Working on Wellbeing Ltd trading as Optima Health v Secretary of State for Work and Pensions & Ors [2024] EWHC 766 (TCC)

“(3) Any question as to the validity, meaning or effect of any retained EU law is to be decided, so far as that law is unmodified on or after IP completion day and so far as they are relevant to it— (a) in accordance with any retained case law and any retained general principles of EU law, and (b) having regard (among other things) to the limits, immediately before IP completion day, of EU competences.”

“18. — Principles of procurement (1) Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner. (2) The design of the procurement shall not be made with the intention of excluding it from the scope of this Part or of artificially narrowing competition. (3) For that purpose, competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators.”

“(1) Contracts shall be awarded on the basis of criteria laid down in accordance with regulations 67 to 69,[These relate to Contract award criteria (Reg. 67), life-cycle costing (Reg. 68) and abnormally low tenders (Reg 69)] provided that the contracting authority has verified in accordance with regulations 59 to 61 that all of the following conditions are fulfilled:— the tender complies with the requirements, conditions and criteria set out in the contract notice or the invitation to confirm interest and in the procurement documents, taking into account, where applicable, regulation 45;[Reg, 45 permits a contracting authority to authorise or require tenderers to submit variant bids] ….. (4) Where information or documentation to be submitted by economic operators is or appears to be incomplete or erroneous, or where specific documents are missing, contracting authorities may request the economic operators concerned to submit, supplement, clarify or complete the relevant information or documentation within an appropriate time limit, provided that such requests are made in full compliance with the principles of equal treatment and transparency.”

“37. ... observance of the principle of equal treatment of tenderers requires that all the tenders comply with the tender conditions so as to ensure an objective comparison of the tenders submitted by the various tenderers … . ... 39. With regard to the Danish Government's argument that Danish legislation governing the award of public contracts allows reservations to be accepted, it should be observed that when that legislation is applied, the principle of equal treatment of tenderers, which lies at the heart of the directive and which requires that tenders accord with the tender conditions, must be fully respected. 40. That requirement would not be satisfied if tenderers were allowed to depart from the basic terms of the tender conditions by means of reservations, except where those terms expressly allow them to do so.”

“41. … [T]he principle of equal treatment implies an obligation of transparency in order to enable compliance with it to be verified …. 42. More specifically, this means that the award criteria must be formulated, in the contract documents or the contract notice, in such a way as to allow all reasonably well-informed and normally diligent tenderers to interpret them in the same way. 43. This obligation of transparency also means that the adjudicating authority must interpret the award criteria in the same way throughout the entire procedure … 44. Finally, when tenders are being assessed, the award criteria must be applied objectively and uniformly to all tenderers. Recourse by an adjudicating authority to the opinion of an expert for the evaluation of a factual matter that will be known precisely only in the future is in principle capable of guaranteeing compliance with that condition.”

“In that context, the purpose underlying the principle of transparency, which is a corollary of the principle of equality, is essentially to ensure that any interested operator may take the decision to tender for contracts on the basis of all the relevant information and to preclude any risk of favouritism or arbitrariness on the part of the licensing authority. It implies that all the conditions and detailed rules of the award procedure must be drawn up in a clear, precise and unequivocal manner to, first, make it possible for all reasonably informed tenderers exercising ordinary care to understand their exact significance and interpret them in the same way and, second, to circumscribe the contracting authority's discretion and enable it to ascertain effectively whether the tenders submitted satisfy the criteria applying to the relevant procedure … .”

"41. Next, the principle of equal treatment implies an obligation of transparency in order to enable compliance with it to be verified (see, by analogy, Case C-275/98 Unitron Scandinavia and 3-S [1999] ECR I-8291, paragraph 31)."

“76. The MOD submits that the Reasonable Tenderer would have assumed that the pass/fail score against Question 6 must have some effect on the outcome of the competition and would have appreciated that a "fail" score would lead to automatic or discretionary rejection of the tender. Reliance is placed on the expert evidence of Mr Brown and Mr Lobl that "pass/fail" questions would generally give rise to automatic or discretionary rejection. However, all the examples referred to by the experts in their reports formed part of tender documents that set out the express consequences of any failure to pass the stipulated threshold. Therefore, they do not assist in ascertaining what the Reasonable Tenderer would assume in the absence of expressly stated consequences. 77. The MOD's submission ignores the fact that, even if the Reasonable Tenderer must have assumed that a "fail" score for any part of Question 6 would have some effect, the ITT did not enable the Reasonable Tenderer to determine whether the consequence of such failure would be mandatory or discretionary rejection. If a "fail" score resulted in automatic disqualification, Question 6 would operate as a minimum threshold standard. If the right to reject were discretionary, there would be circumstances in which a "fail" score would have no effect on assessment of the tender or would have some effect on the weighting given to other scores in the tender, falling short of outright disqualification. Without knowing whether a "fail" score would lead to mandatory or discretionary rejection, the Reasonable Tenderer would not know whether, or how, that particular criterion would be weighted in the evaluation. 78. The MOD submits it is not open to MLS to base its case on any ambiguity in the ITT because such complaint was not pleaded and would be out of time. However, that is a mischaracterisation of MLS's case. MLS submits that it was unlawful for the MOD to reject its tender based on criteria that were not set out clearly, or at all, in the ITT. 79. For the above reasons, I find that, on a proper construction of the ITT, the Reasonable Tenderer would not understand whether or how a "fail" score against the response to Question 6.3 would, or could, result in a rejection of the tender. 80. Accordingly, the MOD acted unlawfully, in breach of its obligations of transparency and equal treatment, in applying criteria that were arbitrary or not sufficiently clear from the ITT and in rejecting MLS's tender on that ground.”

