report of the Committee was sent to the Minister of 834 40 3 C.L.R. J. &A. Philippou v.Republic &Others Stylianides, J. Health with accompanied letter, dated 27th February. 1984 Appendix "Δ" - paragraphs 4 and6of which read:5 10 15 "
10. Η Επιτροπή αποφάσισε ύπο>ς υποβάλει στην εξ Υπουργών Επιτροπήταπορίσματα της όπωςδιαλαμβά­ νονται στο προαναφερόμενο πρακτικό καιναπαρακαλέ­ σει την εξ Υπουργούν Επιτροπήνα προβεί,τοταχύτερο δυνατό, στην επιλογή του Αρχιτέκτονα για την εκτέλεση τηςεργασίας,ενόψει μάλιστα τουγεγονότοςότιταχρονικάπεριθώριαμέσασταοποία πρέπειναδιεκπεραιωθεί η όληεργασίαείναι περιορισμένα." "
11. Παρακαλώ όπως διευθετήσετε την σύγκληση συνε­ δρίας της εξ Υπουργών Επιτροπήςγια την επιλογή του Αρχιτέκτονα, αναφέρωδε σχετικάότι ταμέλητηςΤεχνι­ κής Επιτροπής είναιστηδιάθεσησαςκαιστηδιάθεση της εξ Υπουργών Επιτροπήςγια την παροχή οποιωνδήποτε προσθέτιονστοιχείων ή πληροφοριών.'* 20 On7th March, 19S4.theDirectorGenera!of the Ministryof Health requested applicants to clarify a certain part of their tenderwhich related totheeventuality of extension of thetime limit for the completion of the works for a period over thirty monthsandtheapplicantscompliedwith therequest,bymeans 25 of theirlettersent on thefollowing day -8th March.
12. On I5th March. I9S
13. the Minister of Health, relating to sub-paragraph (d)of theDecision23.934- 8th December. 1983 informed the Council of Ministers that the Ministerial 30 Committee,mentionedintheaforesaid paragraph,decidedthat the final selection of thearchitect willbe doneaccording tothe ordinary procedures of award of tenders. On26th April, 1984.theMinisterial CommitteeforTenders. 35 composedoftheMinisters of Finance.Justice, Communications and Works and Health, decided to award the tender to the interested party on the terms andconditions mentioned inthe letter of the Chairman of the Tender Board, File No. T.283/56/52.dated26th April, 1984 -(see T.2S3/56/57). 40 Theletter T.283/56/52.dated 26th April. 1984,addressed to the DirectorGeneralof theMinistry of Health,by oronbehalf S35 St\lianides, J. J. & A.Philippou v.Republic & Others

(1989)oftheChairmanoftheTenderBoard,referstotheawardotthe tender to the interested party at a total fee ot £191.378-,on twoconditions:(a)To name a project architect, two preterably should be 5 one ot the partners, or one of equivalent qualifications and experience to the satisfaction of the appropriate Technical Committee (b)Togivedetailswhichwillbeconsideredsatisfactory with 10 regardtotheextent otco-operation andparticipation ot foreign experts - consultants associates ot them - in every stage of thework. Very'promptly,on2SthApril,19S4,theDirectorGeneralot 15 the Ministry communicated this decision ot the Ministerial Committee tothe interested pan -(seeExhibitY) The applicants took knowledge ot this award and in atew daysthisrecourse wasensued 20 Counsel for the Respondents submitted that the applicants lack legitimate interest to challenge thesubjudice decision in that25 (a)Theytailedto nameaproject architect,and (b)They were allowed to complete their tender alter the expiration of the time for submission - (letters) ot 7th March. 1984,bytheDirector General otthe Ministryot 30 Health and8th March, 1984,bytheapplicants) Boththetenderoftheapplicantsandtheinterestedpartvdid not nameaproject architect. 35 The Technical Committee, which evaluated the tenders, reduced the marks ot the applicants,but did not consider this failure wasmaterial soastoinvalidatethetender The Ministerial Committee awarded the tender to the 40 interested party on condition thatthey wouldcompK withthis requirement So, this was not considered, either by the 836 3 C.L.R. J. &A.Philippou v.Republic &Others Stylianides, J. Technical Committee,orbytheMinisterial Committee atany stage as invalidating the tender. The Respondents cannot approbate andreprobate. 5 Furthermore,theAdministration cannottreatdifferently the tenders oftheapplicants andtheinterested party,inamanner inconsistent withtheprinciplesoffree competion andwiththe right to equality of treatment, which issafeguarded byArticle 28.1ofour Constitution. 10 The second ground, on whichthissubmission wasbased,is the fact that the applicants wrote an explanatory note to the Ministry of Health,clarifying their position in the eventuality of extension ofthetimelimitfor thecompletion of theworks 15 for aperiod overthirty months.This,innoway,amounted to a counter proposal or any alteration or modification of the tenderitself. Thesubmission thattheapplicantslacklegitimateinterestis 20 withoutanymerit. The procedure andtheterms andconditionsgoverning the invitation of these tenders up to the final selection of the architect and the award of the tender were set down with 25 particularity in the documents to which reference was made earlieron inthisJudgment.Thetendersweresubmitted onthe basisofthecontentsthereof. The final selection would be made out of the four tenders 30 preselected by the Technical Committee, after opening both envelopes A and B.The evaluation and appraisal of the four should have been made before the opening of the second envelope,containingthefinancial aspect ofthetender. 35 The Committee complied with. Four tenderers were preselected and the Council of Ministers agreed that the Ministerial Committee for Tenders had to make the final selection. 40 The report of the Technical Committee is detailed and reasoned. The Committee itself followed and applied the procedure setdown. 837 Stylianides, J. J. &A. Philippou v. Republic &Others

