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Structuring and Drafting the Tender and Contract

57.1 Legal Qualification

Legal qualification relates fundamentally to the legal conditions that must be satisfied for a bidder to submit a bid according to the local/market or country’s common regulations.

Therefore, legal qualification refers to the formal regularity of the bidder, particularly with respect to its legal personality. The required documentation will usually include the following:[65]

  • Evidence of the bidder’s (including those in a bidding consortium) existence and good standing under the relevant law.
  • Evidence of the consortium agreement and the commitment of the respective members. Some countries and processes require the prospective bidders to constitute a SPV in this phase of the tender process. This is generally regarded as bad practice, as it imposes an unnecessarily expensive and time-consuming condition on bidders.
  • Evidence of the power of the representatives of each member of the bidding consortium to act on its behalf.
  • In the case of a foreign company operating in the country, evidence of its registration or license to operate issued by the competent entity, when the activity requires it.

Regarding tax and labour issues, both will usually be measured for each bidder, checking that the bidder is up to date with relevant tax commitments as well as with relevant labour laws. Evidence should be provided by the proposal’s submission date.

It is general practice for the RFQ conditions to prohibit a prospective bidder from participating in more than one consortium (or for any of its subsidiaries or parent companies to participate in another consortium). It is also general practice to establish circumstances that prevent a company from bidding that already has a vested interest (for example, a company that is acting as advisor or consultant of the procuring authority in the same process).

Legal qualification is essentially a local legal framework matter, and there is not much to say from the point of view of structure. However, the government must carefully consider the requirements to avoid creating a barrier for international bidders.

 

[65] Adapted from Río de Janeiro PPP guidelines.

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