What is the ruling on giving a tender to a predetermined company?

Is it permitted to set the tender specifications of an auction, so that only the desirable tenderer can bid?

It is only permitted if the tendering authority is the owner of the business. The company can assign its business to any sub-contractor company it wills. But it is not permitted for the representatives who act on companies’ behalf to make agreements on the tender result in advance, nor is it permitted to invite fake bidders and make them raise the prices with fake offers.

Messenger of Allah said:

“Do not heat up the bargain by fake offers.” (Bukhari, Buyu’/Commerce, 64, 70)

“Messenger of Allah has banned meeting the sellers on the road (to marketplace), bargaining over a brother’s bargain and heating up the bargain by fake offers. He also banned the townsman from selling on behalf of the villager, even if they are blood brothers.” (Ibid)

It is not permitted to predetermine the successful tenderer in public biddings. Officials should be extremely sensitive on these issues by protecting the public property which is entrusted on them.

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Date: Mar 11, 2013