Procurement - Changing the scores on the doors
In this article by Walker Morris LLP, Richard Auton and Daniel Newbound comment that the High Court has clarified the circumstances in which a losing bidder can challenge a procurement for scoring errors. In this insight they look at a recent case and identify the key principles which have emerged.
The High Court has clarified the circumstances in which a losing bidder can challenge a procurement for scoring errors - Woods Building Services -v- Milton Keynes Council .
Woods Building Services was the incumbent provider of asbestos removal services but lost a tender for the renewal of the contract. It issued Court proceedings and asked the Court to change the scores and award it the contract on the basis that the process had been undertaken without proper transparency/ equal treatment and that the Council had committed multiple errors when evaluating its answers.
The following key principles emerge from the Judgment:
1. An authority has a wide margin of appreciation
In order for a score to be changed by the Court for “error” then it must have been a “manifest error”. This is equivalent to the legal concept of “Wednesbury unreasonableness” - i.e. a reasoning or decision so unreasonable that no reasonable man or woman could have made it. This meant that the Council had a “margin of appreciation” when the Court assessed whether or not it had made errors in scoring Woods’ bid. In other words the Council could be wrong but not so wrong that it amounted to a manifest error. In contrast, there is no margin of appreciation for complaints regarding breach of the EU principles of transparency or fairness (where there has either been a breach or there has not).
2. Challenging on fine margins is difficult
Woods made multiple complaints focused on improving its score for individual criteria by fine margins on the basis that the Council had made manifest errors in, for example, awarding 6 marks when on the evidence Woods deserved 8. The majority of these contentions were rejected by the Court because it was not able to find that the Council’s score - even if it looked wrong - was so irrational and incapable of justification that it could not have been made in the subjective judgment of the assessors. Woods succeeded in relation to its complaints of manifest error where the wording of the Council’s award criteria in fact allowed no or limited margin of appreciation as to the score to be awarded and required that a tenderer should be scored 0 if requirements had not been met.
3. Get the evaluation process right
The Court was not impressed with the evaluation process carried out by the Council. In particular:
· the involvement of a previous employee of Woods gave rise to concerns regarding a conflict of interest;
· there was also a lack of proper records to justify clear reasoning which made the Court’s task more difficult; and
· when the evaluation had been reconsidered internally by the Council following the initial stage then, if the Council had believed that a re-evaluation was required, it should have been carried out from scratch rather than using the initial phase as a starting point.
4. Playing for a rematch
Woods succeeded in a sufficient number of complaints regarding scoring of individual criteria to establish that it should have won had the tender been marked properly. Naturally enough it asked for an order that it be awarded the contract in place of the winning bidder. However the power of the Court to interfere in an award under the Procurement Regulations does not actually specify that it is entitled to award a contract in place of the winning bidder and change the result, only that a decision may be set aside. The Judge reviewed the available case law and determined that he did not have any power under precedent for making Woods the winning bidder other than in exceptional circumstances. The appropriate course of action was for the procurement to be re-run whereupon Woods would be entitled to damages if it established that it was worse off following a re-conducted procurement.
This case brings further clarity to the basis on which a challenge can be made based on scoring errors - namely that if you are relying on errors then they need to be clear and manifest and the Court is unlikely to re-conduct a subjective evaluation on fine points of detail. There is better scope for challenging on the grounds of a lack of transparency/equal treatment.
For all challenges, the case emphasises that the most likely successful outcome (other than damages) is that the procurement will be re-conducted in whole or in part. Other than damages the main gain sought by the challenging bidder is therefore the opportunity for a second chance at the tender. The chance of a rematch is after all better than being out of the competition altogether.
If you wish to discuss any procurement issues including potential challenges please contact Daniel Newbound or Richard Auton of Walker Morris’ procurement team.