As a member state of the European Union, Cyprus maintains relatively strict requirements for the implementation of public sector procurement and engineering projects. Government procurement and public works project tendering are generally conducted in accordance with international practices and the general principles of the European Union.
In recent years, Cyprus has increased its investment in infrastructure. Projects such as the energy center, the expansion of the Limassol port, the new Larnaca airport, the Limassol oncology hospital, seawater desalination, and waste treatment are being implemented successively, providing business opportunities for our country's foreign contracted projects. To help enterprises understand the Cyprus tendering system, our office has recently conducted further research into relevant Cypriot laws and consulted with relevant departments regarding project implementation procedures to draft this research report.
Following its accession to the European Union, Cyprus amended its tendering and procurement procedures in accordance with EU requirements and enacted the "Law on the Award of Public Supply Contracts, Public Works Contracts, and Other Related Matters." This law provides clear regulations on the main methods of public sector procurement and project tendering, general principles of bidding, the publication of tender notices and invitations to tender, application deadlines, basic requirements for bidders, bid evaluation, contract award, and review.
I. Main Methods of Public Sector Procurement and Project Tendering
The public sector in Cyprus mainly adopts the following three methods for procuring public goods and implementing public works projects.
(1) Open Tendering
Open tendering shall be adopted for projects that meet specified thresholds and conditions. It is stipulated that projects involving procurement and services exceeding 750,000 Euros awarded within one year must use open tendering. Any natural person or economic entity that meets the requirements of the tender documents may participate in the bidding.
(2) Restricted Tendering
Restricted tendering may be used for projects under 750,000 Euros, where tender documents are issued only to a limited number of bidders, with a minimum of 5 and a maximum of 20.
(3) Negotiated Procedure
The public sector may negotiate directly with suppliers and award public contracts without prior publication of a contract notice in the following circumstances:
1. Where no tenders or suitable tenders have been submitted following open or restricted tendering procedures.
2. Where the contract can be awarded to a specific supplier for technical or artistic reasons, or for reasons related to the protection of exclusive rights.
3. Where extreme urgency caused by events makes the time required for publishing a notice insufficient.
4. For public supply contracts in the following cases:
(1) When the products involved are manufactured purely for research, experimentation, study, or development, rather than for large-scale production to establish commercial viability or recover research and development costs;
(2) For partial replacement or extension of existing supplies and installations from the original supplier, where a change of supplier would result in material specifications or performance mismatches, or lead to disproportionate difficulties in operation and maintenance. However, such contracts shall not exceed three years.
5. For public service contracts and public works contracts in the following cases:
(1) Regarding public service contracts for design contests, if the contest rules stipulate that the contract must be awarded to the winner or one of the winners, all winners must be invited to participate in negotiations;
(2) For additional services or works not included in the original project or contract, where such additional services or works can only be provided by the original supplier for technical or economic reasons, or where the total amount of the additional service or works contract does not exceed 50% of the original contract amount.
(3) For new services or works that are repetitions of services or works under the original contract.
II. General Principles of Tendering and Bidding
(1) The awarding authority shall treat all suppliers in an open and transparent manner, in compliance with non-discriminatory policies between countries.
(2) Bidders may be natural or legal persons. Suppliers may participate in bidding as a consortium; this consortium must bid as a special legal form and must form a legal entity when the contract is awarded.
(3) Public contracts awarded by the awarding authority to suppliers from EU member states shall use the same preferential conditions as those applied to suppliers from third countries under the Government Procurement Agreement.
(4) Bidders must submit their tender documents in writing, either by personal delivery or by mail. Other methods of submission may also be used, provided that the method contains all information required for bid evaluation, maintains the confidentiality of the bid, and allows for the bid to be opened after the deadline.
(5) Selection principles for candidates in restricted tendering and negotiated procedures
In restricted and negotiated procedures, the awarding authority will select the suppliers they intend to invite to bid or negotiate based on the minimum conditions regarding the status, economic, and technical nature of the suppliers. When the awarding authority awards a contract through a restricted procedure, they shall decide in advance the number of suppliers they intend to invite based on the nature of the services provided, the works implemented, or the goods supplied, and state this in the contract notice. To ensure competition, a minimum of 5 and a maximum of 20 candidates should be invited to participate in the bidding. When the awarding authority awards a contract through a negotiated procedure, the number of candidates invited to negotiate shall not be less than 3. The awarding authority shall issue invitations in a non-discriminatory manner, treating bidders from EU member states and local Cypriot bidders equally.
III. Publication of Tender Notices, Invitations to Tender, and Application Deadlines
(1) Publication of Notices
Cyprus stipulates that procurement exceeding 750,000 Euros within one year and the procurement methods adopted must be explicitly announced. The awarding authority shall send the notice through the most appropriate channels to the Office for Official Publications of the European Communities; if urgent, it may be sent via telex, telegram, fax, or email. The notice will be published in full in the Official Journal of the European Union and the Tenders Electronic Daily (TED) database, using the official languages of the European Community, but only the native language text is legally binding.
