“26(b) This conclusion was supported, among other things, by the fact that the winning tenderer’s price was arrived at as a result of a competitive reverse eAuction process conducted in accordance with regulation 35 of the 2015 Regulations and which was actively participated in by at least two tenderers whose lowest and final bids were within 1% of each other.”
“14. Ever since the Woolf reforms, parties in the High Court have been required to agree lists of issues formulating the points which need to be determined by the judge. That list of issues then constitutes the road map by which the judge is to navigate his or her way to a just determination of the case. Employment tribunals encourage parties to agree a list of issues for just that reason and, if advocates are retained on both sides, it is right and proper for a list of issues to be prepared. 15. In paragraphs 32-33 of Land Rover v Short (2011)UKEAT/0496/10/RN Langstaff J approved the submission of counsel that:- "it was trite law that it was the function of an Employment Tribunal to determine the claims which the claimant had actually brought, rather than the claims which he might have brought and that accordingly the claimant was limited to the complaints set out in the agreed list of issues." So likewise must the respondent be limited to the defences set out in the agreed list of issues. 16. In similar vein, Mummery LJ in Parekh v London Borough of Brent[2012] EWCA Civ 1630 (with whom Patten LJ and Foskett J agreed) said:- "31. A list of issues is a useful case management tool developed by the tribunal to bring some semblance of order, structure and clarity to proceedings in which the requirements of formal pleadings are minimised. The list is usually the agreed outcome of discussions between the parties or their representatives and the employment judge. If the list of issues is agreed, then that will, as a general rule, limit the issues at the substantive hearing to those in the list: see Land Rover v Short at [30] to [33]." 17. Professional advocates were retained in the present case and agreed the list of issues which was given to the employment judge (so we were told) on the morning of the hearing. The judge was, therefore, entitled to proceed on the basis that the only issue in relation to the claim for unauthorised deduction from wages and breach of contract was whether there was an agreement that the claimant be paid a salary. Having decided that there was such an agreement, she not unnaturally upheld the contract claim as being outstanding on termination. She never dealt with any argument that nothing was outstanding because the company could not afford to pay the claimant's salary and still less with any argument that, even if the company could not afford to pay it, it was necessary to imply a term that, nevertheless, the company was obliged to pay once the employment had come to an end. These issues were never said to be issues which the judge needed to decide.”
“100. Contrary to §26(b), the eAuction process was not conducted in accordance with reg. 35. The services to be performed under the call-off contract which was under auction were only to be fixed after the auction had taken place and the contract had been awarded. The “contract price” was also to be fixed after the auction, depending on the content of the services verified with service users, and depended upon a range of prices, carried over from framework bids, which were not even sought in the auction. The lack of precision as to what bidders were bidding for contributed to bidders pricing on different bases and this resulted in a situation whereby the auction price did not reflect the actual price which HES and Sharpsmart would in fact charge for performing the basket of services set out in the FRT.”
“Supplier Entry: The Supplier is to enter the quantity of cost base items in accordance with the Unit of Measure stated, and the Rate (£) to be applied to the quantity to generate a total cost for the Cost Base Item. The Supplier should repeat quantity and rate entries across all regions (as required to deliver the proposed service for the quantity of bins defined for each region for these selected bin types). Note: all Programme Management and Indirect Costs are priced”
“During the trial, His Lordship made clear that breach of Regulation 35(5) had not been pleaded by the Claimant and was not included in the agreed list of issues [T-5/101-112]. The Claimant is therefore unsure whether His Lordship’s judgment will include any consideration of whether the Wave 6 eAuction was carried out in compliance with Regulation 35(5). Given the 30 day time limit for claims of breach of thePublic Contracts Regulations 2015 , which would run from the day of Mr Johnston’s evidence, the new claim was issued on a protective basis, and the parties have agreed to stay the proceedings pending the handing down of the judgment in the first claim. The Claimant will of course review whether or not to proceed with the new claim in the light of His Lordship’s judgment. We apologise for not specifically drawing the attention of His Lordship to the issue of the new claim. No discourtesy was intended. The new claim covers an issue which was not pleaded in the claim before His Lordship and it would only in exceptional circumstances be appropriate for a party to communicate with a Judge after a hearing and before judgment. We note, however, that His Lordship is now aware of the new claim.”
“The Defendant’s Defence is that the Claimant is not entitled to the sums claimed or all of them. The Defendant contends that the Claimant has engaged in substantial overcharging, and the levying of incorrect charges in its invoices.”
"We are waiting for a compelling event to happen. We need to create a compelling event."
"It [ie TUPE] appears to be one of the factors driving the cavalier bidding behaviour that has been seen in e Auctions to date. It may explain why in some e Auctions NHS England has received what have appeared to be abnormally low tenders."
