tender cancellation

Tender cancellation occurs when a contracting authority discontinues a tender procedure without awarding a contract to any of the participating suppliers. This typically happens when the circumstances underlying the competition change, or when errors arise that cannot be corrected by other means.

How does tender cancellation work?

Under EU procurement law, contracting authorities are not obligated to award a contract after launching a tender procedure. They retain the discretion to cancel, provided there is a legitimate reason. In Norway, this right is codified in the Public Procurement Regulation (FOA) §§ 10-4 and 25-4, which require «saklig grunn» (legitimate reason) — a standard that aligns with the general principles of transparency and equal treatment in Article 18 of Directive 2014/24/EU.

Whether legitimate grounds exist depends on an overall assessment, considering the timing of the cancellation, the circumstances that triggered it, and what the contracting authority aims to achieve. Common grounds include receiving no compliant tenders, bids exceeding the budget, receiving only one submission, or discovering errors in the tender documents that may have affected the outcome. The later in the process the cancellation occurs, the stronger the justification required.

Rights, obligations and liability

It is important to distinguish between the right and the duty to cancel. Some circumstances give the contracting authority a right to cancel — such as changed needs or budget constraints. Others create a duty, typically when procedural errors have affected the outcome and cannot be remedied otherwise.

The contracting authority must promptly notify all tenderers in writing with a sufficiently detailed justification. Even a lawful cancellation can trigger liability for damages — suppliers may be entitled to compensation for bid preparation costs if the cancellation results from errors made by the authority. Complaints can be filed with KOFA in Norway, or through national review bodies in other EU/EEA countries.

Tools like Cobrief help suppliers monitor changes in active tenders, making it easier to assess the implications of a cancellation quickly.

Tender cancellation is a safeguard mechanism in procurement law that allows contracting authorities to halt a procedure when underlying conditions fail, but it requires legitimate justification and transparency towards the suppliers who have invested time and resources in the bidding process.