The Ethiopian Civil Code emphasizes competitive tendering as a crucial method for concluding administrative contracts, ensuring transparency and optimal use of public funds.
Use of Allocation by Tender: Article 3147
Article 3147 – Use of such procedure. (1) Administrative contracts may be concluded by the procedure of allocation by tender. (2) They shall be concluded by such procedure, under pain of nullity, whenever the law imposes such obligation.
Subsection (1) indicates that ‘allocation by tender’ (public bidding) is a permissible method. However, Subsection (2) imposes a strict obligation: contracts ‘shall be concluded by such procedure, under pain of nullity, whenever the law imposes such obligation.’ This means that where specific legislation mandates competitive tendering (e.g., for contracts above a certain value), deviating from this procedure renders the contract null and void.
Public Notice of Allocation by Tender: Article 3148
Article 3148 – Notice of allocation by tender. – 1. Principle. The allocation which is to take place shall be notified to the public in the manner prescribed by administrative regulations or, in default of such the manner prescribed by administrative regulations or, in default of such regulations, in the manner which appears the most appropriate.
This article mandates public notification of tenders, ensuring potential bidders are aware of opportunities, fostering competition, and reducing corruption. Flexibility is allowed in the manner of notification if no specific regulations exist.
Contents of the Notice: Article 3149
Article 3149 – 2. Contents. The notice of allocation shall show: (a) the place where the specifications may be consulted; and (b) the authorities who are to proceed to the allocation; and (c) the time prescribed for sending in the tenders; and (d) the place, day and hour fixed for the allocation; and (e) the amount of security or the other guarantees required from the tenderers.
Article 3149 specifies five essential pieces of information that must be included in a public notice for allocation by tender: (a) Place for specifications: Where interested parties can obtain detailed requirements. (b) Authorities for allocation: Identification of the responsible administrative body. (c) Time for tenders: Deadline for bid submissions. (d) Place, day, and hour for allocation: Details for the public opening of tenders. (e) Security/guarantees: Financial requirements (e.g., bid bonds) for participation.
These requirements ensure comprehensive information for potential bidders, promoting a fair, competitive process and administrative accountability.
The Tender Process in Ethiopian Administrative Contracts
Introduction to the Tender Process
The allocation of administrative contracts in Ethiopia, particularly through the procedure of allocation by tender (public bidding), is governed by a detailed set of legal provisions designed to ensure transparency, fairness, and the optimal use of public funds. This chapter examines the intricacies of the tender process, from the initial public notice and the content of specifications to the submission and evaluation of bids, and the eventual designation of a successful tenderer. It also explores the critical aspects of contractual validity, including the concepts of ‘absence of cause’ and ‘unlawful cause,’ which serve as vital safeguards against improper administrative agreements.
Public Notice and Tender Specifications
The tendering process begins with a formal public announcement and detailed specifications to inform potential bidders.
Timeframe for Publication: Article 3150
Article 3150 – 3. Time. The notice of allocation shall be published, except in cases of urgency, not less than one month before the expiration of the time prescribed for sending in the tenders.
Article 3150 sets a minimum timeframe for the publication of the notice of allocation. It mandates that the notice be published ‘not less than one month before the expiration of the time prescribed for sending in the tenders,’ except in cases of urgency. This ensures potential tenderers have sufficient time to prepare and submit their bids, allowing for adequate time to review specifications, conduct necessary studies, prepare technical proposals, and secure any required guarantees. The ‘exception in cases of urgency’ provides flexibility for critical situations, though such exceptions are typically narrowly interpreted to prevent abuse and maintain the principle of ample preparation time for bidders.
Immutability of Specifications After Publication: Article 3151
Article 3151 – 4. Effect. As from the publication of the notice, no modification may be made to the specifications unless a new publication is made.
Article 3151 establishes a crucial principle for ensuring fairness and stability in the tender process. Once the notice has been published, ‘no modification may be made to the specifications unless a new publication is made.’ This prevents the administrative authority from unilaterally altering the terms or requirements of the tender after the initial public announcement without re-initiating the publication process. This rule ensures a level playing field and reinforces the transparency and integrity of the competitive bidding process, requiring any material changes to be communicated openly and uniformly to all potential participants through a formal republication.
