On May 16th, 1993, the Tender Obligation Act came into force and regulations were put in place for its implementation. Throughout the entire legislation process, the IOCEA has been hard at work, simultaneously preparing position papers and meeting with officials from the Ministry of Finances, other ministers and Knesset members, all of which had finally and successfully brought about the issuance of section 5a to this act.
This section releases government departments from the tender obligation when commissioning the execution of a professional work (that requires special knowledge and expertise) in the fields of planning, design, engineering and architecture, setting a clear and defined quality bar for the commissioner.
Sixteen years later, on June 1st, 2009, IOCEA was able to reach yet another achievement, when regulation 5a came into force.
As part of the regulation, different business binders with planners were defined:
- A binder of up to 1.5 million NIS would be conducted by selecting from the planners registry, by parameters of quality only.
- A binder of 1.5 to 3 million NIS, or an undefined project, will be conducted by way of 'competitive call' for offers (a closed tender), giving the quality component 80% and the price component 20% of the consideration.
- A binder of 3 million NIS or more will be conducted by way of a public tender, giving the quality component 80% and the price component 20% of the consideration.
It was further decided that offers that exceed the median by 15% or more (where at least 5 offers were submitted), will be rejected, provided however that half of the valid offers submitted in that tender were not rejected.
In a memorandum signed on June 2009 between the Economic Associations Forum (among whom are LAHAV and the General Federation of Laborers [the Histadrut]) and the Ministry of Finances, a clause was assimilated stipulating that the Tender Obligation Act (and all its regulations and injunctions) shall apply in the same manner to all state companies, Israeli local authorities and all the economic companies under their control.
A relevant bill was prepared by Adv. Avraham Poraz (who was retained by IOCEA) and is currently being put before the Knesset for its consideration.
The Significance of this Achievement
The more entities and authorities this regulation applies to, the fewer the tenders with the issue of price at their core, allowing quality of execution to become the main consideration.
It is safe to say that even now, unlike past situations (which could be clearly seen in the Natbag 2000 project, Israel Railway and Ashdod Port), tenders based on the lowest wages are all but gone from among the reservoir of tenders published by public and state entities.