Alexi Markham: Hi good morning everyone, I think we are just going to give it a couple of minutes to make sure that everyone can join before we kick off. Right I think we will probably get started now then. So good morning everyone and welcome to our Autumn ThinkHouse public sector programme. I am Alexi Markham and I sit within our government team based in London and chairing today and this is the first of three live webinars that are taking place this week and they are specifically designed for people that are operating in the public sector both in the commercial teams and the legal teams. The second session is taking place tomorrow in the same forum and at the same time and tomorrow we are going to be speaking to two of our litigators, Patrick Arben and Susan Fink about that not stressful period at all when you are seeking to make or lift an automatic suspension. The third session is at the same time and again the same place on Thursday and that is more of a complex practical session. We have got the co-leader of our government practice, Robert Regen who will be joined by Fiona McLagan who is the head of procurement at the Birmingham Organising Committee for the 2022 Commonwealth Games and they are just going to be talking about some of the practical aspects of public procurement.
So onto today's session we have our resident procurement expert joining us, Christopher Brennan and Chris is going to be providing us with a roundup of recent procurement case law and highlighting some of the practical take away points. I think Chris you have got a bumper eight case tasting menu for us today so plenty of grounds to be getting through and there is some really interesting topics in there, both from the supplier side and the authority side. Because we have got quite a lot of ground to cover I would ask that if you have questions or observations as you go along that you put them in the chat function using the Q&A at the bottom of the screen and if we have time at the end we will seek to sweep some of those up but if not we will circulate answers after the session. Also just to flag the sessions are recorded so if you need to drop off early it is not a problem, or equally if you want to share sessions with your colleagues afterwards then you will get a link to the recording of all three sessions next week. Ok and I think that is it and without further ado I will handover to you Chris.
Christopher Brennan: Thanks very much Alexi. Hopefully everybody can hear me ok. Yes I am going to be taking you through, as Alexi said, a little taster menu of about eight cases today. Not all of them are absolutely recent. To be quite honest there have not been too many really recent, really interesting cases in public procurement so those that I have selected are really cases which are all relatively recent, one or two are actually very recent but all of them have I think very relevant and practical messages to communicate to those on the coal face of public procurement in one way or another. So hopefully everyone will find them relevant. Of course they have not gone away just because they might not be in their first flush of youth, the messages that they send out are still highly relevant and so to the extent that any of them are a little older than others the messages and the learnings from them they send out are still very much there.
So the first case, which actually is a recent one, is this one. It is called Bechtel Limited against High Speed 2 Limited or HS2 and as I am sure you are all aware it relates or will have guessed it relates to part of the procurement of the High Speed 2 programme. And in fact it related to the construction partner contract for the delivery of Old Oak Common station in North West London, Willesden. Judgment in this case was handed down 4 March so it is relatively recent. The fact that the relevant regulatory framework in it was not the public contracts regulations, it was actually the utilities contracts regulations does not matter for these purposes because the learnings from the case are of just as much relevance in public sector procurement as in regulated utilities procurement. The contract value as one might well guess was pretty massive, a billion pounds as a target incentive cost. The winning bidder was a consortium of Balfour Beatty, Vinci and Systra or BBVS and I suppose the perfect recipe for a procurement challenge was there really from the moment the result was announced because Bechtel the challenger was a very close runner up and as often happens when someone is the very close runner up and it is a big procurement there might be interest in seeing whether or not it was all hunky dory. Those are percentages in terms of difference between scores. So Bechtel sure enough mounted a legal challenge and in its challenge it made certain allegations around the result.
First of all that there had been manifest errors in the scoring. That is actually a reasonably common ground for challenge in a case like this because if a disgruntled close runner up can point to something that it considers a manifest error in the way that the scores are actually arrived at then if the challenge succeeds it might not take much to sway the result in the challenger's favour. So Bechtel here alleged that BBVS should have scored lower in certain questions and Bechtel should have scored higher.
Secondly, unequal treatment, Bechtel claimed that the BBVS bid was actually abnormally low and ought to have been disqualified so as a result the authority had acted unreasonably, HS2 had acted unreasonably, or rather unequally in rejecting Bechtel's bid.
Breaches of transparency or good and/or good administration as a matter of public law was also trained as a result of supposedly inadequate records of the evaluation and moderation processes and one thing actually which that reminds us of is that in very many cases, most cases in fact, a challenger to a procurement is likely to ask to see or to have disclosed to it records of individual evaluations and the whole moderation process as part of its challenge. One can expect these days to see that happen and to have to comply with any request in that direction.