Content of Specifications: Article 3152
Article 3152 – Specifications. (1) The specifications of the allocation shall contain an indication of the conditions required from tenderers. (2) The administrative authorities may impose in such specifications all the conditions relating to technical and professional qualifications which they consider desirable. (3) They shall specify, where appropriate, the qualifications which are required for admission to tender and the eliminating tests to which the projects or samples submitted will be subjected.
Article 3152 details the content requirements for the ‘specifications of the allocation.’
- Subsection (1) generally mandates an ‘indication of the conditions required from tenderers.’
- Subsection (2) grants significant discretion to administrative authorities, allowing them to ‘impose… all the conditions relating to technical and professional qualifications which they consider desirable.’ This permits the authority to define specific expertise, experience, or capabilities.
- Subsection (3) further specifies that the authority ‘shall specify, where appropriate, the qualifications which are required for admission to tender and the eliminating tests to which the projects or samples submitted will be subjected.’
This balances the authority’s need to select competent contractors with the bidders’ right to clear, predictable, and fair selection criteria.
Tender Submission and Formalities
The submission of tenders is a formal process with specific requirements to ensure integrity and fairness.
Documents to be Submitted: Article 3153
Article 3153 – Documents to be submitted. The contractors or suppliers who intend to present themselves as tenderers shall deposit in the place indicated and within the time specified by the specifications a declaration of their intention to tender and their tender.
Article 3153 sets forth the procedural requirement for tenderers: they ‘shall deposit in the place indicated and within the time specified by the specifications a declaration of their intention to tender and their tender.’ This underscores the formal and structured nature of the tender process, ensuring all necessary documents are submitted correctly and by the stipulated deadline.
Content of Declaration of Intention to Tender: Article 3154
Article 3154 – Declaration of intention to tender. (1) The declaration of intention to tender shall indicate the name, first names, qualification and address of the candidate. (2) References and, if this is required by the specifications, a regular act of surety ship shall be annexed thereto.
Article 3154 details the mandatory contents of the ‘declaration of intention to tender.’ Subsection (1) requires basic identification and professional standing. Subsection (2) mandates ‘References and, if this is required by the specifications, a regular act of surety ship.’ This aims to vet the bona fides and basic qualifications of the tenderers upfront.
Contents and Forms of Tender: Article 3155
Article 3155 – Tender. – 1. Contents and forms. (1) The tender shall contain an offer of the price and the undertakings of the candidate. (2) It shall be deposited in a sealed envelope according to the conditions fixed in the specifications.
Article 3155 specifies the essential elements and format for the actual tender submission. Subsection (1) highlights the two core components: the financial proposal (‘offer of the price’) and the commitments regarding performance (‘undertakings of the candidate’). Subsection (2) mandates a crucial procedural requirement for integrity and confidentiality: it ‘shall be deposited in a sealed envelope according to the conditions fixed in the specifications.’ This ‘sealed envelope’ rule is a fundamental safeguard in competitive tendering, preventing unauthorized access to bids before the official opening.
Duty to Maintain Tender: Article 3156
Article 3156 – Duty to maintain it. (1) The tenderer may not withdraw or modify his tender until the allocation has been declared. (2) However, he may expressly limit in his tender the period for which he binds himself.
Article 3156 addresses the binding nature of a submitted tender. Subsection (1) establishes that ‘The tenderer may not withdraw or modify his tender until the allocation has been declared.’ This ‘firm offer’ rule is critical for the administrative authority’s ability to reliably assess bids. Subsection (2) provides a limited exception, allowing a tenderer to ‘expressly limit in his tender the period for which he binds himself,’ balancing offer stability with commercial realities.
The Office of Allocations and Bid Evaluation
The ‘office of allocations’ plays a central role in overseeing the tender process, from admitting candidates to evaluating bids.
Constitution of the Office: Article 3157
Article 3157 – Office of allocations. The constitution of the office of allocation shall be fixed by administrative regulations and such internal regulations as are particular to the various administrative authorities.
Article 3157 specifies that the constitution of the ‘office of allocation’ is formally established through administrative regulations or internal rules. This ensures institutional accountability, defines the scope of authority of the individuals involved, and promotes consistency and impartiality.
