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Ministry of Industries and Innovation

Merchants and Trade - Act No 65/1993 on the Implementation of Invitation to Tender

[TRANSLATED FROM THE ICELANDIC]

(1 March 1998)
Act No 65/1993 on the Implementation of Invitation to Tender


Scope
Art. 1. The present Act will apply when an Invitation to Tender is used in order to establish business between two or more parties concerning works, goods or services. The Act will, however, not apply to tendering in the financial and securities' market.
Definitions
Art. 2.

Invitations to Tender:- Where a buyer seeks in writing binding bids for the works, goods or services being tendered. The bids are acquired from more than a single party in accordance with the same information and within the same respite.

General Invitation to Tender:- Tendering whereby an unspecified number of parties is by means of an advertisement afforded an opportunity of submitting bids.
Closed Invitation to Tender:- Tendering whereby a specified number of parties alone is afforded an opportunity of submitting bids.
Buyer:- In the present Act a buyer means the buyer of the works, goods or services being tendered.
Bidder:- In the present Act a bidder means the party bidding for the works, goods or services being tendered.
Pre-qualification:- Buyer's choice of those permitted to participate in a Closed Invitation to Tender.
Advertisements on Invitation to Tender
Art. 3. General Invitations to Tender shall be advertised in the press, on the air or in other general ways, stating where and when tendering documentation will be delivered. Bidders shall have access to information specifying the name of the buyer or his agent, that which is being tendered, the respite offered for the return of bids and the delivery time of that which is being tendered.

Invitation to Tender documentation shall include all requisite information in order to render bidding possible. The respite for the return of a bid shall at all times be suitable having regard for the extent of tendering.
Art. 4

. Upon a closed Invitation to Tender a special message concerning it shall be sent to those whom the buyer affords an opportunity of submitting a bid. In addition to that which is specified in Art. 3 the message shall reveal which parties are being afforded an opportunity of submitting bids.
Withdrawal of Bid
Art. 5. In case a bidder withdraw his bid prior to the opening of bids he is not bound by his bid. Withdrawal is valid only provided it be effected in writing or in another verifiable manner.
Opening of Bids
Art. 6. All bids submitted on the basis of the selfsame Invitation to Tender shall be opened simultaneously at the place and time stipulated in an advertisement or a special notification, cf., however, Art. 7. Bidders or their representatives shall be authorized to be present at the opening of bids.
Art. 7. It is not permissible to open bids which are received after the passing of the respite which was stipulated for the delivery of bids. It is, however, permissible to open bids which have been received by facsimile at the place of opening of bids prior to the expiration of the respite for delivery, provided that documentation intended to attach to the bid has been mailed under registered cover at least a day before the opening of bids occurs.
Art. 8. The names of bidders and the total amount of a bid shall be read aloud. An estimate of costs shall also be read aloud and recorded, if possible. Care shall be taken always to read corresponding figures from all bidders. The buyer and all bidders present or their representatives shall sign Minutes and be handed a copy thereof if they so wish.
Respite for the Acceptance of Bid
Art. 9. The terms of Invitation to Tender shall specify for how long a bidder shall be bound by his bid. In case a reply to a bid has not been received within the respite specified he is no longer bound by his bid.
Art. 10. In case a buyer has rejected a bid this will no longer remain binding for the bidder.
Art. 11. A bidder is no longer bound by his bid if the buyer accepts a bid of another bidder.
Choice of Bid
Art. 12. A bid lacking to a considerable extent conformity with the terms of Invitation to Tender shall not be accepted. Deviation bids are permitted, unless a mention be made of an alternative arrangement.
Art. 13. In case of a general Invitation to Tender the buyer is authorized to accept any bid or reject all of these. This does, however, apply subject to the limitation revealed in Art. 12.
Art. 14. In case of a closed Invitation to Tender the buyer is authorized to accept only the most favourable bid or reject all of these.
In case the most favourable bid be not also the lowest one the buyer shall as soon as possible send to the bidders having had lower bids than the one accepted a substantiated statement concerning the choice of the bid.
Art. 15. In case of a closed Invitation to Tender it is permissible only to accept bids from those having been offered to submit bids.
Art. 16. Comparison of bids and a decision on which bid shall be accepted or which bidder shall be negotiated with shall be undertaken on the basis of the terms of Invitation to Tender.
Rejection of Bid
Art. 17. In case the buyer will not accept an offer which has been received he shall advise the bidder thereof formally no later than at the end of the respite he has to accept a bid.
Art. 18. In case an Invitation to Tender has been undertaken the buyer is not permitted to embark upon tendering anew or to negotiate implementation thereof through avenues other than those stipulated by the Invitation to Tender documentation until all the participants have been given a detailed account of the reasons for the rejection of all bids.


Approval of Bid
Art. 19. After the buyer has accepted a bidder's bid and the bidder has been formally notified thereof an agreement has been reached between them to the effect prescribed by the Invitation to Tender documentation and the bid.
Art. 20. Violations of the present Act lead to liability for indemnification according to general rules and at the same time the Invitation to Tender as a whole is declared invalid. The amount of indemnification shall be based on the cost of preparing a bid and participating in an Invitation to Tender.
Art. 21. The present Act enters into force forthwith.

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