In addition to the aforementioned Official Journal of the European Union and the electronic database (TED), the notice shall also be published in the Official Gazette of the Republic of Cyprus and at least one local newspaper.
(2) Bidding Deadlines for Open Tendering Projects
The deadline for receiving bids for open tendering projects, from the date the awarding authority issues the notice, is generally not less than 36 days, and in no case less than 22 days. The awarding authority or competent authority must send the contract documents and supporting documents to the bidder within 6 days of receiving the application. Regarding other information on contract documents, the awarding authority shall provide it within 6 days before the final bid submission date. For any reason, if the contract documents, supporting documents, or additional information cannot be provided within the specified time limit, or if bidding can only take place after site inspection or on-site verification of the contract documents and supporting documents, the specified time limit shall be extended accordingly.
(3) Delivery of Invitations and Bidding Deadlines for Restricted Tendering and Negotiated Procedures
In restricted tendering and negotiated procedures, the deadline for receiving requests to participate set by the awarding authority is not less than 37 days from the date of the notice. The awarding authority will simultaneously invite the selected candidates in writing to submit tender documents. The invitation letter shall be accompanied by contract documents and supporting documents and shall include the following:
1. The address where contract documents and supporting documents can be obtained, the final date for requests, and the payment method for these documents;
2. The final date for bid submission, the delivery address, and the language of preparation;
3. The published contract notice;
4. Description of attached documents;
5. Criteria for contract award (if not stated in the notice).
In restricted tendering procedures, the bid submission time set by the awarding authority is not less than 40 days from the date of the written invitation. If the awarding authority has issued an indicative notice, this may be reduced to 26 days.
Requests to participate in bidding may be delivered by letter, telegram, telex, fax, telephone, or email, but if not by letter, they must be confirmed by letter before the specified deadline. The awarding authority must provide additional information on contract documents 6 days before the bid submission deadline. In cases where bidding can only take place after site inspection or on-site verification of contract documents and supporting documents, the specified time limit shall be extended accordingly. Due to emergency situations, the awarding authority may set the following deadlines:
1. For receiving requests to participate, not less than 15 days after the date of the notice;
2. For receiving bids, not less than 10 days after the date of the invitation to tender;
The awarding authority preparing to award a works concession contract shall set a deadline for receiving applications for concession qualifications, which shall not be less than 52 days from the date of the notice. For public works contracts awarded by a concessionaire rather than the contracting authority, the deadline for receiving requests to participate set by the concessionaire shall not be less than 37 days from the date of the notice, and the bid submission deadline shall not be less than 40 days from the date of the notice or invitation to tender.
IV. Basic Requirements for Bidders
(1) Any supplier or contractor may not participate in bidding under the following circumstances:
1. Bankruptcy, currently under court proceedings, awarded to creditors, or having suspended trade activities.
2. Currently in bankruptcy proceedings, ordered to cease operations, under court administration, or awarded to creditors;
3. Convicted by a court for criminal activities in their professional conduct;
4. Guilty of professional misconduct in trade and professional activities;
5. Failure to fulfill obligations regarding the payment of taxes as stipulated by the laws of their home country or Cyprus;
6. Providing false declarations or statements when providing any required information.
Any supplier of goods or services wishing to participate in bidding for public supply or service contracts, as well as any contractor wishing to participate in public works contracts, must provide proof of registration with a professional or trade body or provide a sworn statement or certificate in accordance with regulations. Candidates or bidders for public service contracts must hold a special authorization or be a member of a specific organization in their home country; to perform the relevant services, the awarding authority may require them to prove that they hold such authorization or membership.
(2) Proof of the financial and economic situation of suppliers and contractors may be provided in the following ways:
1. Bank statements; for service providers, proof of professional risk indemnity insurance may also be provided;
2. Financial statements or extracts (if the laws of the supplier's country require the publication of statements);
3. Proof of the enterprise's total turnover for the last three fiscal years and turnover related to services, works, or products relevant to the contract.
(3) The technical capacity of suppliers and contractors may be determined as follows:
1. For suppliers, evidence may be provided in one or more of the following forms based on the nature, quantity, and purpose of the products supplied:
(1) A list of major deliveries over the past three years, including the amount, date, and recipient for each, whether public or private sector. If it is a public institution, it shall be countersigned or certified by the competent authority; if it is a private purchase, it shall be certified by the purchaser or issued by the supplier;
(2) Description of the supplier's technical facilities, quality assurance measures, and research facilities;
(3) Proof of technical personnel and technical bodies involved, especially those responsible for quality control, regardless of whether they are directly part of the supplier;
(4) Samples, descriptions, or photographs of the products supplied;
(5) Certificates issued by official quality control institutions or recognized competent authorities, certifying that the products meet certain specifications or standards;
(6) If complex products are provided, or special products for special requirements, inspection of the supplier's production capacity, research facilities, and quality control measures conducted by the awarding authority or the competent official authority in the country where the supplier is registered.
