Design and Project Management Bids

On June 1 2009, Regulation 5A of the Mandatory Tenders Regulations, 5753-1993, took effect establishing three methods for engaging designers:

1. Engagements of up to NIS 1.5 million will be made by selection from the designer pool, based on quality criteria alone.
2. Engagements of NIS 1.5 million to NIS 3 million, or for projects of undefined scope, will be made through a “competitive procedure” for receiving proposals (a restricted bid), with a weighting of 80% for quality and 20% for price.
3. Engagements of NIS 3 million or more will be made through an open public bid, with a weighting of 80% for quality and 20% for price.

The regulation also provides that, where at least five bids are submitted, bids deviating by more than 15% from the median price will be disqualified, provided that at least half the valid bids are disqualified.

As the main advocate in the campaign to change the bidding system, the IOCEA’s extensive efforts brought about the amendment of the regulation. It regards the principle of weighting selection of 80% for quality and 20% for price as being of the utmost importance to Israel’s public sector. It therefore continues to act against design, management, and supervision bids that do not comply with the principles set out in the regulation.

At the same time, the organization is working to abolish the requirement to submit bid bonds in government bids and to reduce the amount of performance bonds.

Following ongoing discussions with Ministry of Finance officials, the Accountant General issued a temporary directive in 2009, under which bid bonds were abolished for projects of up to NIS 300,000, and performance bonds were reduced to 5% of the contract value. The organization does not consider this sufficient. It continues to work for the complete abolition of bid bonds and for bringing the temporary directive fully into line with the spirit of Regulation 5A.