Asked by Abigail Kooiker on May 01, 2024
Verified
A small municipality advertised a "call for tenders" to complete road construction in several newspapers. After the tender had been closed the job was not awarded to any of the prospective bidders. The municipality, on the recommendation of a neighbouring township contacted another firm and awarded it the contract on the basis of price and reputation. After learning of this development, the companies who had bid on the advertised tender joined forces and brought a suit against the municipality. They will be successful.
Call for Tenders
A formal invitation to suppliers to bid on supplying goods or services under specified conditions.
Prospective Bidders
Prospective bidders are individuals or entities that may be interested in submitting a bid or offer to acquire goods, services, or assets that are being offered.
- Analyze legal issues related to tender processes and the obligations of both offering and responding parties.
Verified Answer
ZK
Zybrea KnightMay 06, 2024
Final Answer :
False
Explanation :
The municipality is generally not obligated to award a contract to any bidder, even after a call for tenders, unless the tender documents specifically create such an obligation. The decision to award the contract to another firm based on price and reputation, without any indication of a breach of process or fairness, does not automatically result in a successful lawsuit by the original bidders.
Learning Objectives
- Analyze legal issues related to tender processes and the obligations of both offering and responding parties.
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