“MR WILLIAMS: Having participated actively in the previous five Waves, and indeed won many of the lots, including reducing your prices up to 50 per cent, why is it that all of a sudden, on the eve of the Wave 6 call-off, you suddenly start complaining about abnormally low tenders? A. I don't know.”
"Our client calculated the lowest possible sustainable price for its delivery of this service to be£480,000 and withdrew from the eAuction when bids went below this level (our client's last bid being£479,999 ). Our client's approved framework pricing for this service (as validated by the Crown Commercial Services for the purpose of this eAuction) was£688,589 . We understand that the winning bidder submitted a price of£310,000 . This sum appears abnormally low (and in our client's view unsustainable) such that NHS England has an obligation pursuant to regulation 69(1) of the PCR to investigate."
“33… Regulation 32(4) specifies a short limitation period. That is no doubt for the good policy reason that it is in the public interest that challenges to the tender process of a public service contract should be made promptly so as to cause as little disruption and delay as possible. It is not merely because the interests of all those who have participated in the tender process have to be taken into account. It is also because there is a wider public interest in ensuring that tenders which public authorities have invited for a public project should be processed as quickly as possible. A balance has to be struck between two competing interests: the need to allow challenges to be made to an unlawful tender process, and the need to ensure that any such challenges are made expeditiously. Regulation 32(4)(b) is the result of that balancing exercise.”
“In the interests of attempting to avoid unnecessary litigation our client will a) Carry out the requested investigation; b) Within 2 working days of the completion of that investigation, provide [SRCL] with an explanation of the steps taken in the conduct of that investigation and of the information requested from the two lowest bidders; and c) In the event that our client’s decision is not to reject one or both of the two lowest bids, our client will wait for a period of 5 working days following the provision of the information in point (b) above prior to entering into the contract with the winning bidder. Please confirm that on the basis of the above you will not issue proceedings on Friday19 May 2017 or at any time prior to being provided with the information in point (b) above.”
“23. The main remaining issue is whether or not there is some good or arguable reason why there should be an extension of time in effect to bring the service of the Claim on30 December 2010 within time. I do not consider there is any such reason: (a) There is no explanation from Mermec as to why the Claim could not have been drafted let alone served weeks before it was served. (b) It is perhaps unhelpful to try to give some exhaustive list of the grounds upon which extensions should be granted but such grounds would include factors which prevent service of the Claim within time which are beyond the control of the claimant; these could include illness or detention of the relevant personnel. There must however be a good reason and none is advanced by the Claimant in this case. (c) It is said that the delay was only some six or seven days and that there should be an extension for such an insignificant period because it is a relatively short delay. However, there is no point in having a three-month period if what it means is three months plus a further relatively random short period.”
“While in the public law field, it is essential that the courts should scrutinise with care any delay in making an application and a litigant who does delay in making an application is always at risk, the provisions of RSC Ord 53, r4 ands.31(6) of the Supreme Court Act 1981 are not intended to be applied in a technical manner. As long as no prejudice is caused, which is my view of the position here, the courts will not rely on those provisions to deprive a litigant who has behaved sensibly and reasonably of relief to which he is otherwise entitled.”
“[69] This leads on to a separate and important point. If a claimant applies for permission to amend and the amendment arguably adds a new claim which is statute barred, then the claimant should take steps to protect itself. The obvious step is to issue separate proceedings in respect of the new claim. This will have the advantage of stopping the limitation clock on the date of the new claim form. If permission to amend is granted, then the second action can be allowed to lapse. If permission to amend is refused, the claimant can pursue his new claim in the second action. The two actions will probably be consolidated and the question of limitation can be determined at trial.”
