This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its April 2014 decision in Zephyr Services Limited v. Ministry of Fisheries and Sustainable Development, the Supreme Court of Belize found that the government improperly imposed hidden contract award criteria during contract award negotiations. The dispute dealt with a tendering process for environmental consulting services. The complainant was selected for contract award negotiations after scoring highest during the evaluation process. Those negotiations failed after the government imposed undisclosed requirements as a pre-condition of award, and then rescinded its selection based on purported budgetary constraints when those additional conditions were not met.
While the Court ruled that the government had the right to raise legitimate budgetary constraints, it did not have the right to impose new contractual conditions during contract negotiations. The Court found that the government failed to negotiate in good faith since it already had concerns that the top-scoring bid was over budget before it imposed additional contractual demands that would further increase the contract costs. The Court ruled that the government’s termination of negotiations breached the complainant’s legitimate expectation of award and ordered the government to either award the complainant a contract within the original budget limits or pay the complainant its lost profits for the failure to award that contract.
