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Procurement Challenges - a step change?

on Thursday, 27 August 2015.

The fast moving pace of procurement litigation continues with what is a key decision in Woods Building Services and Milton Keynes Council.

The Court has set aside a contracting authority's putative award decision on the basis of the manifest errors in the process, with the Court substituting its own scores for the scores awarded by the contracting authority.

The case highlights the Court's interventionist approach and the scope of remedies available to it.

Background

The Council ran a procurement process for a 4 year asbestos removal and reinstatement services framework. Woods was an incumbent supplier and was unsuccessful in its tender. The Council completed its evaluation and proceeded to award the framework to European Asbestos Services (EAS). Woods challenged that decision on various grounds, including that the evaluation process was unfair; that the Council had made one or more manifest errors in the evaluation of the tenders; and, that the Council was in breach of general Treaty principles of equal treatment and transparency and in breach of the Public Contracts Regulations 2006 (the Regulations) which applied to the procurement process.

Woods submitted the lowest cost tender and was unsuccessful by a narrow margin on the quality criteria. The Court reviewed the Council's tender evaluation and the scores given to both Woods and EAS for their answers to the 12 quality questions to determine if the Council had made manifest errors in their evaluation of the tenders.

On a review of the evaluation the Court found that the Council had erred in the marks that had been awarded to both Woods and EAS to the extent there had been a manifest error. Furthermore there had been a failure on the part of the Council to explain how, for certain questions, EAS had been awarded higher marks than Woods when it was clear that EAS had failed to answer significant aspects of the questions and Woods had answered the questions in full. The Court considered that the irrational scoring of the questions constituted a manifest error on the part of the Council. The Court also noted that there was a lack of accompanying documentation to explain and justify the Council's reasons for the scores they had given. The Council was found to be in breach of the general principles of transparency and equal treatment due to the treatment of Woods' response to certain questions. The low scores given to Woods by the Council breached these principles because there was little justification for such a low score when compared with the answers given by EAS.

The Court added that as a result of the Council's manifest errors in the evaluation process and acting in breach of general principles, the scores awarded to both EAS and Woods should be altered. The Court decreased EAS's scores and increased Woods' scores. The Court found that the Council's original decision should be set aside, and the records amended to reflect the Court's adjusted scores. Woods contended that the appropriate remedy would be for the Court to require the Council to enter the framework agreement with Woods.

The Court did not agree. It considered that this remedy would be inappropriate because a mandatory order was not part of Woods' initial claim and that the Regulations did not generally allow for such a mandatory order as a remedy for a successful procurement challenge.

Although inappropriate as a remedy for Woods, the Court stated that in 'exceptional circumstances' it did have the ability to order a contracting authority to award a contract to the successful claimant. This was on the basis that although Regulation 47 of the Regulations did not provide a mandatory injunction as a specific remedy, the rules equally did not prejudice the Court's other powers and that it is within the Court's general power to make such orders when appropriate. The types of circumstances where the Court considered the 'exceptional circumstances' threshold could be reached included the cost of enforcement and the need for constant supervision.

An award of damages was considered to be the appropriate remedy in these circumstances. This would mean that, in practice, the Council would need to pay damages to the losing bidder and incur the time and cost associated with re-running the procurement process into which Woods would be able to bid.

Comment

This case starkly shows how the Court is more and more prepared to substitute its own views, including where necessary scoring outcomes post evaluation, where a challenge is made on manifest error grounds. The Court was ready in this case to intervene and unpick the Council's decision and effectively void the award decision. The importance of logical, transparent evaluation mechanisms and methodologies cannot be overstated as bidders expect the contracting authority to follow the letter of the published evaluation criteria. Where a losing bidder scores low marks, contracting authorities will want to pay particular attention to ensuring that the reasons and commentary given back up these assertions.

Bidders will expect full reasons for the decisions and the marks awarded, so detailed evaluation notes should be kept and translated into standstill letters and bidder debriefs. Whether this forms part of a Regulation 84 procurement report under the new Public Contracts Regulations 2015 or not, contracting authorities will want to heed this judgment as a warning shot that the rationale and methodology of the marks awarded will be under scrutiny in procurement challenges such as this.


For more information or advice on this or any other procurement issue you may be facing, please contact Stephanie Rickard on 0117 314 5675.

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