(1989)TheMinisterial Committeeactedcontrary toparagraph 6 in awarding thetendertoafirm which was notpre-selected bythe Evaluation Committee. It was submitted by counsel for the Respondent that, after 5 taking into consideration the amount of fees - that is the content of envelope "B" -the interested party was actually preferred. This isacomplete violation of thecontentsof thedocument, 10 on thebasis of which thetenders were invited andsubmitted. The Greek Council of State in Case No.531/49(supra)said at p.14:15 "Επειδή η διακήρυξις των πάσης φύσεως δημοσίου συμφέροντος δημοπρασιών,αποτελεί πράξινκανονιστι­ κού περιεχομένου, η παοάβασις των όρων της οποίας, ιδίαωνεξαυτώνυπόχαρακτήραουσιώδη τεθειμένων, συ­ νεπάγεται ακυρότητα τηςδημοπρασίας,..." 20 In Case No.668/74, thesame Greek Council of Statesaid:"1. -Ηδιακήρυξιςτης δημοπρασίαςσυνιστά το νομικόν αυτής πλαίσιον, δεσμεΰουσα τόσον την επί του δια- 25 γωνισμού δημοσίαν αρχήν όσον και τους διαγωνιζομέ­ νους,ηδε παράβασις τωνουσιωδών διατάξεωντης, ήτοι τωναποβλέπουσαςειςτηνουσια')δη εξυπηρέτησιντου διά τηςδημοπρασίας επιδκοκομένουσκοπού, άγειεις ακυρό­ τητατου αποτελέσματοςτηςδημοπρασίας καιτων σχετι- 30 κών εγκριτικώνπράξεων." In Κ.& Μ. Transport & Co. Ltd. and Others v.Eteria Fortigon Aftokiniton (EFA) and Others

(1987)3 C.L.R. 1939, theFull Bench said:- 35 "The principle emerging from the caselaw is that strict adherence to the terms of a condition of the tender is directly dependent on themateriality of theterm: aterm is essential if consequential for the decision or its observance 40 is necessary for the sustenance of the efficacy of the administrative process." 838 3 C.L.R. J. &A.Philippou v.Repuhiic &Others Stylianides, J. In Case No. 1828/67 the Greek Council of State said at p.2082:5 "Επειδήη διακήρυξιςδημοπρασίας είναιπράξιςκανονιστικού χαρακτήρος, κατ'ακολουθίανηπαράβασις ου, σιώδουςόρουαυτήςσυνιστάπαράβασιννόμου." Paragraph 6, governing selection ("επιλογή") is very material asit affects thedecision reached. The non-compliance 10 by theAdministration with the termorformality relating to the selection affected theguarantees set up for the legality of the act. In a low tone it was submitted that the public saved 15 £80,000.- by thesubjudice decision. Ihave not theslightest doubt thattheRespondents actedin all good faith andin an effort to save public funds, but where good and proper administration and the Rule of Law are 20 concerned, the end can never justify the means, however worthwhile such endmay be. Paragraph 6 of Document Y.Y.398/83/A is very material. We have to safeguard the confidence of the citizen in the 25 administration.Theadministration has to act in such away as to protect the faith of the people in the government of the country. The sub judice decision was taken in circumstances 30 amounting to abuse and/or excess of power, contrary to the rules of good andproper administration. A public authority is under a duty in selecting a tender to state theirreasons for such award, which are subject to judicial 35 review. On the material before me Ihave come to the conclusion that, in the circumstances of the present case, the sub judice decision is lacking any or duereasoning. 40 The reasoning cannot be supplemented by the address of counsel. Ithas,eithertobe recordedinthesub judice decision, 839 Stylianides,J. J. &A. Philippou v.Republic& Others

(1989)ortoemergefrom thematerialinthefile. Thesubjudicedecisionwillbeannulled,also,forlackofdue reasoning. 5 In the result, the decision to award the tender to the interested partyisherebyannulled. Lettherebenoorder astocosts. 10 Subjudice decision annulled. No orderas to costs. 840