“[156] [It was] submitted that Arnold J. has misread the Directive as imposing an obligation to investigate “suspect” tenders generally, when it did not, save in cases where the authority was proposing to reject the tender in question. I agree with that submission. In my judgment, despite the difference of wording, there is no difference in substance between the provisions of the Directive and those of the Regulations. The thrust of both provisions is that an authority cannot reject a tender which is abnormally low unless it does certain things in terms of investigating that tender. For present purposes, there is no difference between saying that you shall do certain things before an entitlement to reject arises and saying that you may reject the tender provided you have done certain things. [157] Either way, there is nothing in either provision to support the contention that there is a general duty owed by the authority to investigate so-called “suspect” tenders which appear abnormally low. Nothing in the European Court decisions to which Arnold J. refers dictates a different conclusion. Having heard full argument on the point at trial I am quite satisfied that neither the Directive nor the Regulations imposes a duty to investigate so-called suspect tenders generally. [158] It follows that, on the correct interpretation of both the Directive and the Regulation (save in the case of Fourways where the Council did consider the tender abnormally low and was contemplating rejecting the tender at least in part if not totally), the Council was not under a duty generally to investigate so-called “suspect” tenders in circumstances where the Council had no intention of rejecting those tenders. In my judgement, this aspect of Varney’s complaint that the Council was in breach of duty in failing to investigate the tenders other than Fourways falls at the first hurdle. [159] Furthermore, I consider that there is another fundamental obstacle to Varney’s case that the Council was in breach of duty in failing to investigate the other tenders. Although regulation 30(6) talks in the abstract of an offer which is abnormally low, the Directive refers to tenders which “appear to be abnormally low”, which makes sense as a reference to what “appears” to the relevant authority. In the circumstances, it seems to me that the duty for which Varney contends could only arise where the Council either knows or suspects that the tender in question is abnormally low. Leaving Fourways out of account, it is quite clear on the evidence of Mr. Shaw and Mr. King (which I accept) that neither of them actually knew or suspected that the other tenders were abnormally low.”
“[160] [It was contended in cross-examination of Mr. Shaw and Mr. King and in submissions] that the Council ought to have known or suspected that the other tenders were abnormally low. He submitted that it was a manifest error to have accepted tenders which the Council should have recognised as unsustainable. Alternatively, he submitted that there was a duty to reject such tenders. In terms of what is the correct test in law I am firmly of the view that the duty for which Varney contends (even if, contrary to the decision I have already indicated, such a duty could arise) cannot arise save in the case where the relevant authority actually knows or suspects that a tender is abnormally low. What it is contended an authority ought to have known or suspected, but did not know or suspect, is not sufficient to impose the duty for which Varney contends. Were it otherwise, an authority would have to investigate all tenders in detail to satisfy itself of the economic viability of each tender, an unrealistic and onerous burden.”
“If an offer for a public contract is abnormally low the contracting authority may reject that offer but only if it has….” requested an explanation and so on (emphasis added). This Regulation implemented Directive 2004/18/EC Article 55(1) which stated “If, for a given contract, tenders appear to be abnormally low in relation to the goods, works or services, the contracting authority shall, before it may reject those tenders, request in writing details of the constituent elements of the tender which it considers relevant”
“Under art.55 of the Directive, if, for a given contract, tenders appeared to be abnormally low in relation to the goods, works or services, the contracting authority was required before it may reject those tenders to “request in writing details of the constituent elements of the tender which it considers relevant”. (emphasis added). The question of clarification prior to rejection is clear from the wording of article 30(6) PCR 2006 which expressly stated: “If an offer for a public contract is abnormally low the contracting authority may reject that offer but only if it has…..”
“Contracting authorities shall require economic operators to explain the price or costs proposed in the tender where tenders appear to be abnormally low in relation to the works, supplies or services.”
“The 2014 Public Procurement Directive deals with abnormally low tenders in Art.69. Unfortunately, this provision does not take the opportunity offered by the new directive to clear up the uncertainty over the issue of whether there is generally a duty, or merely a power, to reject a tender that presents a certain risk of non-completion. Rather, it compounds the confusion that currently exists. In this respect the 2014 directive simply writes into legislation the statement in Slovensko that there is a duty to investigate an abnormally low tender, without limiting this to the situation in which the contracting authority wishes to reject the tender”
“The contracting authority may only reject the tender where the evidence supplied does not satisfactorily account for the low level of price or costs proposed.”
“20. One needs to understand that the legislation and Directives encourage competition and competitiveness. A key aspect of this is price and tenderers who are keen to secure a project will want to pitch their prices at a level which will be the lowest. They might be keen to break into a market or establish their market share. There is nothing wrong with that for them or for the utilities or contracting authorities, who are (almost) always keen to place contracts at the lowest price and, preferably, at lower than they have budgeted. One needs to consider how, commercially, a tenderer, which is not the incumbent provider or not the market leader, will ever get a contract unless it puts in attractively low prices. Provided that the lowest tenderer is sufficiently robust enough in financial/economic terms to provide the services which have been tendered for (or put another way will not become bankrupt part way through the contract), most utilities/contracting authorities will foreseeably be delighted to place the contract with such a tenderer; their constituents or the people or bodies (e.g. Parliament) would not only expect the truly most economically advantageous tender to be accepted but also would require an explanation as to why possibly millions of pounds have been wasted by rejecting a so-called "abnormally low" tender from a tenderer who is able effectively to provide the tendered services.”
“One needs to consider how, commercially, a tenderer, which is not the incumbent provider or not the market leader, will ever get a contract unless it puts in attractively low prices.”