Material changes to the contract post tender were also alleged, as was a breach of the general duty of good administration in the sort of public sector sense.
Now the result was not particularly favourable to Bechtel. Why not? Well in fact Bechtel's claim failed rather spectacularly because what the Judge found was first of all that there were no manifest errors by HS2, there were no other breaches of obligations of equal treatment, transparency, good administration and so forth and that in fact Bechtel had failed to establish that any of the evaluation outcomes were in error at all, let alone manifest error as is the test for this sort of challenge in public procurement.
HS2 had the power to reject an abnormally low tender as is the case generally but was not obliged to do so and this learning comes actually from a case that we will look at in a short while, the SRCL case. That case was decided under the public contracts regulations but its principles apply here. No actual obligation to reject a tender which appears abnormally low.
There was an isolated failure in respect of record keeping but interestingly that did not help Bechtel out either, it had not actually caused any loss to Bechtel and interestingly moderation notes in a procurement exercise do not need to be verbatim so as long as they sum up decision of the moderation reasonably well I guess that is ok, they do not need to be verbatim accounts of an evaluation or moderation process.
The post tender contract changes which Bechtel pointed to were not a lot to shout about and there was no duty of good administration which applied in the public procurement context of the basis that first of all this is a point specific to the utilities regulations, there is no obligation in good administration inherent in the utilities contracts regulations so we know and also no authority for imposing such an obligation on a contracting authority. So really where it comes to the obligations contained in the UCR and indeed also the PCR we know that regulation 18 imposes duties of equal treatment transparency, non-discrimination and proportionality but not good administration as a matter of public law. I suspect that good administration would be expected perhaps as an adjunct to complying with the generally applicable principles which do apply in public procurement but it is at least as well to know that there is no general duty of good administration sitting alongside them in the regulated procurement context.
What about Bechtel's tender? Well, it has qualified its tender and that is interesting because in fact what Bechtel tried to do was to change the fundamental allocation of contractual risk which in fact also had a stab at the heart of HS2's commercial strategy. So it was in that sense slightly rich of Bechtel to challenge when ITT have actually tried to do that. The ITT itself had reserved the right for HS2 to reject a tender which contained unacceptable qualifications and therefore HS2 were not prepared and were right not to be prepared to accept Bechtel's intended qualifications. In fact HS2 asked Bechtel to withdraw them, however the qualifications remained in place. Therefore, said the Judge, HS2 have the right to reject Bechtel on this basis during the procurement and HS2 not only have the right during the procurement but also retain that right after the conclusion of the procurement and was able to therefore rely on it in the proceedings. And so Bechtel's bid could in fact have been disqualified simply by reason of the qualification that it contained to the tender and indeed even if Bechtel had won over all it could still have been disqualified by reason of the existence of the qualifications. So the learning that comes out of that for us is that it is a good thing for contracting authorities to reserve the right to reject either during a tender process or indeed after it to reject qualified or equivocal bids it is a good way of allowing authorities to ensure that they remain in control of procurement processes and can therefore tackle challenges like this one head on should they arrive.
No procurement of course is ever perfect and in fact there is a helpful little remark by the Judge here:
"to this effect it might be thought that procurement law imposes a Counsel of perfection and any failure to achieve perfection will result in the Court's interference that would however not be an accurate description of what procurement law actually requires and it's not the approach that the Court has adopted in this case."
So words I think perhaps of comfort here for contracting authorities, that is not to say of course that the rules and principles do not need to be complied with, of course they do, and a good audit trail is also very important particularly of course for the evaluation and moderation but remember you do not need verbatim notes. And as I have already said the position or treatments of qualified tenders it is a good thing always to set that out because sometimes if that does not happen we have seen it in the past that it actually rather leaves contracting authorities with nowhere to go and so a roadmap through in the procurement documents to what to do with qualifications to tenders is always to be recommended. That is all I was proposing to say on that case.
Moving slightly further back in time, although still relatively recent, back to 2017, another case the MLS case against the Ministry of Defence. This case is all about pass/fail criteria and shows how one always needs to be very careful in how one deals with, and indeed says that pass/fail criteria are going to be dealt with in documentation. The facts of this were that it was a £350 million procurement for various maritime services for the Royal Navy. The Claimant scored the highest in the procurement and actually represented the most economically advantageous tender and it was the incumbent. However, it was excluded and prevented from winning the contract as it had failed a past fail question which happened to be about ensuring the safe working culture all the way down the supply chain.
