In routine times, Israeli law obligates public entities to publish tenders for the procurement of goods, services, and the performance of work. However, Israel’s various Mandatory Tender Regulations contain provisions enabling public bodies to deviate from the tender obligation during states of emergency (such as war, large-scale military operations, or natural disasters) in order to facilitate urgent, efficient procurement.
These emergency arrangements obligate public bodies to substantiate (and sometimes even retroactively to prove) that the contract (or extension of an existing contract): (a) was urgently needed; (b) is for the minimum time-frame necessary; (c) is at logical, reasonable, and proportional terms relative to the market and the need.
Public bodies may rely on approvals and directives published for similar states of emergency in the past (such as during the COVID-19 pandemic or upon the outbreak of the ‘Swords of Iron’ War) to justify their deviation from the tender obligation or a contract termination in an emergency.
The legal foundation for deviating from the tender obligation during a state of emergency is as follows:
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Central government entities – Mandatory Tender Regulations of 1993.
These regulations include general tender exemption clauses:
1.1 Regulation 3(2) – “Contract required urgently to prevent substantial damage…”
For example, an urgent need for the purposes of evacuation, construction of emergency facilities, or procurement of protective equipment, food, or medical treatments.
1.2 Regulation 3(3) – “Contract involving a transaction, when holding a tender for it could materially jeopardize national security, the State’s foreign relations, its economy, public security, or a professional or trade secret of the ministry…”
For example, a contract for the purpose of constructing or erecting defensive measures, etc.
1.3 Regulation 3(28) – “Contract involving special and rare circumstances that justify engaging in it without a tender …”
It is important to keep in mind that, in any case, public bodies’ use of these regulations is contingent upon special approvals and conditions, and they must prove an urgent material need for any such contract.
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Local Municipalities – the Municipalities Regulations (Tenders) of 1987 (and the essentially identical provisions for local and regional councils).
These regulations also include general tender exemption clauses and provisions:
2.1 Regulation 3(6) – “Contract for an urgent order of goods or for the performance of urgent work in which a municipality engages in order to save lives or property.”
2.2 Regulation 3(19) – “Contract extension under terms that are identical or superior to the terms of the initial contract with the municipality, during or immediately after the initial contract, for the minimum time frame required and at a value not exceeding the value of the initial contract, provided the committee is convinced this is necessary due to constraints on the municipality’s ability to hold a tender deriving from the security situation prevailing in Israel in respect whereof the State declared a special state of emergency.”
Please keep in mind that Regulation 3(19) imposes a limit of up to six months and municipalities must publish the committee’s decision to extend the contract pursuant to this regulation on their websites.
It is equally important to keep in mind that, in any case, municipalities’ use of these regulations is contingent upon special approvals and conditions, and they must prove an urgent material need for any such contract.
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Important considerations that also apply during a state of emergency:
3.1 Maintaining the principles of proper management – Even when no tender is published, public bodies must document, substantiate, and consider alternative proposals to the extent possible.
3.2 Retroactive supervision and control – Controlled public bodies must report to various authorities, such as the State Comptroller, the Accountant-General, and, sometimes, to Knesset committees.
3.3 Some transparency – Public bodies must subsequently disclose executed contracts (e.g., on the ministry’s website or the Procurement Administration’s database).
Israeli law allows deviations from the Mandatory Tender Regulations in order to facilitate urgent actions and save lives. However, public bodies must act with considerable caution and transparency and perform internal controls to prevent corruption or any improper use of public funds, in addition to complying with the special provisions and rules prescribed in each exemption regulation.
We recommend consulting with a relevant expert before deciding on the most appropriate course of action in order to correctly implement the regulations during this state of emergency.
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