Providers need to be alive to the risk of contractors becoming insolvent and how to limit the resulting inevitable disruption.
A recent case¹ establishes that abnormally low tenders do not need to be investigated unless they are set to be rejected.
The case concerned an online auction for the provision of clinical waste services where the NHS (England) Service Commissioning Board (NHSE) was challenged for failing to investigate whether the lowest-priced bid was abnormally low.
Waste specialists SRCL Ltd challenged the award of the contract, saying that the NHSE is required to investigate whether a tender is abnormally low under Regulation 69 of the Public Contract Regulations 2015 (PCR 2015), and that the NHSE could only accept a potentially abnormally low tender if it is satisfied with the explanation from the suspected ‘low-bidder’.
The Court said that there is nothing in Regulation 69(1) PCR 2015 which suggests that a public authority, or other organisation subject to PCR 2015, has a general duty to investigate all abnormally low tenders. There is only a duty to investigate a bid which they are considering rejecting on the basis of it being abnormally low.
The Court’s stance was a surprise, given earlier case law² which had seemed to suggest that a public body would have to seek clarifications from suspected low-bidders.
In a separate point, the Court said that it will not look kindly on a contractor who contrives to make an artificially high bid with the sole aim of challenging the outcome of a tender process which it knows it cannot win. Clearly the Court had little sympathy with the challenger here.
For more information
If you have any questions about this e-briefing, or have any other procurement concerns, please contact Andrew Millross.
¹ SRCL Ltd v National Health Service Commissioning Board  EWHC 1985 (TCC)
² SAG ELV Slovensko and Others  EUECJ C-599/10
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