Legal Provision
Section 20A of the BMO: Supplies, goods and services
(1)
The procurement of all supplies, goods or services required by a corporation in the exercise of its powers and the performance of its duties under the deed of mutual covenant (if any) or this Ordinance shall comply with such standards and guidelines as may be specified in a Code of Practice relating to such procurement.
(2)
Subject to subsection (2A), any supplies, goods or services referred to in subsection (1) the value of which exceeds or is likely to exceed -
(a)
the sum of $200,000 or such other sum in substitution therefor as the Authority may specify by notice in the Gazette; or
(b)
a sum which is equivalent to 20% of the annual budget of the corporation or such other percentage in substitution therefor as the Authority may specify by notice in the Gazette,
whichever is the lesser, shall be procured by invitation to tender.
(2A)
Subsection (2) does not apply to any supplies, goods or services which but for this subsection would be required to be procured by a corporation by invitation to tender (referred to in this subsection as "relevant supplies, goods or services") if -
(a)
the relevant supplies, goods or services are of the same type as any supplies, goods or services which are for the time being supplied to the corporation by a supplier; and
(b)
the corporation decides by a resolution of the owners passed at a general meeting of the corporation that the relevant supplies, goods or services shall be procured from that supplier on such terms and conditions as specified in the resolution, instead of by invitation to tender.
(2B)
Where any supplies, goods or services are required under subsection (2)(b) to be procured by invitation to tender, whether a tender submitted for the purpose is accepted or not shall be decided by a resolution of the owners passed at a general meeting of the corporation.
(3)
(Repealed 5 of 2007 s.16)
(4)
All tender documents, copies of contracts, accounts and invoices and any other documents in the possession of a corporation and relating to the procurement of supplies, goods and services shall be kept by the corporation for such period, being not less than 6 years, as the corporation may determine.
(5)
A contract for the procurement of any supplies, goods or services shall not be void by reason only that it does not comply with subsection (1).
(6)
Where any supplies, goods or services are required under subsection (2) to be procured by invitation to tender, a contract for the procurement of the supplies, goods or services which does not comply with subsection (2) or (2B) -
(a)
subject to any resolution passed by the corporation under paragraph (b) or any order made by the court under subsection (7), shall not be void by reason only that it does not comply with subsection (2) or (2B);
(b)
subject to any order made by the court under subsection (7), may be avoided by the corporation by a resolution of the owners passed at a general meeting of the corporation but only for the reason that it does not comply with subsection (2) or (2B).
(7)
In any legal proceedings in relation to a contract for the procurement of any supplies, goods or services to which subsection (2) or (2B) applies, the court may make such orders (including whether the contract is void or voidable) and give such directions in respect of the rights and obligations of the contractual parties as the court thinks fit having regard to all the circumstances of the case, including (but not limited to) the following factors -
(a)
whether the supplies, goods or services have been procured by invitation to tender;
(b)
whether a general meeting of the corporation has been convened to consider the procurement of the supplies, goods or services;
(c)
whether the Code of Practice referred to in subsection (1) has been complied with;
(d)
whether the contract has been split, for the sole purpose of avoiding the compliance of the requirements in subsection (2) or (2B), from a contract which should have been made for the procurement of supplies, goods or services of greater value;
(e)
whether the supplies, goods or services were urgently required;
(f)
the progress of any activities or works in relation to the supplies, goods or services;
(g)
whether the owners have benefited from the contract;
(h)
whether the owners have incurred any financial loss due to the contract and the extent thereof;
(i)
whether the supplier of the supplies, goods or services under the contract has acted in good faith;
(j)
whether the supplier of the supplies, goods or services under the contract has benefited from the contract; and
(k)
whether the supplier of the supplies, goods or services under the contract has incurred any financial loss due to the contract and the extent thereof.
(8)
For the purposes of subsection (7), where the court makes an order that the contract is voidable at the instance of the corporation, it shall also make an order that a general meeting of the corporation be convened and held in such manner as the court thinks fit, so as to decide whether the contract is to be avoided.
(9)
For the avoidance of doubt, subject to section 29A, any person who enters into a contract for the procurement of any supplies, goods or services otherwise than in compliance with subsection (2) or, if applicable, subsection (2B) may be personally liable for any claims arising from the contract.
Schedule 7: Mandatory Terms in Deeds of Mutual Covenant
paragraph 5: Contracts entered into by manager
(1)
Subject to subparagraphs (2) and (3), the manager shall not enter into any contract for the procurement of any supplies, goods or services the value of which exceeds or is likely to exceed the sum of $200,000 or such other sum in substitution therefor as the Authority may specify by notice in the Gazette unless -
(a)
the supplies, goods or services are procured by invitation to tender; and
(b)
the procurement complies with the Code of Practice referred to in section 20A(1).
(2)
Subject to subparagraph (3), the manager shall not enter into any contract for the procurement of any supplies, goods or services the value of which exceeds or is likely to exceed a sum which is equivalent to 20% of the annual budget or such other percentage in substitution therefor as the Authority may specify by notice in the Gazette unless -
(a)
if there is a corporation -
(i)
the supplies, goods or services are procured by invitation to tender;
(ii)
the procurement complies with the Code of Practice referred to in section 20A(1); and
(iii)
whether a tender submitted for the purpose is accepted or not is decided by a resolution of the owners passed at a general meeting of the corporation, and the contract is entered into with the successful tenderer; or
(b)
if there is no corporation -
(i)
the supplies, goods or services are procured by invitation to tender;
(ii)
the procurement complies with the Code of Practice referred to in section 20A(1); and
(iii)
whether tender submitted for the purpose is accepted or not is decided by a resolution of the owners passed at a meeting of owners convened and conducted in accordance with the deed of mutual covenant, and the contract is entered into with the successful tenderer.
(3)
Subparagraphs (1) and (2) do not apply to any supplies, goods or services which but for this subparagraph would be required to be procured by invitation to tender (referred to in this subparagraph as "relevant supplies, goods or services") -
(a)
where there is a corporation, if -
(i)
the relevant supplies, goods or services are of the same type as any supplies, goods or services which are for the time being supplied to the corporation by a supplier; and
(ii)
the corporation decides by a resolution of the owners passed at a general meeting of the corporation that the relevant supplies, goods or services shall be procured from that supplier on such terms and conditions as specified in the resolution, instead of by invitation to tender; or
(b)
where there is no corporation, if -
(i)
the relevant supplies, goods or services are of the same type as any supplies, goods or services which are for the time being supplied to the owners by a supplier; and
(ii)
the owners decide by a resolution of the owners passed at a meeting of owners convened and conducted in accordance with the deed of mutual covenant that the relevant supplies, goods or services shall be procured from that supplier on such terms and conditions as specified in the resolution, instead of by invitation to tender.