2. For contractors, the following proof may be provided:
(1) Educational and professional qualifications of the contractor or the qualifications of the enterprise's management personnel, especially those responsible for implementing the works under the contract;
(2) A list of works implemented over the past 5 years, including customer satisfaction certificates, amounts, dates, and addresses of the works, and whether they were implemented in accordance with trade rules and fully completed. If necessary, the competent authority issuing the certificate will submit it directly to the awarding authority;
(3) Description of tools, plant, and technical equipment available to the contractor for implementing the works under the contract;
(4) Average annual number of personnel and management staff available to the enterprise over the past three years;
(5) Description of the technical personnel and technical bodies, whether or not they belong to the enterprise, that the contractor will designate to execute the works.
The above requirements are complex, and it is not mandatory to provide every piece of proof. The awarding authority will specify the information or proof they require in the notice or invitation to tender. For public supply and service contracts, the scope of the above proof or the scope of information related to the contract matters will be specified. For public service contracts, when the awarding authority requires an independent body to issue a certificate proving that its services meet certain quality assurance standards, the Cyprus EN ISO 9000 series and Cyprus EN 45000 series standards will be used.
V. Regulations on Bid Evaluation, Contract Award, and Review
(1) Principles of Bid Evaluation and Award
1. Lowest price;
2. Most economically advantageous tender;
3. When the contract is awarded to the most economically advantageous tender, the awarding authority shall specify the award criteria used in order of importance in the contract documents or contract notice.
(2) Bid Evaluation
In accordance with the principles of bid evaluation and award, the awarding authority shall conduct the evaluation and report to the Tenders Board for approval. The Tenders Board is located within the Ministry of Finance. If an abnormally low price for goods, works, or services appears in the bid, the awarding authority shall, before rejecting this bid, request the bidder in writing to explain the quotation or the parts that the awarding authority considers to be abnormally low. The awarding authority will further evaluate the explanation provided by the bidder, objectively evaluating the explanation including the economy of the manufacturing process, the technical solutions chosen, and the economy of manufacturing, as well as any special preferential conditions that the bidder already enjoys or proposes to enjoy. If the contract documents stipulate that the contract is to be awarded to the lowest price bid, the awarding authority shall report to the Tenders Board through the competent authority to reject the bid it considers to be abnormally low. The awarding authority shall notify the excluded candidate or bidder within 15 days of receiving the written request, explaining the reasons for rejecting their application or bid, the acceptable bidders, the advantages of the winning bidder, and the name of the winning bidder.
(3) Formulation of the Awarded Contract
The awarded contract includes: quality, price, technical merit, aesthetic and functional characteristics, environmental characteristics, operating costs, cost-effectiveness, profitability, after-sales service and technical support, delivery date, completion deadline, or delivery deadline.
The awarding authority shall notify the candidates or bidders of the decision regarding the contract award within the award period and notify the Office for Official Publications of the European Communities to publish this decision through the competent authority.
For each awarded contract, the awarding authority shall prepare a report containing the following:
1. Name and address of the awarding authority, contract title, and amount;
2. Names of accepted candidates and bidders and the reasons for their selection;
3. Names of rejected candidates and bidders and the reasons for their rejection;
4. Name of the winning bidder, reasons for selecting them, and the part of the contract the winning bidder intends to subcontract to third parties;
5. If it is a negotiated procedure, the circumstances justifying this procedure.
This report shall be submitted to the Tenders Board through the competent authority.
(4) Tenders Review Authority
If a bidder has objections to the evaluation results, they may notify the Tenders Review Authority in writing within 5 days of receiving the news, file an application for review, state the reasons and factual basis, and attach necessary documents including the following information:
1. Full details of the application for review;
2. Name of the awarding authority;
3. Details of the tender contract or notice.
If the details provided by the applicant are insufficient, the Tenders Review Authority may request further details within 3 days. If the applicant cannot or refuses to provide them, their review application will be cancelled. The Tenders Review Authority shall notify the awarding authority within 2 days of receiving the review application and request the awarding authority to submit a written report with all details within 10 days. During this period, the awarding authority cannot sign the award contract. After receiving the report from the awarding authority, if the Tenders Review Authority considers the application irrelevant or groundless, it may cancel the application. If the Tenders Review Authority considers it necessary to hold a hearing, it will notify the applicant or their representative in writing and notify the awarding authority two days before the hearing to attend and express their views. Regardless of whether a hearing is held, the approval procedure will be completed as soon as possible, and a decision will be made within 30 days of the review application at the latest. If the awarding authority and the bidder are dissatisfied with the ruling of the Tenders Review Authority, they may file a lawsuit with the Supreme Court of Cyprus in accordance with Article 146 of the Constitution.