“Due to the inclusion of direct and indirect overheads, unit costs which do not appear to be abnormally low and a profit margin included in the bid there is no evidence that the service provision will be fundamentally impacted by the cost of the HES bid.”
“.. In order to provide a sufficient statement of reasons for that aspect of the selected tender, the contracting authority must set out the reasoning on the basis of which, on the one hand, it concluded that, because of its principally financial characteristics, such an offer complied with the national legislation of the country in which the services were to be carried out in respect of the remuneration of staff, contribution to the social security scheme and compliance with occupational safety and health standards and, on the other, it determined that the proposed price included all the costs arising from the technical aspects of the selected tender.”
“4. Call-Off Rules 4.1 A Participating Authority [ie NHSE] may run a Competition and issue a Call-Off ITT on its own behalf (in respect of its own requirements) and/or on behalf of other Participating Authorities (in respect of such other Participating Authorities’ requirements) 4.2 Participating Authorities shall, when running a Competition, issue a Call-Off ITT to each of the suppliers who have been appointed to the Framework Agreement save that Participating Authorities shall not be obliged to issue a Call-Off ITT to the Suppliers where the Suppliers have indicated in their response to the Framework ITT that they are not capable of performing the relevant Statement of Requirements. 4.3 The Suppliers may conduct a Competition to award a Call-Off Contract by issue of a Call-Off ITT under this Framework Agreement either: 4.3.1 on its own behalf (provided that it is a Participating Authority); or 4.3.2 on behalf of one or more Participating Authorities; (including in both cases for the avoidance of doubt where the Suppliers are or include a commissioning support unit of NHS England) provided that effective measures are implemented and maintained that manage and remove any potential conflict of interest which may arise in relation to or out of the conduct of such Competition. Such steps shall include, but not be limited to, the Supplier’s ensuring that they do not themselves participate in the relevant Competition. 4.4 A Statement of Requirements may only relate to Services failing within a single Lot under the Framework Agreement. 4.5 Participating Authorities and Suppliers shall comply with the obligations and expectations of the Cabinet Office Statement of Practice “Staff Transfers in the Public Sector” (as amended) (“COSOP”) and Fair Deal for Staff Pensions (2013). 4.6 The transfer of staff in connection with the award of Call-Off Contracts shall be governed by TUPE, or, if TUPE is considered not to apply in any particular circumstances, by COSOP. In line with the principles of TUPE, the terms and conditions (including continuity of service) of transferring staff shall be protected and staff must be treated no less favourably than had TUPE applied. 4.7 As provided for by COSOP, neither Participating Authorities nor the Suppliers shall orchestrate a non-TUPE situation.”
“2. IMPORTANT INFORMATION 2.2 This ITT and any supplementary documents should be read as a standalone suite of documents. Subsequent documents may be published and will form part of this ITT if required. 2.5 This ITT is made available in good faith and is not intended to provide the basis of any investment decision or recommendation. Nothing in this ITT is or should be relied on as a promise or representation. No warranty is given as to the accuracy or completeness of the information contained in it and any liability or any inaccuracy or incompleteness is therefore expressly disclaimed by NHS England and its advisers.”
“We do not understand how NHS England expects TUPE costs and liabilities to be treated in the call-offs, or why TUPE data is not sought and provided to bidders in each call-off. It seems to us that TUPE will apply to some extent in every transfer of incumbency pursuant to a call-off, whether or not the various parties wish it to.”
“To establish whether there are potential TUPE risks we have contacted all framework suppliers plus any incumbent suppliers that we have been made aware of. As a result of our investigations we have concluded that, to the best of our knowledge, there are no further TUPE risks other than those disclosed. However, as previously stated we cannot warrant the TUPE information provided and nor have we carried out any form of validation of that information. Bidders must form their own opinions in relation to this information, based upon their own experience. Actual TUPE transfer details will need to be clarified between incumbent and successor in accordance with the rules within the TUPE legislation post-completion of the auction. However, there will be no change to the agreed auction price as part of this process. Where additional costs are incurred by the successor as a result of any TUPE transfers taking place in accordance with TUPE legislation, such costs will be borne by the successor. This is the basis upon which each bidder should price the services and participate in the auction. As the TUPE clarification process is just clarification and has no impact upon price or other contract terms it will not result in any material change to the call-off contract terms post contract award.” (Emphasis added)
“encouraged bidders to submit prices on the basis that TUPE would not apply so as to transfer relevant staff of the Claimant to an incoming bidder on their existing pay and other terms and conditions of employment and informed bidders that they need not take into account the impact of TUPE obligations in the prices submitted”
“The result of that conduct was to put the Claimant at a disadvantage in the competition for the contracts in that only the Claimant’s prices took into account the true cost of employing staff to perform the contracts.”