Now, having been rejected for that reason it challenged the decision of the MoD and it did so prior to the award and it did so for the following reasons or on the following grounds. It said first of all the ITT was ambiguous as to the consequences of a fail mark in response to a particular question or in response actually to this particular question. Next it said that MoD was not entitled automatically to reject its tender just because it had happened to fail one question and that in having failed it on one question MoD had breached the principle of transparency. So what did MoD say in response to those claims?
First of all it said that there was no express statement in the ITT but the consequences of a fail would be the rejection of tender but despite that it should have been apparent to any reasonably well informed and normally diligent or ARWIND for short bidder from the ITT that failing this particular supply question would lead to either the automatic rejection of the tender or at the very least the discretion to reject the tender which MoD said that it had had and exercised.
So what did the Court do? It looked at the ITT and it found that the supply chain question was in just one category of six categories which were listed, five of which made it clear that failure to achieve a standard of good competence or more would result in rejection but there was a sixth area as well and in fact it was in the sixth area that the offending question fell. So the sixth question area which covered the safety culture down the supply chain issue was not part of that list so there had been maybe an oversight, maybe the intention had been that it should have been part of the list, or maybe something somewhere had just got lost in translation. But anyway it had not ended up part of the safe list if you like and as a result the Court found in favour of MLS and its reasoning here was that the reasonably well informed and normally diligent tenderer would not have understood from the face of the ITT that a fail on this particular question, on the supply chain question would result in rejection. So had this question been in the category of the other five there would not have been a problem but the fact that it was not , the fact that it was in the sixth category meant that there was a problem and therefore it would not have been clear to the reasonably well informed bidder that the result would be an automatic rejection.
So the reasonably well informed and normally diligent tenderer test is worth remembering because it applies to every procurement. The criteria and their scoring methodologies have to be clear enough to enable any reasonably well informed and normally diligent or ARWIND tenderer to interpret them in the same way. So that test imposes quite a high standard on authorities to get wording really good and clear. And not only that, but the principles of equal treatment and non-discrimination and also transparency require authorities that have adopted a decision making procedure for assessing bids, which is going to be the case in any procurement, to comply with that decision making process, the procedure that they have selected and implemented for themselves. An authority that has set rules for procedure has to follow them, applying those rules in exactly the same way to the various different bidders. Changing the decision making procedure during the process of assessment risks arbitrariness and favouritism. So that was cited from the Nuclear Decommissioning Authority case which had been a previous and fairly momentous decision. And so those were the learnings from MLS. Remember the ARWIND test and also make it very very clear what the consequences of a fail will be and if in doubt rehearse it. If in doubt, model it, think about what the consequences of failing a particular pass/fail question are going to be.
The next case is one of abnormally low tenders and actually it is quite a good case because it is also a good case on TUPE and on the application or operation of TUPE in public procurement exercises and why it is always good to be clear what the authority thinks the TUPE position is or might be or indeed might not be when it comes to a public procurement. It is the SRCL case. SRCL against NHS England.
Now just by way of a bit of background because it is a fairly hefty decision. Where you have an incumbent and the incumbent bids on a contract which is a re procurement of contract that the incumbent has just been performing. When the incumbent is unsuccessful, that often brings the greatest threat of a challenge because they might be set to lose what could be their core business flowing from that contract. And this case actually highlights some dodgy tactics as it happens that an aggrieved incumbent might deploy and authorities might therefore do well to be aware of when the unsuccessful incumbent brings challenge. And it might well be the case that in today's straightened markets and perhaps abnormal even conditions authorities might need to be alert more of this sort of thing than might previously have been the case.
