Since March 2021, the content and form of tender security in public procurement is regulated not only by the Resolution of the NBU Board of December 15, 2004 No. 639 but also by the Order of the Ministry of Economy of December 14, 2020 No. 2628 (hereinafter referred to as the Order). Unfortunately, there are still cases when financial institutions make mistakes when issuing bank guarantees, which becomes a reason for disqualifications and filing complaints. We invite you to find out what cases have occurred most often in recent months, from the lawyers of SmartTender.

Unclear Deadline for Payment of the Guarantee Amount

Decision No. 20569-р/пк-пз dated 09/09/2021

The participant appealed against the winner of the procurement procedure UA-2021-07-28-000415-c. He noted that according to clause 10, part 4 of the Order, the term for payment of funds under the guarantee is determined in working or banking days. At the same time, the text of the winner's guarantee contained the following words: “According to this guarantee, the guarantor is obliged to pay the amount of the guarantee to the beneficiary within 5 business/banking days”. Since banking and business days are not identical concepts, the complainant argued that it was not clear in the text when the amount of the guarantee would be paid.

The customer noted that since the Order form contains exactly the following words: "business/banking days", the provision of the winner's tender proposal complies with the requirements of the tender documentation.

Despite the customer's explanations, the AMCU Collegium satisfied the complaint, noting that securing the proposal of the procurement winner does not comply with the terms of the tender documentation.

This practice emerged this summer and has become a fairly popular ground for rejection/appeal. At the same time, it should be noted that this practice is not one hundred percent, since in recent months we have come across dozens of decisions where the described situation was considered inconsistency, but at the same time, there were up to 10 decisions where the AMCU Board determined that there were no violations. When analyzing, we noticed that there is a tendency for decisions when the Collegium does not see violations: usually this is if the customer provided a form of a bank guarantee in the documentation, where the phrase "business/banking" was immediately indicated. If the documentation contains a link to the Order, without a separate form in the documentation itself, in most cases the absence of a definition between business and banking days is recognized by the Collegium as a discrepancy. In this regard, we recommend asking the bank to clearly define in its guarantee the words either “business days” or “banking days”.

Wrong Type of Electronic Seal

Decision No. 16831-р/пк-пз dated 07/22/2021

In procurement UA-2021-05-24-007483-b, the winner's proposal contained the provision of a tender proposal in the form of an electronic document. The complainant noted that, according to paragraph 4 of clause 7 of the supplier's bank guarantee, his guarantee is certified by a qualified electronic seal of the bank. At the same time, after checking the print file on the CCA website, the complainant found that it was improved.

By clause 7 of the requirements of the Order, the provided in electronic form guarantee is signed by applying a qualified electronic signature(s) and a qualified electronic seal (if any), equated to the handwritten signature(s) of the authorized person(s) of the guarantor and their seal, respectively.

According to the Letter of the Ministry of Economy dated 02/16/2021, the IES is not considered an analog of the QES, and the same applies to seals. Referring to this document, the AMCU Collegium satisfied the complaint and obliged the customer to disqualify the winner, since the guarantee does not meet the requirements of the Order.

Even though today most banks impose a qualified signature and seal on electronic documents, there are cases when an institution does not provide for all the nuances of the public tender procedure. Therefore, be sure to check that the superimposed signature and seal are qualified. To do this, unpack the archive of the issued bank guarantee and check the key file on the website of the Central Certifying Authority.

No Requirement to Issue a Guarantee by the Order

Decision No. 19496-р/пк-пз dated 08/27/2021

The complainant noted that the bank guarantee of another procurement UA-2021-06-25-001619-a participant does not contain the details of the guarantee determined by the Order form, and specifically the paragraph: “The demand must be accompanied by copies of documents certified by the beneficiary and sealed by the beneficiary (if available), which confirm the authority of the person(s) who signed the demand”.

In response, the customer noted that the tender documentation did not contain requirements to issue a bank guarantee by the Order, so the text of the guarantee does not have to contain all the details.

Despite this, the AMCU Collegium satisfied the complaint, noting that, according to section 3 of Resolution No. 639, the bank guarantee details must meet the requirements for securing a tender proposal established by the regulatory legal act of the central executive body implementing the state policy in the field of public procurement. The Ministry of Economy is such a body, and the Order is such legal action. Considering the above, since the requirements of the Order were not complied with, the provision of the tender proposal does not comply with the terms of the tender documentation.

Therefore, remember that your guarantee must be issued in the form of an Order, even if the tender documentation does not contain direct requirements for this, but only conditions that the guarantee must be issued by Resolution No. 639.

Lack of Information About the Contract

Decision No. 20477-р/пк-пз dated 09/08/2021

In procurement UA-2021-05-14-008635-c, the customer rejected the participant's proposal due to the lack of a reference to the contract, according to which a bank guarantee is issued. The participant did not agree with this decision and filed a complaint, where noted that, according to clause 3 of the Order form, information about the contract should be provided only if the bank and the principal have agreed to the provision of a guarantee. The AMCU Collegium agreed with the arguments and satisfied the complaint.

In recent months, we have encountered many situations where customers rejected participants for lack of information about the contract. But the AMCU Collegium always takes the side of the participant, arguing that the customer did not prove the existence of such an agreement, and the Order provides for the need to indicate information only if there is an agreement.

Even in the case when the customer tried to substantiate his position in detail: he found information on the bank's website that the guarantee is issued by the agreement, which means that the agreement must be – the Collegium did not recognize this as confirmation of the existence of the agreement.

So, if your bank guarantee does not contain information about the agreement, be careful not to provide this document as part of the offer, if such an agreement is still available. Also remember that the lack of information about the contract from your competitor, provided that such a document is not included in their proposal, is not a discrepancy, and therefore cannot be appealed.

How to Find Out More About the Nuances of Issuing a Bank Guarantee?

The SmartTender team regularly publishes training materials that help our users better navigate the nuances of public procurement. We offer you the recording of the September webinar “Securing a tender proposal. How to get a bank guarantee and what to look for when submitting an offer”, as well as a short instruction “Making a bank guarantee on SmartTender.biz”.

How to Get Legal Advice on Bank Guarantee Issuing?

Today there are many cases similar to those described above. When banks issue bank guarantees, there is always the possibility of human error, and, unfortunately, it is still quite high. Therefore, first of all, we recommend that you check the bank guarantee immediately after receiving it.

If you need help verifying your bank guarantee or a competitor's guarantee, contact SmartTender's lawyers. Leave a request on this page.

Please note that this service is available only for registered users of the SmartTender.biz.

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