We review a recent case in which the court set aside an authority's contract award. It emphasises how important it is for authorities to adhere to the applicable guidelines. We also flag up the new ICE guide on procurement, commercial and contracting key principles and Neil Cuthbert's recent article on Public Private Partnership projects.
Transparency and the importance of being able to provide reasons for rejection
In Lancashire Care NHS Foundation Trust and another v. Lancashire County Council [2018] EWHC 1589 (Bailii), the court set aside the Council's award of a services contract to Virgin Care Services Ltd which effectively rejected the tenders of the two claimant NHS Trusts' tender. The Council was in material breach of its obligations for failing to give reasons that were sufficient in law to explain its scores for the quality evaluation of the tender.
The Trusts had challenged the Council's evaluation of their bid, the scoring mechanism and the transparency of the process. The judge, emphasising that transparency was central to public procurements, considered the Council's approach to the procurement process which had been conducted under the "light touch procedure". He reviewed the relevant legal principles and the judge's analysis of the regulations and law (including Regulation 76 of the Public Contracts Regulations 2015 and procurement law generally) will be useful for all those involved in the evaluation process. He endorsed the principles in Lion Apparel Systems Limited v. Firebuy Ltd [2007] EWHC 2179 (Ch) such as the need to treat bidders equally and in a non-discriminatory and transparent way, to be guided only by economic considerations (as intended by Directive 92/50/EEC and relevant regulations) and to ensure the criteria used by the authority is transparent, objective and related to the proposed contract. He also endorsed the principles set out in Mears Ltd v. Leeds City Council [2011] EWHC 1031.
The judge highlighted the evaluators' failure to review all points in the tender systematically; the failure to check that they had covered everything in their discussions; and the lack of a comprehensive or clear record of their discussions and their reasoning. He also regarded some of the evaluators' evidence about their observations on their original scoresheets as "plainly reconstruction" (as opposed to recollection). As a result of these shortcomings, the judge could not evaluate the weight attached to particular comments in the Council's discussions or to what extent the panel had agreed about the points made. He was also not satisfied that the points recorded were the only factors taken into consideration in reaching consensus on the tender scores.
The judge concluded that the records did not provide a full or accurate account of the reasons or reasoning that led either individual panel members or the panel as a whole to reach their conclusions. Worse, the evaluating panel had not complied with the obligation set out in their tender panel guidance to fully document and agree the evaluation documents.
Remarking on the prescience of the applicable guidance, the judge pointedly quoted from it as follows: "by observing and implementing these guidelines, the evaluation panel will ensure that the tender evaluation process has been undertaken in an open, transparent and compliant manner. This will reduce the risk of complaints and legal challenges which are very time consuming and costly."
In this case, the guidance was ignored. In consequence, the Trusts started proceedings to challenge the award triggering the automatic suspension of the award ... and the award was set aside.
Awarding authorities must stick to the applicable guidelines, comply with the relevant criteria and applicable law in making the award and be able to provide their reasons for rejecting an unsuccessful tenderer's application.
" ... a procurement in which the contracting authority cannot explain why it awarded the scores which it did fails the most basic standard of transparency." (See paragraph 54 of the judgment.)
New ICE guide on procurement, commercial and contracting key principles
The Institution of Civil Engineers (ICE) has published a best practice guidance note for clients on procurement, commercial and contracting key principles. Prepared by the ICE's Procurement Advisory Group, the guide aims "to help public sector clients and stakeholders to understand the key principles that support successful procurement". These principles should also help those in the private sector.
Public Private Partnerships (PPP) – the new paradigm for Chinese companies funding African infrastructure projects?
Neil Cuthbert briefly looks at what PPP projects are; how key risks associated with PPP projects are typically allocated among the principal project participants; how the emergence of PPP projects in Africa and the increasing external funding problems in many African countries will make PPP projects more or less prevalent; and lastly whether there is a hybrid PPP model that cash strapped African governments can consider. Click here to read the article.
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