This case was a procurement for clinical waste disposal services. It was actually a call off a mini competition under a framework agreement and the way the framework agreement worked was a little bit complicated. Successful bidders were appointed to the framework, that allowed them to enter into mini competitions and mini competitions could include reverse auctions where basically prices were then sort of bid down at the mini competition stage. And these competitions were designed with different wave numbers and each wave consisted of different lots, it was a fairly complex set up. When tendering in a wave auction each bidder was required to bid a single lump sum for a basket of representative services within that wave, so a complex but not altogether uncommon model. What then would happen is that a bidder who was successful on that wave would then have to submit a breakdown of how its overall winning bid cost was calculated. That would then require that bidder to identify a specific price for each item in the basket and the lower rate would then be charged in the contract. So what the result of that was, was that the price that had been tendered at framework stage was then at upper ceiling for the rates on particular items at the top. The supplier successful at the auction was required to honour any lower rates of course applied to the item when it won the contract for that wave and therefore the mini competition was harnessed as a way of driving lower prices through via this effective reverse of bid mechanism when it came to actual mini competition. So altogether a fairly effective you could say way of setting things up.
Now SRCL challenged because it was unsuccessful in its auction bid on wave 6. Now at wave 6 it had bid £479,999. The winning bid was quite a bit lower, it was £310,000 and the next lowest, so the under bid was £313,000. So it was a lot more expensive than winner or runner up.
So what did SRCL do or say? Well it claimed that the winning bid and the runner up were first of all abnormally low and that NHS England had had an obligation to require an explanation for those low prices. It also said that the way NHS England had dealt with the costs of complying with TUPE in its notification to the bidders prior to the auction had been unlawful, and we will come onto TUPE in a moment or two.
Now a slight problem for SRCL here was that when it challenged, when it mounted its legal challenge it was out of time.
However, quite helpfully for us as observers the merits of the challenge were still considered by the Judge and as a result of that do provide some useful guidance for us and you on subsequent procurements. So what did the Court find?
First of all the winning bidders and runner up were not actually abnormally low. There was no positive obligation on NHS England to investigate any allegedly abnormally low bid, think back actually to what we were saying previously on the Bechtel case there but it was not the Court's function either to substitute its own view on whether a bid was abnormally low for the view that the authority had come to. Good.
Secondly, Courts are not going to re-mark every procurement that gets challenged and it is worth reminding ourselves that insofar as attributing a score or a mark to a particular question is a matter of judgment for evaluators and therefore evaluators and authorities in this respect have a margin of discretion. Evaluators can apply their professional judgment in awarding a particular mark or passing or failing a particular response to a question and so unless that tips into manifest error territory the Courts are not going to get involved, they are not going to interfere with the discretion with the margin of judgment that evaluators have.
But then it gets interesting because the Court found that SRCL had consciously decided to fix its margin artificially high in order to make other bids look abnormally low. So where have we seen this before, how often does that happen I wonder.
NHS England had not encouraged bidders to submit prices on the basis that TUPE would not apply, in fact what NHS England had stated in relation to TUPE was that any costs arising from the operation of TUPE if indeed TUPE were to operate would be borne by the successful bidder. Now as it happened SRCL being the incumbent on this particular contract would benefit because it would not have any TUPE costs to factor in and in fact not only that but SRCL had actually decided to produce misleading information on the extent of transfers likely to take place should the contract be handed to someone else thereby overstating the extent of the TUPE expose likely to be inherited by a winner. So another learning point for authorities here, make sure as far as you can that when an incumbent contract is coming to an end you have the incumbent on the hook to give fair and accurate and not misleading representations of the extent of any likely TUPE transfers. If you are a bidder do not try to game the system like this.
Now as it happened SRCL's tactic was harmful because it ended up deterring one framework provider from actually bidding on wave 6 at all and so that particular provider refrained from bidding because of the information that SRCL had presented. However, it did not prevent the successful bidder and the under bidder from bidding because they were wise to the ploy.
So SRCL clearly failed in its challenge but the learning points I think just to sum them up are first of all authorities need to be aware of bidders gaming the system. Try to, if you are an authority looking at re‑procuring the contract where there is an incumbent who might re-bid, think very carefully and make sure that your contracts include provisions obliging incumbents to hand over accurate TUPE information. Also in the SRCL case which is worth having a read of the judgment replicates or it actually sets out the wording which the ITT gave in relation to the operation or otherwise of TUPE and it is actually very good wording, it is actually quite long so it is not on the slide here but it is very good wording because it actually is very good at making it clear that bidders have to draw their own conclusions basically from the information presented as to whether or not TUPE is likely to apply. So it is worth having a look at the judgment just for that wording.
If you have seen examples of sharp bidder practice try to have a think about how they might be able to be designed out of a procurement if you can possibly help it. There probably was not much more that NHS England could have done here because it was a pretty good system that it had of designing out that sharp practice. It still happened but if you can or are aware that bidders might game the system it is worth having a think about that.
