Australia: English case law offers insights to Australian government agencies preparing for the Government Procurement (Judicial Review) Act 2018 (Cth)

The Public Contracts Regulations 2015 (UK) (PC Regulations) grants tenderers from the United Kingdom and selected other countries the right to challenge the procurement decisions of English, Welsh and Northern Irish government agencies. As the remedies available to tenderers under the PC Regulations are broadly similar to available to tenderers in Australia under the Government Procurement (Judicial Review) Act 2018 (Cth) (GPJRA), English PC Regulations case law offers Australian Government agencies useful insights into areas of future potential procurement challenge.

The GPJRA will, from no later than April 2019, give tenderers the right to:

• make a complaint to the accountable authority (ie Secretary or Board) of an Australian Government (Commonwealth) agency about an alleged contravention of the rules set out Division 2 of the Commonwealth Procurement Rules (CPR) (ie the covered procurement rules); and if not resolved,
• apply to the Federal Court (or Federal Circuit Court) for:
  • the grant of an injunction; and/or
  • an order for compensation for a Commonwealth agency's contravention of those rules.

In this article, the first in a series, we examine the recent English decision, Lancashire Care NHS Foundation Trust & Ors v Lancashire County Council ¹ (Lancashire Case). The Lancashire Case serves as a reminder that, even with well-drafted documentation, a procurement can be derailed, and successfully challenged, as a result of what goes on in the evaluation room.

Lancashire Care NHS Foundation Trust & Ors v Lancashire County Council

The Lancashire Case concerned a tender process by Lancashire County Council (Council) for the provision of community nursing services for children and young adults. The total value of the procurement was £104 million.

The Applicants, the Lancashire NHS Foundation Trust and the Blackpool Teaching Hospital NHS Foundation Trusts, were the incumbent providers of community nursing services to the Council. The Applicants were runners up in the tender process, having lost by two points to Virgin Care Services Limited (Virgin).

The Applicants argued that the Council's decision to award the tender to Virgin was in breach of the PC Regulations, insofar as it failed to meet the required standards of transparency, non-discrimination and equal treatment. The Applicants alleged, among other things, that the Council's evaluation departed from the process set out in both the tender and in the evaluation instructions provided to evaluation panel members.

The court agreed. Aspects of the evaluation causing the court particular concern included:

• As with many tenders, evaluation was first undertaken by each member of the evaluation panel on an individual basis, with the panel then convened to moderate and agree on a consensus score. While the evaluation panel reached a consensus on the score to be awarded for each evaluation criterion (Combined Score), the panel did not attempt to articulate its combined reasoning for awarding the Combined Score, instead listing a range of positive and negative points about the tenderer's response. As a consequence, the court found that there was "not necessarily or even probably congruity of reasoning" as between evaluation panel members in relation to the Combined Score awarded. In the court's opinion, it was likely that each evaluation panel member had a different reason for agreeing to award that Combined Score.
• The evaluation panel did not appear, during the moderation session, to have applied a consistent approach to the discussion of each tenderer's response. This made it difficult for the court to determine whether each evaluation sub-criterion had been considered for each tenderer during the evaluation.
• The evaluation instructions were not followed. The evaluation instructions provided to the evaluation panel stated that the Chairperson would "ensure all evaluation documents, including all evaluation comments, justifications, marks and amendments are fully documented and agreed by both the panel members and the Chairperson". This did not occur, meaning that there was nothing to confirm that the scores recorded in the moderation documentation reflected the scores agreed.

Insights for Commonwealth agencies

To reduce their potential exposure to risk under GPJRA, Commonwealth agencies undertaking covered procurements should focus not only on ensuring that their approach to market and evaluation documentation is clear and conforms with the CPRs, but also on preparing for evaluation. The focus should be on the procedural aspects of evaluation, and on its human factors – that is, on the tender evaluation team charged with following the procedure developed and set out in the evaluation plan.

Agencies should consider:

The proposed composition of the tender evaluation team

Tender evaluation teams sometimes comprise stakeholders with an interest in the outcome of the procurement, but with little experience of the procurement process. The Lancashire tender evaluation panel, for example, comprised a number of health service staff members with limited exposure to procurement. This may have contributed to the deficiencies in the evaluation identified by the court. Ideally, all tender evaluation team members should have some understanding of both the broader process in which they are involved; the role of the evaluation team; and their role as a member of that team.

Where there are variations in evaluation team members' experience, agencies can address these by:

• appointing an experienced Chair to lead the tender evaluation team;
• providing training to less experienced team evaluation team members prior to the commencement of the evaluation; and/or
• having a legal or probity adviser attend the evaluation as an observer to answer process-related questions as they arise.

Tender evaluation team dynamics

Interpersonal factors (eg friendship or hostility between team members) may impact on extent to which an evaluation team follows (or is capable of following) the process described in the evaluation plan. Differences in communication styles can also play a part in the successful or failure of the evaluation – an experienced Chair should be able to ensure that all team members have the opportunity to discuss their views in a respectful and tolerant manner. The evaluation plan should clearly identify the role played by members of the evaluation team, with the Chair's role similarly identified. The Chair should have the power to escalate conflicts, so that if these arise among evaluation team members, they can be managed.

Footnote

¹[2018] EWHC 1589 (TCC) 22 June 2018

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.