Publicity of Allocations: Article 3158
Article 3158 – Publicity of allocations. The proceedings of allocation shall be held in public.
Article 3158 mandates a fundamental principle of public procurement: transparency. ‘The proceedings of allocation shall be held in public.’ This requirement is essential for fostering trust, preventing corruption, and ensuring fairness in the allocation of public contracts.
Admission of Candidates: Duties and Discretionary Power (Articles 3159 & 3160)
Article 3159 – Admission of candidates. – 1. Duties of office. (1) The office of allocations shall firstly take cognizance of the declarations of intention to tender. (2) It shall verify whether these have been regularly deposited and whether the tenderers fulfill the conditions required for admission to the allocation.
Article 3159 outlines the initial duties of the ‘office of allocations,’ requiring it to formally review declarations of intention to tender and verify their regular deposit and the tenderers’ fulfillment of admission conditions.
Article 3160 – 2. Discretionary power. (1) The office shall admit to the allocation such tenders only as are made by contracts or suppliers who present all the desirable financial and professional guarantees. (2) Unless otherwise provided in the specifications, it shall not be bound to hear the candidates whom it turns down. (3) It shall not be bound to give reasons for its decision.
Article 3160 grants significant discretionary power to the office. Subsection (1) allows the office to admit only tenders from contractors who present ‘all the desirable financial and professional guarantees,’ empowering qualitative judgments. Subsections (2) and (3) reinforce this discretion by stating that the office is generally not bound to hear rejected candidates or give reasons for its decision. While this provides administrative flexibility, it also raises concerns about transparency and the ability to challenge arbitrary decisions.
Irrevocable Character of Admission Decision: Article 3161
Article 3161 – 3. Irrevocable character of decision taken. From the moment that the envelopes containing the tenders have been unsealed, the decision to admit to the allocation a contractor or supplier may no longer be altered.
Article 3161 establishes the irrevocability of the admission decision once the tender envelopes have been unsealed. This prevents retroactive disqualification or admission of bidders after their offers have been exposed, maintaining the integrity and finality of the process.
Reading of Tenders and Minute of Allocation: Articles 3162 & 3163
Article 3162 – Reading of tenders. (1) The envelopes containing the tenders shall be opened in public. (2) The tenders shall be read out.
Article 3162 emphasizes transparency by requiring that tender envelopes be opened in public and the tenders read out. This is a fundamental safeguard against corruption and ensures fairness.
Article 3163 – Minute of allocation. The results of the allocation shall be reduced to a minute which shall state all the circumstances of the allocation.
Article 3163 mandates the formal documentation of the tender allocation process in a ‘minute,’ which serves as an official and comprehensive account. This is crucial for administrative accountability and provides an audit trail for future review or challenges.
Designation of Provisional Successful Tenderer
The evaluation culminates in the designation of a provisional successful tenderer, with specific rules for selection and exceptions.
Principle of Most Advantageous Tender: Article 3164
Article 3164 – Designation of provisional tenderer. – 1. Principle. (1) The office of allocations shall declare the tenderer who has made the tender which is most advantageous for the administrative authorities to be provisionally the successful tenderer. (2) For this purpose, the office shall take into account the price offered and all the modalities of the tender in conformity with the specifications.
Article 3164 describes the designation of a provisional successful tenderer. Subsection (1) emphasizes that the selection criterion is the ‘most advantageous’ offer, reflecting a ‘best value’ approach rather than merely the lowest price. Subsection (2) clarifies that this is determined by taking into account ‘the price offered and all the modalities of the tender in conformity with the specifications,’ including technical merits, proposed solutions, and quality.
Exception to Designation: Article 3165
Article 3165 – 2. Exception. (1) The office need not designate and provisional successful tenderer where the regulations of the allocation prescribe that the administrative authorities do not intend to negotiate beyond a certain price. (2) Such price shall not be brought to the knowledge of the tenderers.
Article 3165 provides an exception: the office need not designate a provisional successful tenderer if the administrative authorities have a predetermined confidential price ceiling. This prevents bidders from simply adjusting their offers to meet a known maximum.
Handling Equivalent Tenders: Article 3166
Article 3166 – 3. Where several tenders and equal. (1) Where several tenderers have made equivalent tenders between which it is not possible for the office of allocations to choose, regulations of allocations may provide that the assignment of the contract shall be decided by ballot between such tenderers. (2) In default of such provision, a new allocation shall take place.