Reverse auctions might be a good idea where you have got separate lots. It simply is a way of increasing value for money by driving down prices at call off stage and as we have said a good TUPE provision in an ITT will go a long way. That was all I wanted to say about that.
Another case which is I think topic of the month in many respects is incumbent advantage so I think SRCL has segued onto this quite neatly because this is a case, it is a European case but actually its learnings are of good application here and now. I suppose as a reminder on the inherent advantage that an incumbent might have and of the fact that it is not always a great idea to try and do very much neutralise that advantage. So there have been a number of cases in the past, going back quite a few years really on incumbent advantage in the public procurement and it all starts off with the fact that the duty of equal treatment requires authorities to treat equivalent situations equally and different situations differently. What the duty of equal treatment does not mean is treating absolutely everyone and everything identically all of the time, really important.
Now the duty of equal treatment includes a duty to level the playing field as far as possible as between candidates in the procurement but the law recognises through the case law that in many cases an incumbent will enjoy an inherent de facto advantage and there is really not much you can do about that. There are a lot of cases, well quite a few anyway, a number of the early ones are conspicuous by the fact that the claimant was the same, a Greek company called European Dynamics. There are later cases as well; the latest of which is the Proof IT case which we are about to look at.
Now the upshot is that authorities have to try to level incumbent advantage as far as they can but only where it is straightforward to do so, economically acceptable whatever that means and also does not deprive the incumbent, does not artificially deprive the incumbent of the natural benefits which that position puts it in, or gives it.
So a few years ago there was a Northern Irish case called Natural World Products in which the Judge accused the authority of trying to overly level the playing field and to basically get rid of the inherent de facto advantage that the incumbent happened to enjoy and the remark of the Judge in that case is actually quite memorable, he said in bending over backwards to be fair to all the incumbents the authority disadvantaged the incumbent. So in reality most situations will require some levelling really in terms of ensuring that other bidders have access to the same sorts of information about the opportunity and about the contract as the incumbent does, but only to the extent that I have outlined.
TUPE advantage, again as we have seen today, will not be possible to level out and as regards other types of advantage the authority is going to need to be careful to respect certain information for example, confidential information, information that might be proprietary to an incumbent. It certainly would not be a good idea to try to over level the playing field by sharing that.
So Proof IT last two or three years deals with the question of the extent to which the playing field has to be levelled between a retendering incumbent and new bidders. Proof IT was a new bidder in the re-procurement of IT services for the European Institute of Gender Equality (EIGE). I was not even aware that such an institute existed until I, this case. The incumbent was also retendering and it won, now Proof IT claimed that the EIGE had used undue discretion in awarding higher marks to the incumbent because of the knowledge it had gained, the incumbent had gained that is, in operating the contract and it also claimed that secondly there had been favouritism to the incumbent, it said the tender represented deep understanding of the objectives of the framework contract that is at the same time holistic and highly specific, so Proof IT took that evaluation criterion and said ah ha, this shows that you are unduly favouring the incumbent by having that as an award criterion.
What did the European General Court in this case say? First of all any advantage for the incumbent was not caused by any particular conduct on the part of the EIGE. Secondly an incumbent will inevitably enjoy an inherent de facto advantage picking up those previous cases whenever a contract is re-procured and an incumbent retenders. There is really not a great deal that one can ultimately do about that. The authority could only eliminate that advantage altogether by excluding the incumbent which would discriminate against the incumbent and would therefore breach the treaty principles and by the way the treaty principles still exist in our domestic law now in the form of Regulation 18 of the Public Contract Regulations so the points here still apply in the new world.
So the learnings from this case are first of all remember what equal treatment is not, it is not about treating anyone in an absolutely identical manner, that might actually violate the principle rather than respecting it. Instead it is treating equivalent situations in an equivalent way and different ones differently. And therefore in the incumbency situation it is all about recognising the slightly different positions of an incumbent and of a new bidder and not skewing back the playing field by positively discriminating in favour of new bidders rather than incumbents, but of course it is about making sure that information is levelled out to the extent that it is reasonably possible to do so and does not start breaching confidentiality and so on and so forth.
So a good case really from which to take some learnings on how to deal with incumbent advantage and what not to do in an effort to try to level it.
