Wednesday, July 18, 2018
With six hearings and six judgments in the space of as many months, the Word Perfect litigation has raced through the courts at an incredible pace, setting new precedents at every turn. Now that the Court of Appeal has decided in Word Perfect’s favour, it’s time to take stock of what happened throughout the course of the Word Perfect saga.
Word Perfect Translation Services Limited (“WP”) had been providing translation services to the Irish immigration service (“INIS”) for a number of years on an ad hoc basis. In 2015 the Office of Government Procurement (the “OGP”) issued a request for tenders (“RFT”) for the establishment of a framework agreement for interpretation services across multiple lots. WP along with two other service providers were admitted to Lot 4 (which concerned the provision of translation services to INIS and the Legal Aid Board). A mini-tender process was initiated in December 2016 under Lot 4 and ultimately, Translation.ie was selected as the preferred bidder. WP challenged the decision to award the contract to Translation.ie on the following grounds (a) a failure to give adequate reasons for the decision, (b) manifest error in a number of areas and (c) alleged concerns about the integrity and transparency of the process. The challenge initiated by WP resulted in an automatic suspension to the award of the contract. The Minister then applied to lift the automatic suspension. WP contended that the loss of the Lot 4 contract would give rise to losses which could not be adequately compensated by damages, for instance through reputational damage and the loss of specialist translators. Additionally, counsel for WP stressed the importance of the European jurisprudence and approach to this issue which strongly favoured the pre-contractual remedy such as the automatic suspension in this case and contended that the reference to damages in Regulation 9 of the European Communities (Public Authorities’ Contracts) (Review Procedures) Regulations 2010 (the “Remedies Regulations”) referred to “Francovich” damages and not the damages that might generally be available in a standard claim for breach of contract. The Minister contended that the suspension should be lifted, as this was a matter of national security and further contended that all the forms of loss asserted by WP could be compensated by an award of damages, including for loss of opportunity.
Decision #1 (High Court)
Noonan J. delivered the initial High Court judgment on 11 January 2018, applying the Campus Oil test and stating that the onus of proof rested on WP to justify the continuation of the contract. The Court was satisfied that WP had raised a fair issue to be tried, but Noonan J. agreed with earlier case law such as BAM v NTMA  IEHC 756 and Powerteam Electrical Services Ltd v ESB  IEHC 87 that reputational damage cannot be said to validly accrue simply due to a loss in a competitive tender process. As such, the Court was inclined to find that WP had not discharged the onus on it to prove that damages could not be an adequate remedy and therefore refused to lift the suspension.
Decision #2 (Court of Appeal)
WP appealed and the decision of Hogan J. in the Court of Appeal was delivered on 14 February 2018. Hogan J. focused heavily on the proper interpretation of Regulation 9 of the Remedies Regulations. Citing the recent judgment of the UK Supreme Court in Energy Solutions which found that the Francovich conditions “are no more than minimum conditions”, Hogan J observed that Members States could elect to go further in their domestic law and provide for the determination of damages by reference to less rigorous criteria (subject to the principles of equivalence and effectiveness). However, any change from the Francovich position would represent a change in law which could only be effected by legislation not ministerial order. Significantly, the Remedies Regulations were transposed by way of ministerial order. Accordingly, Hogan J concluded that the reference to the award of damages in Regulation 9 is a reference to Francovich damages, “because this is all that EU law actually requires”.
Hogan J proceeded to note that in awarding Francovich damages, it is necessary to show not just an objective breach of EU law, but that the breach in question is ‘grave’ or ‘manifest’. Hogan J. took this to mean that damages could not be an adequate remedy to a claimant such as WP, given the difficulty of recovering those damages. Accordingly, the appeal was allowed and the suspension was not lifted.
A condition of this decision was an accelerated timetable for the substantive hearing.
