Friday, April 29, 2016
It has long been established that Contracting Authorities are obliged to inform unsuccessful tenderers of the reasons why they were unsuccessful in their bid for public contracts. While ample European jurisprudence exists relating to this obligation to provide reasons to unsuccessful tenderers, there has not been any significant case to date in this jurisdiction examining the extent of this obligation. For this reason, the recent judgment of Mr. Justice Humphreys, which analysed in detail the question of whether Kildare County Council provided sufficient reasons to RPS (one of the unsuccessful Tenderers is to be welcomed.
This case concerned a challenge taken by RPS against the decision of Kildare County Council (the “Council”) in a tender procedure for the award of a contract for engineering consultancy services. RPS’s tender was more competitive on price than the successful tender by a significant margin but it did not score as well as the successful tenderer under the qualitative criteria and was ultimately ranked second overall in the competition.
The case centred on the question of whether the Council provided RPS with sufficient reasons for its decision to award the contract to the successful tenderer. Mr Justice Humphreys in the High Court ruled that the Council had breached its obligation to provide sufficient reasons for its decision and ordered the Council to provide such reasons within 15 days of the judgement.
Decision & Comment
Mr. Justice Humphreys was of the view that the process adopted and the reasons offered by the Council to RPS, were severely flawed. Justice Humphreys was particularly critical of the fact that the “same generic reasons were recycled for each one of the losing tenderers” and found that the Council had breached its obligation to give “individual reasons” for each unsuccessful tenderer. According to Justice Humphreys, the requirement to provide the “relative” advantages of the successful tenderer requires “an individual consideration and formulation of the advantages of the winner relative to the particular unsuccessful tenderer concerned”. This finding is of particular significance to contracting authorities when debriefing unsuccessful tenderers and highlights the need for contracting authorities to provide bespoke reasons to unsuccessful tenderers.
Justice Humphreys usefully distilled the key principles and existing case law regarding the obligation to provide reasons to unsuccessful tenderers to the following seven points:
a) Scores alone could only constitute sufficient reason if the tender criteria revolved around price or other purely quantitative measurements.
b) Where the award turns on qualitative criteria, there is a heightened obligation to give reasons, particularly where the unsuccessful tenderer offered a more competitive price.
c) There is a “legal requirement for a bespoke statement of reasons” which places an obligation on the Contracting Authority to inform the unsuccessful tenderer of the relative advantages of the preferred tenderer. This involves a comparison between the preferred tenderer and the unsuccessful tenderer to whom the statement of reasons is addressed.
d) While brief statements or succinct comments may be sufficient in certain circumstances, this will not always be the case.
e) The comments provided to the unsuccessful tenderer must be “sufficiently precise” to determine the matters of fact and law on the basis of which the contracting authority rejected the unsuccessful tenderer’s bid but accepted that of another tenderer.
f) In order to set out the characteristics and relative advantages of the successful tenderer, the contracting authority must at least mention the matters which should have been included in the unsuccessful tenderer’s bid or the matters that were contained in the successful tender. This requires a statement of reasons that is sufficiently detailed to explain how the successful tenderer was deemed to be more advantageous by reference to particular matters, examples or facts.
g) Finally, contracting authorities must respond positively to a request for additional reasons made by an unsuccessful tenderer unless specific exclusions apply.
In addition, Justice Humphreys was highly critical of the stepped scoring approach applied by the Council whereby scores under each criterion were marked “excellent”, “very good” or “good” which resulted in scores of 100%; 80%; and 60% etc. This scoring system was described by the Court as “crude”, allowing for overt subjectivity in the making of decisions and allowed for no provision for awarding scores between marks, meaning they could not correspond to differences in quality. However, the crudeness of the marking scheme was not central to the Court’s decision.
Judge Humphreys also disapproved of the Council’s refusal to hold a debrief meeting with RPS after the expiry of the 30 day time limit for fear of re-starting the 30 day limitation period. Justice Humphreys found this proposition to be “entirely misconceived and unstatable” and a disregard of the Department of Public Expenditure and Reform guidance regarding debriefing. He found the Council’s approach “of hunkering down and saying nothing lest it be used against one is not an acceptable stance for any public service organisation in its dealings with citizens”. However, it is hard not to find sympathy with the position adopted by the Council particularly in circumstances where the Remedies Regulations provides for the commencement of the 30 day limitation period from when the applicant “knew or ought to have known of the alleged infringement”. Accordingly, in line with the Council’s fears, the disclosure of information during a debrief meeting could arguably trigger the commencement of a fresh 30 day period.
A final somewhat interesting finding of Justice Humphreys is that the standstill period runs “even if the notification is lacking as to reasons”. Judge Humphreys held that to find otherwise would lead to “intolerable uncertainty” as to when the standstill period commenced or expired. This is a somewhat surprising finding as the Remedies Regulations imply that the standstill period only commences on the date on which a fully compliant statement of reasons is issued. It will be interesting to see how this will be interpreted in future decisions and it reiterates the need for unsuccessful tenderers to move quickly if not satisfied with a tender decision.
The case is hugely significant for Contracting Authorities and unsuccessful tenderers alike. The findings will undoubtedly bolster any unsuccessful tenderers pursuing further and better reasons as to why they were unsuccessful in a particular tender process. It will also require many Contracting Authorities having to rethink their approach to debriefing. The provision of generic and bland reasons to unsuccessful tenderers will no longer be acceptable.
For further information contact:
Jean-Anne Young, Associate