University of Iceland liable for rejecting lower furniture bid

The University of Iceland is liable for damages to furniture supplier Hirzlan ehf after rejecting its lower bid for classroom furniture, the procurement complaints committee has found, mbl.is reported.

Hirzlan’s bid was 6,067,000 Icelandic krónur, nearly 1.15 million krónur below the 7,215,400-króna offer accepted from Penninn. The university must also pay Hirzlan 1 million krónur in legal costs. The committee did not set the amount of any damages.

The case concerned a mini-tender held in August 2025 under a framework agreement for furniture. The university sought 60 tables and 104 wheeled chairs for classrooms used by its continuing education programme. Tender documents said the contract would go to the lowest bid that met all requirements. Six bids were received.

The university rejected Hirzlan’s offer because it said the chairs did not meet the requirement for fabric upholstery on the seat. The product description said the chairs were padded and had a plastic cover. Hirzlan argued that the plastic part was beneath the seat, protecting the chairs when stacked, and that the seat itself was padded and covered in fabric.

After reviewing the bid and supporting documents, the committee found that the plastic cover was beneath the seat, not over it. The tender documents did not prohibit such a cover, so the chairs met the stated requirements and the university was not entitled to reject the bid on that basis.

The committee found that Hirzlan had a genuine chance of winning the contract and that rejecting its offer had reduced that chance, meeting the conditions for liability.

The contract with Penninn became binding on 12 September 2025, the day the university announced its choice. The committee therefore rejected Hirzlan’s requests to overturn the award, declare the contract ineffective or impose an administrative fine. The value of the purchase was below the applicable threshold of nearly 20.9 million krónur. The committee also rejected Hirzlan’s argument that the value should be assessed by combining purchases made under the framework agreement, ruling that the mini-tender had to be assessed on its own.