On 28 March 2018 Hogan J. delivered a further judgment on an appeal of a High Court judgment regarding discovery. WP had unsuccessfully sought discovery of Translation.ie’s winning tender. On appeal WP narrowed the scope of its discovery to three specific sections of the winning tender. Hogan J. began by outlining the importance of confidentiality and the protection of business secrets in regard to the tender process and noted that the possibility of easy access to a rival’s tender through discovery would be detrimental to public procurement. However Hogan J. then went on to hold that “tender documentation cannot be regarded as immune from the discovery process” as this would violate the Constitutional requirement to ensure that the administration of justice is effective. The right to commercial secrecy had to be balanced against this, and without access to tender documentation a tenderer might never be able to challenge a procurement process on grounds of manifest error. Hogan J. held that the test for whether or not a portion of another bidder’s tender should be made available should be that “the case for discovery of this documentation must be convincingly established as indispensable for the fair disposal of the procurement challenge,” and he ordered that a limited portion of the winning tender be disclosed on this basis. Also noteworthy is the fact that a confidentiality ring was established whereby only WP’s solicitors and counsel would be permitted to have sight of the discovery and not WP itself.
The substantive hearing of the WP challenge was heard in the High Court by Barrett J on 4 May 2018. WP challenged the award of the contract on numerous grounds, including failure on the part of the OGP to provide adequate reasons in regards to several specific points and a number of grounds which alleged that there were manifest errors in the evaluation process.
Of particular note was the contention that WP should have been given reasons for Translation.ie’s score in relation to those criteria where WP scored a higher mark, as without such reasons WP could not know if Translation.ie’s mark should have been lower. Barrett J held that WP was not entitled to this information. The Remedies Regulations require contracting authorities to provide a summary of the relative advantages of the preferred bidder. In seeking reasons for Translation.ie’s score under those criteria that WP scored higher, WP was not seeking information about an advantage, but information about a disadvantage. WP was looking to see if Translation.ie’s mark was justified at all, as opposed to seeking a comparison of the two tenders, something not contemplated by EU law. Barrett J. also disagreed that there had been manifest errors in the tender process.
Furthermore, he stated that “Just because some error presents in a procurement process it does not follow that the only and best relief to be granted by a court is necessarily to collapse what has occurred and return everyone involved to ‘Square 1.’” Although Barrett J held that there were no errors in the process, he held that even if he was wrong on that point, he did “not consider that any of the errors contended to present amounts to a manifest error” as “all of the conclusions of the Minister which it had been sought to impugn are supported by material that was before the Minister and were made within the margin of appreciation that falls to be allowed to the Minister when scoring and assessing the bids.”
This judgment was appealed in the Court of Appeal with WP narrowing their arguments to the following four grounds of appeal:
In a judgment delivered on 7 June 2018, Hogan J. upheld Barrett J.’s findings in relation to whether or not WP was entitled to reasons for Translation.ie’s score in relation to criteria where WP scored more points. Neither did Hogan J. accept the argument in relation to changes in the evaluators’ scoring throughout the process, holding that “evaluators should have the freedom to explore, consider and reflect upon” the various tenders and should only be held accountable for the final mark, not the provisional views expressed in the process leading up to that.
However, Hogan J. held that there were in fact manifest errors in the evaluation process. In relation to the Quality Assurance Plan criterion, Translation.ie had scored 170 marks, placing it in the highest scoring category which required tenderers to “fully meet” all requirements. This was despite the fact that they had not met the requirement to produce a narrative explaining their processes and had merely provided graphs and tables. Drawing on the judgments in Gaswise Ltd v Dublin City Council  3 IR 1 and Clinton v Department for Employment and learning  NIQB 2, Hogan J. stated that the term “narrative” was an ordinary English word which must be understood as requiring a written statement as opposed to simply graphs and charts.
Furthermore, Hogan J. noted that while neither tenderer had met the requirement for tenderers to demonstrate how they would ensure that their employees would maintain their translation skills (both tenderers merely showed that they would encourage, rather than require, their employees to engage in continuing professional development), Translation.ie had been awarded full marks in that category. This was also held to be a manifest error. In view of the two findings of manifest error, Hogan J considered that the Court had no alternative but to make an order setting aside the decision to award the contract to Translations.ie.
The various decisions delivered during the course of 2018 in relation to this one tender competition are each hugely significant. However, it is the ruling of Hogan J in relation to the adequacy of damages at the suspension hearing that will likely have the most impact on contracting authorities and unsuccessful tenderers alike. Hogan J’s finding will certainly result in fewer applications on the part of contracting authorities to lift the automatic suspension and may possibly lead to an increase in the number of challenges to tender outcomes.
 2017 1 W.L.R. 1371, 1394