Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
But what happens when a tenderer is sent the Standstill letter and the scores that they have received appear to be inconsistent with the evaluation and scoring criteria?
We have been involved in a case recently where a major social care provider had taken part in a public procurement exercise and had been successful at PQQ stage. Next they were asked to submit method statements responding to specific questions asked in the ITT, as well as to submit an hourly rate based on a set weekly volume of hours. Each method statement was marked between 0 (fail) and 5 (Excellent). No surprises so far!
However, when the Standstill letter was received, it delivered bad news and our client was informed that they had been unsuccessful. They were provided with their overall scores together with those of the successful tenderers. However it was unclear why they had been scored so low for quality and why the winning bidder had scored so high. The client had not been provided with adequate information on the reasons for the scores, including the characteristics and relative advantages of the winning tenderer. This is a clear requirement of the relevant procurement regulations now enshrined in Regulation 86 of the Public Contracts Regulations 2015.
Our client wrote to ask for proper feedback and so did we, but it was not provided. The dilemma for our client and so many disappointed tenderers is that without adequate explanations, it is difficult to know whether the process has been run fairly and in compliance with the Regulations or not. The added difficulty is that the Regulations provide very tight timescales for challenge. Effectively, unless a claim is issued at Court within 30 days from when a tenderer knew or ought to have known that there was the basis for a claim, then any subsequent claim will be out of time.
Usually, Commissioners will provide sufficient feedback to enable tenderers to understand why they have not won. However in this case it was not provided and on day 29 following the issue of the Standstill letter, we were instructed to issue a claim at Court.
It transpired during the course of the legal proceedings that the procurement team had retained little contemporaneous evaluation documentation, having destroyed the notes made by evaluators after the meeting in which tenders were scored.
Upon receipt of the method statements provided by the successful tenderers, our advice was that without the necessary records, there was no adequate explanation for the scores that had been awarded and that this breached the principles of equal treatment and transparency in the scoring of the bids.
Fortunately, there had been another case like this one that had recently gone through the Courts in 2015, called Woods Building Services v Milton Keynes Council. This was a case where Woods Building Services had been tendering to provide asbestos services to the Council and were not appointed. It was almost on all fours with the case of our social care provider, in that there was also a complete lack of contemporaneous records as to how the quality questions were scored. The judge said that if Commissioners don’t keep adequate records from the evaluation panel to explain why they scored the way they did, this could automatically amount to a breach of the Regulations because there is a lack of transparency. The judge even said what he thought the scores should have been for some of the questions and in his judgment said that Woods should have won.
Coming back to the case of the social care provider, the Commissioner fought hard in the litigation to try to persuade our client to discontinue the process; it took great resolve to keep going. Eventually, we got close to trial and the Commissioner said that they would be prepared to attend a mediation process. At the mediation a confidential settlement was reached where the Commissioner agreed to pay to our client a substantial sum in damages for their loss of profit and other expenses, as a result of failing to be awarded a contract. The majority of our client’s legal costs were also paid.
So what should tenderers and Commissioners learn from these cases, as they move through the tender process?
- On receipt of the tender documents, tenderers need to consider whether the documentation is sufficiently to understand the criteria against which their tender will be measured. If not clarification should be sought at that stage and if necessary, advice taken.
- Commissioners should ensure that evaluation panels keep contemporaneous records of their decisions and that these are preserved in case of a challenge. Under the Regulations Commissioners are required to keep “sufficient documentation to justify decisions taken in all stages of the procurement procedure…”.
- Does the de-briefing information provided in any Standstill letter, or subsequently, adequately explain the reasons behind the scores given? In a nutshell, there should be sufficient information to understand why a tenderer lost and why the winning tenderer won.
- Commissioners should complete de-brief material with reference back to contemporaneous notes and not try to explain the scores after the event.
- Not every situation is hopeless for a disappointed tenderer; sometimes the process is fundamentally flawed and should be re-run or the bidder should be compensated.
By taking early advice both tenderers and Commissioners can ensure that the right process is undertaken and challenges can be kept to a minimum.
For more information
Please contact Andrew Lancaster.
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