In its recent judgment, the High Court has highlighted various pitfalls to avoid in procurement procedures following a claim brought by Bromcom Computers plc ("Bromcom") which was the unsuccessful bidder in a procurement of a contract for the supply of a cloud-based Management Information System ("MIS") to United Learning Trust ("ULT").
ULT conducted a procurement for a contract to supply a cloud-based MIS to 57 of its schools. Bromcom and Arbor Education Partners Limited ("Arbor") were shortlisted for the final stage. Arbor was the incumbent provider of 15 MISs to ULT, although these were not the subject of the procurement. Arbor was awarded the contract by a narrow margin. Bromcom alleged numerous breaches of the PCR 2015 by ULT and that, in the absence of those breaches, Bromcom would have been awarded the contract. The issues before the Court included whether:
- Arbor's submission of its tender by email which provided a link to a drop-box containing its submission documents, and ULT's acceptance of this, breached Regulation 22(16) of the PCR 2015. Further, whether ULT's acceptance of a document, that was missing but was not mandatory, submitted by Arbor after the deadline breached Regulation 56(4) of the PCR 2015.
- ULT acted unlawfully in averaging the scores awarded by the individual evaluators and whether it was required to moderate those scores to reach a consensus, rather than an average, to satisfy its duty of transparency.
- ULT's acceptance of a discount offered by Arbor in the form of a rebate on the charges levied under its existing contract with ULT, which was not the subject of the procurement, infringed Regulation 67(2) and (5) of the PCR 2015.
Further, whether the addition by ULT of data transfer costs to Bromcom's submission breached the principle of fairness given that an equivalent cost was not added to Arbor's submission since it had already established means of a data transfer by virtue only of it being ULT's incumbent supplier.
On those issues, the Court held that:
- In permitting the use of a drop-box to which Arbor continued to have access after its submission, ULT breached Regulation 22(16)(a) of the PCR 2015 which requires a method of ascertaining a single point in time when a submission has been electronically filed. Acceptance of tender submissions via drop-box also breach the requirements of Regulation 22(16)(b) on the basis that a contracting authority cannot reasonably ensure that the tenderer will not continue to have access to their submission following the submission deadline.
Regulation 56(4) of the PCR 2015 allows contracting authorities to accept the submission or completion of documents which appear erroneous or incomplete and this is not limited to an already submitted document. ULT was therefore permitted to accept Arbor's missing document late although ULT should have informed Bromcom of this as a matter of transparency.
- ULT purported to hold a moderation discussion which was to lead to a consensus of the scores given by the individual evaluators. However, it was simply agreed that the averages of such scores were to be adopted. This breached the obligation to act transparently, which requires contracting authorities to give reasons for the scores arrived at. Inherent in this is a process that can yield such reasons, particularly where multiple evaluators produce individual scores. The court held that this necessarily involves a moderation to agree the overall score since a contracting authority must be able to explain why a tenderer has received a score and not merely that it has received such a score.
- The discount offered by Arbor amounted to a reduction in price by reason of a contract which was not the subject matter of the procurement in question. ULT's acceptance of this discount which permitted Arbor to offer a discount that in substance related to a different contract breached Regulation 67(2) and (5) of the PCR 2015.
ULT committed a manifest error and acted unfairly in adding the costs of the data transfer to Bromcom's submission but not to Arbor's. The Court relied on Dynamiki v Commission 2008 T-345/03 to hold that ULT should have deducted the cost to neutralise Arbor's advantage since it was technically easy for ULT to achieve this, it had an economic justification in not deterring competition and it did not infringe Arbor's rights.
In rejecting ULT's limitation defence the Court held that, whilst there is no impediment to knowledge being acquired orally, the form of communication can be significant. A "heated" meeting at which the explanations given by ULT for the procurement outcome and scoring were not particularly clear was not sufficient to give Bromcom knowledge of infringements which would make it appropriate to bring proceedings.
ULT's breaches were sufficiently serious and resulted in Bromcom, as the most economically advantageous tenderer, not being awarded the contract. Bromcom would have been awarded the contract in absence of the breaches. A trial on quantum is due to be held this year.
Points to note
The case provides important guidance on the principles that contracting authorities must follow during a procurement to avoid infringing the PCR 2015 and the associated consequences of infringement. Contracting authorities should be cautious to ensure that the bid of an incumbent provider contains submissions which relate only to the contract being procured and that the evaluation criteria reflect this. Acceptance of a discount which an incumbent is able to offer by reason only of an existing contract with a contracting authority will amount to a breach of the PCR 2015.
Contracting authorities should note the need to adhere to the scoring methods set out in the invitation to tender. The duty to act transparently requires the giving of reasons for the scores it has awarded, and it is not sufficient for a contracting authority to merely state that it has awarded those scores. Inherent in this requirement is a moderation leading to a consensus of the overall scores awarded, rather than the averaging of the scores of individual evaluators.
Whilst this issue should not on its face present a problem, contracting authorities should also take care with the form in which they allow submissions to be made. Acceptance of submission documents via a drop-box will likely infringe the PCR 2015. Contracting authorities should therefore clearly set out in the invitation to tender the form of submission that will be accepted.