The appeal over the decision to cancel the multi-million-euro tender to expand Mater Dei Hospital's A&E Department began being heard before the Public Contracts Review Board (PCRB) on Thursday morning.

Through this appeal, CE-BB Projects want the Contracting Authority to annul and overturn the decision to cancel this major tender, as well as reinstate the tender process to the stage prior to cancellation with their bid back in consideration.

CE-BB Projects was the sole bidder in the tender application that sought to extend Mater Dei's A&E Department in a project initially valued at €80 million. The tender was cancelled by the government earlier this July after the sole bid received came in at a price of €135 million - a 70% increase from what was budgeted. CE-BB Projects Ltd is a joint partnership between CE Installations and the Bonnici Group.

The tender called for the extension of Mater Dei Hospital's A&E Department and the construction of staff amenities within it, ten new acute mental health wards with an external recreational area for patients, new engineering plant areas for the national hospital (plus the relocation of existing installations), a new car park, an electrical substation, and some stores and workshops.

This project is not only aimed to bolster Malta's principal emergency healthcare services, but it also aims to shift mental health services away from Mount Carmel Hospital.

During this appeal's opening hearing on Thursday, the objectors stated a handful of arguments in their case. Firstly, they noted that while the government rejected the sole bid and cancelled the tender altogether for being "economically not feasible," the government failed in its de facto duty to clarify why, beyond this point, this tender was cancelled. The appellants stated that with them being the sole bidders present in this tender, the government's obligation to discuss this price divergence is even more salient.

The appellants declared that their offer fell in accordance with market value, and therefore they questioned how the government reached its "abnormally low" evaluation of €80 million for what was demanded in this project tender.

Using an analogy, they argued that "it's like requesting a brand new Porsche Cayenne at market value (€120,000) and not at your requested €40,000. Our argument is that our offer is economically feasible, and that rather, your requested sum was not economically feasible."

They also argued that many tenders were accepted in the past despite the bid received going above their intended value. In this regard, they reminded the PCRB that a tender price is just there to gauge an idea of a project's value and that it is not there to act as a strict price capping. Henceforth, they sustained that the valued €80 million was never set out as a binding price.

The objectors also noted that with the way their bid was rejected and the tender cancelled, they believe that the principle of proportionality was breached against them, as were principles of transparency and equal treatment. It was stated that the manner through which this tender was cancelled was not only non-transparent, "but [was] also procedurally unfair and disproportionate to the circumstances."

"They did not let us explain why our price is economically feasible, different to the initial evaluation, and why it is not fair to what the market requires," the objectors observed.

The appellants said that with the tender cancelled at such a late stage, they were forced with the unwarranted disclosure of sensitive commercial information. It was noted that such disclosures damage people's trust in this system; the appellants continued that if the government wants companies to retain their trust, then they need to be comforted that the information they provide will remain secret, as otherwise, they may risk having operational trade secrets revealed.

The defendants, on behalf of the Ministry for Health and Active Ageing, stated that the tender was cancelled after no submitted offers were "financially worthwhile" and rebuked the claim that the government's €80 million valuation for this expansion project was "abnormally low," labelling this argument as a fallacy.

The lawyers representing the government's side told the PCRB that a contract notice for this tender was published in December 2024 and that in the time elapsed since, "no clarifications were ever requested on how the tender was valued at €80 million, when their ball-park figure was far higher."

The defendants clarified that the tender document does not refer to the €80 valuation as a price capping for incoming bids, that bidders have the right to offer more than what is guided, and that ultimately, the government reserves the right to reject any offers.

The defendants continued that the government reserves the right to reject a submitted bid even in the scenario where a bidder convinces it that the initial project valuation truly is "abnormally low."

The government's legal representatives also argued that it would have been wrong for them to accept the €135 million bid, considering it is "nearly double" the tender's value. They asked, "how could we accept a bid of €135 million when the tender offer was €80 million?" in the context that other bidders may have thought not to submit a bid because they could not offer what was desired at a price that aligned with the given valuation, even if this was at a price between €80 million and the submitted €135 million.

It was said to be a normal practice within this industry for companies not to submit a bid if they cannot reach a "low" target price.

"With that extra €55 million, we can have one or two more projects," the defendants stated.

Following this discussion, the Director General of the Department of Contracts, Adrian Dalli said that every tender bid received that goes over an estimated value is gone over by the Ministry for Finance's budget office. It was mentioned that the process to come up with a tender's valuation, in this case €80 million, takes months and many steps.

With the objectors questioning whether the government's €80 million valuation was correct in the first place, the next hearing on this tender appeal will see both parties compare and clarify their differing valuations to expand on Mater Dei Hospital's A&E Department. This step is expected to see the defendants clarify to some depth how the appellant's bid went over budget.

This project was to be co-financed by European Union funds.