Mistake could cost Corinthia millions in catering contract

Corinthia Caterers could lose access to a lucrative government catering concession valued at €10 million after a crucial mistake made by its executives in a tender submission.

The company, part of the Corinthia Group, is now challenging its exclusion from the competition to provide catering services at the Mediterranean Conference Centre, arguing that its signed financial offer clearly committed it to paying a 21% commission.

The dispute, now before the Public Contracts Review Board, turns on whether the online entry was a procedural mistake that could be clarified or a conflicting financial submission that required rejection.

The concession covers five years and is intended for four caterers. Its estimated €10 million value represents total catering turnover across the concession, rather than guaranteed income for Corinthia.

Bidders had to offer at least 20% of turnover to the government’s MCC, subject to a minimum annual payment of €50,000.

Corinthia entered that minimum amount in the electronic procurement platform while submitting a signed form stating “21%” and “twenty one per cent”.

In its appeal, filed on 29 October, the company argued that the figures were compatible as one represented its commission rate and the other the annual minimum required by the tender.

It said excluding its offer was disproportionate and that any uncertainty could have been resolved without changing the substance of its bid.

The MCC, headed by Labour MP Nigel Vella, rejected that interpretation in its response, pointing to a clarification published before the submission deadline.

Asked whether bidders should enter a percentage or a euro value in the online field, the authority had replied: “A percentage please.”

The MCC, which disqualified Corinthia,  argues that the Corinthia Group Company submitted contradictory financial figures and that allowing it to replace the online entry after bids opened would breach rules prohibiting rectification of financial offers.

It also maintains that doing so would favour Corinthia over competitors who followed the published instructions.

Villa Arrigo, one of the four recommended operators, has joined the dispute in support of the MCC.

Its interest is direct as Corinthia’s admission at 21% would push Villa Arrigo’s 20.10% offer out of the qualifying four.

The other recommended bidders are James Caterers and Neriku, each offering 24%, and Xara Palace Hotel Company, offering 23.50%.

Corinthia wants the rejection overturned, its bid readmitted and its appeal deposit refunded.

The PCRB has yet to make a final decision.