Next case, moderation following evaluation of bids, so really well actually there is probably something evaluation and moderation in here but there is quite useful learning on moderation following evaluation of tenders in the procurement. It is the Lancashire Care case from again two or three years ago.
The facts of this case were first of all that this was a procurement for a contract for the provision of public health and nursing services to children in Lancashire. The trusts were the incumbent providers. The trust, the claimants were the incumbents and the trusts lost the tender, lost one to Virgin Care by again quite a narrow margin. Bid prices were almost identical so again possibility quite fertile ground for at least an attempt to have a challenge. The remaining margin of 4% on the quality evaluation represented just two marks in that evaluation to two bids before the relevant weightings were applied so again may be some learning here about whether there is anything that can perhaps be done to try and stretch apart in scoring methodologies the potential for very close bunching of scores to happen because where as I said very close bunching does happen it might start pushing up the changes of at least somebody trying to have a claim.
So the trusts challenged the award to Virgin; in so doing they triggered the automatic suspension. The application on the part of the council, the county council to lift that suspension did not succeed. In essence what the trusts were challenging was the council's evaluation of the bids, the scoring methodology that had been applied and the way that it had been applied and ultimately transparency of the award criteria. They sought, well what they asked the court to order, was that the award decision in favour of Virgin should basically set aside and that the trusts instead should be awarded the contract and they also claimed damages.
The court's decision was interesting because basically it decided the reasons given by the council for the scores awarded to the trusts and to Virgin for quality questions were insufficient in law. In other words they were insufficiently clear to explain the basis for the scores that had been awarded and as a consequence the decision of the council to award the contract to Virgin had to be set aside.
Now the court did not go near the issue of manifest error in the evaluation of either set of bids without conducting a full remark which in this particular instance the court was not going to do, but what the court did do was criticise in fairly robust terms the moderation process that had been carried out in awarding the scores.
The faults that were identified during moderation, first of all were these: first of all there had been a discussion on each question in a set order initiated by reference to comments both positive and negative from the evaluators and not by the reasoning behind each score. Secondly the moderation notes did not actually show, did not make clear, that express consideration of each point as required had actually been undertaken. No records were made of a consensus scoring process including off key points which were considered influential. The evaluators had not signed off consensus scores which were something that had been provided for in the process. Fifthly having considered what they were going to say in standstill feedback, what the evaluators then did was went back and either deleted or overwrote their original comments to take account of some positives. So there were various irregularities which left it, I suppose which left the audit trail obfuscated and ultimately meant that when challenged the authority could not actually explain why from the audit trail that was left, it had awarded the scores that it had to particular questions in the tender responses.
So the criticism that the Judge levelled at this was this: he said in the procurement in which the contracting authority cannot explain why it awarded the scores which it did, they lost the most basic standard of transparency; there was no consistency of approach in recording moderation of different questions, it was apparent that the scoring might actually have been done by comparing the trust's answers with Virgin's rather than comparing both bids against the award criteria evaluating against the specific award criteria. The list of negative and positive points that was included was not an adequate record ultimately of the panel's reasoning. The authority had furthermore failed to follow its own guidance, the evaluators did not actually end up agreeing moderation notes and in fact there had been backdating of notes which the court described as an understatement because in fact the council had described this as merely a regrettable episode of poor administration so no backdating please.
So the learnings from this are that first of all where a protocol is set in tender documentation for evaluation and also moderation those protocols have to be adhered to rigorously. Meetings of procurement evaluation panels are solemn exercises of critical importance to economic operators said the Judge and the public and must be designed, constructed and transacted in such a manner as to ensure that full effect is given to the overarching procurement rules. In other words it is all about transparency, it is all about setting rules for oneself and then following them through and doing what has been explained to bidders, so that ultimately what you have as an evaluation panel and as a contracting authority if you are one, is a robust set of reasoning that can explain exactly and precisely why scores were awarded as they were to each question and that you can still at least remember six months down the line in the event of a legal challenge.
And here are more learnings, evaluators need to understand how to score and apply the criteria themselves, so it is not just about the criteria of being clear to bidders, they actually also need to be clear to the evaluators, moderation should proceed by reference to pre-established scoring criteria and not to the bid next door, must not be a form of negotiated compromise, must record full transparent and fair summaries of the reasons leading to consensus scores by reference to the scoring criteria and as I have said do follow the stated process.