Article 3166 addresses situations where multiple tenders are equivalent. Subsection (1) allows for a ballot if regulations permit, while Subsection (2) mandates a new allocation process if no such provision exists, ensuring a deadlock does not indefinitely stall procurement.
Effects of Provisional Designation: Article 3167
Article 3167 – 4. Effects. (1) The designation of a provisional successful tenderer by the office shall not conclude the contract. (2) It shall have as its effect the designation of the only tenderer with whom the contact may be concluded. (3) It shall release the other tenderers from the obligations arising out of their tender.
Article 3167 clarifies that provisional designation does not conclude the contract. Its effect is to designate the only tenderer with whom the contract may be concluded, and it releases other tenderers from their obligations, providing clarity and relief to non-selected parties.
Final Approval and Contractual Flexibility
The final stage involves administrative approval, and the law allows for additional clauses and renewals.
Approval by Administrative Authorities: Article 3168
Article 3168 – Approval by administrative authorities. (1) The administrative authorities who have caused the allocation to be made may in their discretion approve or refuse to approve the result thereof. (2) The contract shall be complete where such approval is given.
Article 3168 grants the administrative authorities discretion to ‘approve or refuse to approve the result’ of the tender. The contract becomes complete and legally binding only when such approval is given, providing a system of checks and balances.
Additional Clauses and Renewal: Article 3169
Article 3169 – Additional clauses. (1) Contracts made by the allocation may be subjected to additional clauses agreed on by the parties. (2) They may also, on their expiry, be maintained in effect or renewed by mutual agreement.
Article 3169 provides flexibility. Subsection (1) allows for mutually agreed-upon additional clauses after contract award. Subsection (2) permits contracts to be maintained or renewed by mutual agreement upon expiry, which can be beneficial for continuity but must be exercised carefully to avoid circumventing competitive procurement principles.
Grounds for Nullity: Absence of Cause and Unlawful Cause
The Ethiopian Civil Code includes critical provisions for ensuring the fundamental validity and legitimacy of administrative contracts.
Absence of Cause: Article 3170
Article 3170 – Absence of cause. A contract shall be null on the ground of lack of cause where, at the time when it is made, the contract makes it impossible to attain the result desired by the administrative authorities and known to the other contracting party.
Article 3170 addresses ‘absence of cause’ as a ground for nullity. If, at the time of formation, the contract makes it impossible to attain the public purpose or result intended by the administrative authority (and known to the private party), the contract lacks a valid cause and is void. This protects public resources from being committed to fundamentally purposeless agreements.
Unlawful Cause: Article 3171
Article 3171 – Unlawful cause. (1) A contract shall be null on the ground of unlawful cause where it is made by the administrative authorities with an unlawful object in view. (2) The provisions of sub-art. (1) shall apply in particular where the contract is made by the administrative authorities with a view to procuring advantages of a pecuniary nature to the other contracting party and not for a reason of general interest.
Article 3171 defines ‘unlawful cause’ as another critical ground for nullity. Subsection (1) broadly states that a contract is null if made by administrative authorities with an ‘unlawful object in view’ (e.g., illegal, contrary to public policy, or an abuse of power). Subsection (2) provides a specific illustration: if the contract is made ‘with a view to procuring advantages of a pecuniary nature to the other contracting party and not for a reason of general interest,’ it is unlawful and null. This provision directly targets corruption, favoritism, and the misuse of public contracting for private gain, safeguarding public integrity.
Conclusion
The detailed provisions governing the tender process in Ethiopian administrative contracts underscore a strong commitment to transparency, fairness, and accountability. From the initial public notification and the precise formulation of specifications to the rigorous evaluation of bids and the final approval, each stage is designed to ensure that public contracts are awarded to the most advantageous tenderer in a manner that upholds public trust. Furthermore, the explicit grounds for nullity, particularly ‘absence of cause’ and ‘unlawful cause,’ serve as crucial legal safeguards, reinforcing the principle that administrative contracts must always serve a legitimate public purpose and be free from impropriety. This comprehensive legal framework is vital for the effective and ethical management of public resources in Ethiopia.
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