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Evaluated: Supreme Court provides clarity on the review of public procurement processes


Friday, June 7, 2019

Seventeen years after the seminal decision in SIAC Ltd v Mayo County Council which established the test of ‘manifest error’, the Supreme Court has returned to examine the test by which a Court can review a public procurement process.

Recently, Mr Justice Donal O’Donnell handed down a unanimous judgment in a procurement challenge brought by Word Perfect Translation Services Limited (Word Perfect) against the Minister for Public Expenditure and Reform in relation to the procurement by the Office of Government Procurement (OGP) of translation services for state bodies.  The proceedings to date have had seven hearings, with seven reserved judgments delivered in the last 18 months.  For more information on the background to the case, please see the Philip Lee article of 18 July 2018.  This appeal arose primarily from the decision of the Court of Appeal which overturned the High Court and in doing so found two instances of manifest error.

Supreme Court Question

 The Supreme Court decided that it would hear the appeal, from the Court of Appeal, on the following question:

“What is the test by which a tender award under public procurement legislation may properly be reviewed by a court and was that test met in respect of the two grounds as to narrative statement and professional development whereby the tender award was overturned by the Court of Appeal.”

The parties in the case, and the Court, were agreed that the correct test was that of ‘manifest error’, as laid down in Siac. For a procurement process to be vitiated by a Court, the Court must find that there was a manifest error on the part of the contracting authority – a less extreme test than that of ‘irrationality’ used in other Judicial Review proceedings.  Furthermore, ‘manifest’ should not be equated with any exaggerated definition of obviousness.

The parties, and the Court, were also agreed that the ‘manifest error’ should be interpreted by reference to the test of the reasonably well informed and normally diligent (RWIND) tenderer, a recent passenger on the Clapham omnibus according to Lord Reed 2.

Much of the argument at the Supreme Court focussed on the scope of when and how the RWIND test should be applied.

Supreme Court Decision on the Law

 The Test of Manifest Error

Attempting to distinguish the test of ‘manifest error’ from that of irrationality, O’Donnell J said he would “see [it] not so much in terms of the patent nature of any error, but rather as relating to the degree of confidence with which it can be said that the decision was wrong.”

Judicial Deference

O’Donnell J confirmed that the test, and the interpretation of the tender documents, was a matter of law for the Court.  However, O’Donnell J also drew on the case of Gaswise 3 and the recent case of Transcore to say that the Court should place itself in the shoes of a RWIND tenderer, and should do so while focussing on the industry concerned.  O’Donnell J  said:

“a considerable margin of appreciation must be accorded to expert evaluation of decisions on the facts”

The Court also found merit in the proposal that review by the Court of a procurement evaluation required review of the entire process and not just the final decision.  Review of the process in this case revealed a “well-structured and conscientious approach to the evaluators’ task.”

This particular case involved (among other issues) a factual scenario where the initial marks given to a tender at the initial stages of the procurement process changed and evolved throughout the process and ultimately resulted in the final marks being different.  This was particularly remarkable in this case as it changed the result of the entire competition.  In these circumstances, O’Donnell J described as “apposite” the Court of Appeal’s observation that:

“the task of the evaluators is already difficult enough.  If they were required to explain possible changes in thinking between evaluation meetings prior to the final decision it would add new layers of complexity – not least in terms of discovery and oral evidence – to an already complex system of public procurement litigation. […] They cannot be expected to have to defend what are, at best, tentative or provisional views expressed during the course of the evaluation process.”

Supreme Court Decision on This Case – Finding of Manifest Error

In applying judicial deference to this case, the Supreme Court found that there was no ‘manifest error’ in respect of the ‘Service Delivery Plan’ evaluation, overturning the Court of Appeal.  This dispute was that the successful tenderer provided a response to show that it would encourage its staff members to maintain their skill levels rather than ensure  which was required.  The Court decided that when this matter was considered from the point of view of the industry, to require the evaluators to grant a score lower than 100% was “too lawyerly” and would be to “the exclusion of the industry context.”

Conversely however, in relation to the Quality Assurance Plan, the Supreme Court found that there was a ‘manifest error’ in the evaluation of whether or not the successful tenderer had provided a ‘narrative’ as required.  The Court acknowledged this may be an unintended consequence but that the tender documents did make it clear that some sort of narrative was required.

Characteristics and Relative Advantages

An issue that arose in this case, albeit not argued in the Supreme Court, was in relation to material disclosed in a debrief letter.  Legislation states that, at debrief, the public authority must provide the “characteristics and relative advantages” of the winning tenderer.  In this case, in categories where Word Perfect scored better than the successful tenderer, the public body simply said that there were no characteristics and relative advantages.  Word Perfect initially challenged this but it did not form part of the Supreme Court case.  However, O’Donnell J mentioned that the balance between confidentiality and effective challenge of awards “may necessarily curtail the amount of information disclosed in the notice to the unsuccessful tenderer.”

Discovery 

A perennial problem that arises in procurement cases is what level of Discovery should be made and how.  Courts are aware that there is a balance to be struck between the confidentiality and sensitivity of information submitted in a bid, and the ability of an unsuccessful tenderer to properly prosecute their case if a wrong has been done.

The Court of Appeal found that the ordinary test for Discovery (being relevant and necessary to fair disposal of the case) does not go far enough in procurement cases and that rather Discovery should only be granted if the documents have been shown to be “indispensable for the fair disposal of the procurement challenge.” The Supreme Court accepted the “[f]ormidable problems” created in procurement discovery applications and said that any Discovery should be made only with reference to the case as pleaded.  O’Donnell J accepted that there is no perfect solution, but commended the Court of Appeal in how it ordered Discovery only of the relevant parts of the tender and did so by setting up a ‘confidentiality ring’ whereby only the solicitors and counsel of the unsuccessful tenderer were allowed to see the documents.  

Advice from the Court

The Supreme Court provided two useful pieces of advice to contracting authorities:

  • An issue that sometimes comes up when drafting tender documents is how precisely a potential mark should be described.  Simply put, a contracting authority may say that an ‘excellent’ response will receive 5 marks, a ‘very good’ response, 4 marks, a ‘good’ response 3, and so on.   In this case, one of the issues related to whether the contracting authority could give a mark within the top bracket which required tenders to ‘meet or exceed’ the requirement.  The Court put forward a novel wording for upper end marking:

“It may have been clearer if the top category had simply been described as an excellent response providing comprehensive and convincing assurance that the tenderer will deliver to an excellent standard, with the individual marks allocated indicating their respective merit within that category.”

  • The Court also said that consideration of this case emphasises the “need for precision in the drafting of a tender and the construction of the tender process, care in the evaluation, and, not least, pragmatism and efficiency in any review.”

 

For more information on this topic please contact our projects team.

Article written with the assistance of Darragh Bollard.

 

1 [2002] 3 IR 148

2 Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49

3 Gaswise Ltd v Dublin City Council [2014] 3 IR 1 Finlay Geoghegan J, who was incidentally a concurring member of this Supreme Court

4 Transcore LP v the National Roads Authority [2018] IEHC 569 Barniville J)


Author

Clare Cashin

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