Next case is one on advertised scope, AW Europe against Basingstoke Council. This is around where a contract notice and advertisement state the scope of a particular project in a particular way and then for some reason the project might depart from it. This was a development agreement to redevelop a leisure park in Basingstoke. The contract was awarded, AEW the claimant had not actually responded to the notice, only NR Leisure, the successful bidder submitted a final bid, the development agreement provided for a very large scheme, rather larger than the one that had appeared to be envisaged by the original tender notice, because there was lots more added into the scheme really.
AEW claimed that the awarded scheme was so different from the advertised scheme, which had appeared much smaller, that the scheme that was awarded effectively had not been advertised at all. What did the court decide? There was nothing in the public contracts regulations which covers the situation where there is an OJEU notice but the awarded contract exceeds the scope. The court still found a sufficient and close connection between the OJEU notice and the awarded agreement which might perhaps seem slightly surprising if the scope had increased as much as had been claimed but there we are.
Ineffectiveness is not available where an effective notice has been published and which has initiated a competition where that notice related to the procurement procedure and the outcome, but the learning, the big learning from this case is actually really from what the court did not say rather than what it did which is that the court did not decide that ineffectiveness is only relevant where an authority fails to call for competition at all. This appears to confirm along understood requirement for a sufficient and close connection between the OJEU notice and the resulting contract because if the resulting contract lacks that sufficient and close connection then even if there has been an advertisement it might still happen that the contract is susceptible to ineffectiveness, if that sufficient and close connection is not there.
A couple of cases just to finish off with because we are running very short of time. A case on abandonment, this is one where an NHS trust abandoned a procurement, a bidder was part of a group which included the company that had supplied cladding to the Grenfell Tower. The trust abandoned the procurement for various reasons; nothing to do with the fact that there was a bidder in that situation. Ryhurst, bidder in question, alleged that the real reason was Ryhurst's Grenfell connection. What did the court decide? There is a broad discretion to abandon, subject only to the Regulation 18 of contract regs, abandonment decisions need not be limited to exceptional circumstances. In principle an authority could decide to abandon a procurement by reference to reasons connected with a particular bidder or individual circumstances of a particular bidder, as it happens, but in any event it is necessary to consider whether the decision to abandon would run contrary to the fundamental principles of transparency, equal treatment etc. which have to be determined with a close focus on the individual fact of the case.
So the learning there is that an authority could be challenged as it had been in Amy for abandoning a procurement where the reason to abandon is not transparent, but otherwise there is actually quite a wide discretion to do so and that discretion could be connected with the circumstances of a particular bidder.
So finally, the Denmaster case, this is about the situation where a tenderer fails to submit a tender correctly. It was a demolition contract, Denmaster the hapless bidder tendered. The tender contained missing information and a sheet that was blank. As a result the tender failed, it was not accepted. Denmaster claimed that proportionality meant that its tender should have been accepted on the grounds that its errors were obvious, they were easy to correct, the information could have been objectively shown to pre-date the tender deadline, there was no statement that the application would be rejected unless documents were provided and the request would not confer any undue favour or disadvantage on anyone else. The council argued that there had been a basic failure to comply with the rules of the tender and there was no general duty to allow correction. What did the court decide? No duty to allow correction.
The decision is handy because it sets out the two criteria which apply when answering the questions should a later on incomplete tender be admitted or should it not? In order to avoid violating equal treatment first of all any documents requested after a tender deadline must objectively be able to be shown to pre-date that deadline. Second the documents must not expressly say that a tender will be rejected if the documents in question are not provided. If it does say that the authority cannot request them and then accept the tender. On these facts neither condition was satisfied and any right to clarify was limited to merely resolving ambiguities and these were rather more than just ambiguities.
Stop press. With effect from 1 January 2022 the public procurement thresholds are going up as shown on the slide. One point here just to note at the moment thresholds are calculated net of VAT, with effect from 1 Jan the new regulations that implement them will set them inclusive of VAT. Procurements which have started before 1 Jan are unaffected and that is all I was going to say for now.
Thanks very much.
Alexi: Thanks Chris that was really helpful. There are some really good insights there, I think particularly for me around the ever prevalent challenge of dealing with incumbent advantage. We are bang on time so I think we have run out of time to answer any questions but we will come back and circulate answers to the group and we hope to see as many of you as possible tomorrow at our session at 11:00.
Thanks.
Chris: Thank you very much everyone for listening. Bye.