“Where disqualification of a Bid is an option open to a contracting authority, the principles of fairness and equality of treatment demand particular transparency and clarity: William Clinton (t/a Oriel Training Services) v Department for Employment and Learning and another [2012] NICA 48 , paragraph 35; see also MLS (Overseas) Limited v Secretary of State for Defence [2017] EWHC 3389 (TCC). If failure to meet a particular criterion or to comply with a particular requirement of the process is to result in disqualification of the tenderer, the tender documentation must clearly and transparently spell that out. Whether there is such transparency and clarity is to be determined by having regard to what the RWIND tenderer would have understood the documentation to mean: Federal Security Services Limited v Northern Ireland Court Service [2009] NIQB 15.”

“[35] The judge correctly concluded that the wording of SC1 had failed to clearly and transparently spell out to the tenderers what was expected of them if they were to satisfy the requirements of SC1, a criterion of fundamental importance to the whole process because, if not satisfied, the result was the exclusion of the tenderer from further consideration thereby excluding the tenderer from further consideration no matter how good the rest of his tender may have been. Such a criterion, a breach of which was fatal at the outset to the whole tender, was one in respect of which the principles of clarity, fairness and equality of treatment demanded particular clarity and transparency. (emphasis added) [36]. The appellants suggest that if the criterion was ambiguous it was for the respondent to ask for clarification and in the light of his failure to do so he could not complain of being disqualified for non-fulfilment of the criterion. Where, as here, a criterion is unclear and one reader may interpret it in one way (and, as noted, in this instance Mr Lynas was initially prepared to read it in the same way as the respondent) it is not an answer to the charge of lack of clarity or transparency to say that if the reader had asked for clarification he would have been told what was required. A patent ambiguity is one thing. A criterion the meaning of which may and does in fact lead one party to one approach and another reasonable party to a different one is not patently ambiguous but is simply a criterion without a clear meaning. The reader may fail to see an ambiguity. [37] In view of the conclusion reached on the first question it must follow that the DEL was guilty of manifest error in its decision to exclude the respondent from the competition.”

"Under the 2006 Regulations as amended, the principal way in which an unsuccessful bidder, such as the Claimants, can challenge the proposed award of a contract to another bidder is to show that the public body's evaluation of the rival bids either involved a manifest error or was in some way unfair or arose out of unequal treatment. Accordingly, in deciding such claims, the court's function is a limited one. It is reviewing the decision solely to see whether or not there was a manifest error and/or whether the process was in some way unfair. The court is not undertaking a comprehensive review of the tender evaluation process; neither is it substituting its own view as to the merits or otherwise of the rival bids for that already reached by the public body."

“(1) All tenderers must be treated equally; (2) It would violate that principle and the principle of good administration in the tendering process if any tenderer were permitted to change its bid after bidding had closed; (3) If the awarding authority had a discretion to seek clarification about a bid from the tenderer, the Court would not normally interfere with the exercise of that discretion unless (a) it was exercised unequally or unfairly across the relevant bidders or (b) it was not exercised, yet it appeared to the awarding authority that there was an ambiguity or obvious error which probably had a simple explanation and could be easily resolved; seeking clarification in the latter case was required in order that consideration of what might be an advantageous bid should not be excluded; it would be for the awarding authority to determine whether the clarification exercise would be simple or not; (4) But any purported clarification must not amount to a change in the bid. 31. In my judgment, the critical factor which gives rise, or may give rise, to a duty to seek clarification is where the tender as it stands cannot be properly considered because it is ambiguous or incomplete or contains an obvious clerical error rendering suspect that part of the bid. If the inability to proceed with a bid, which may be an advantageous addition to the competitive process, can be resolved easily and quickly it should be done, assuming there is no change to the bid or risk of that happening. If there is an obvious error or ambiguity or gap, clarifying it does not change the bid because, objectively the bid never positively said otherwise.”

"..although there is no element of potential abuse on the facts of this case, given the objectively verifiable nature of the mistake, if mistakes are allowed to be corrected after the deadline which are not evident on the face of the tender, that would give rise to the risk of tenderers having second thoughts, and portraying their original thoughts as erroneously recorded when there was in truth a change of position."

"Regrettably, as I have found, the mistake here was that of AAR and AAR alone. Under the terms of the Information for Applicants, it was obliged to gets its completed forms in before the deadline and failed to do so. There can be no good reason, under the principles of equality of treatment or proportionality, for permitting it to put in a complete TIF….after the deadline. Indeed to do so would run counter to the whole tender process and would be unjust to other tenderers, bound by the same terms and who had made no such mistake."

“Secondly, a waiver of terms which are stated as applying without exception is a departure from the terms of the procurement process and is therefore an exceptional course. A waiver of such terms carries the very risks of unequal treatment, discrimination and a lack of transparency which the contracting authority is required to avoid.”

“There may be circumstances where proportionality will, exceptionally, require the acceptance of the late submission of the whole or significant portions of a tender, most obviously where, as noted by Professor Arrowsmith, it results from fault on the part of the procuring authority. But in general, even if there is discretion to accept late submissions, there is no requirement to do so, particularly where, as here, it results from a fault on the part of the tenderer. In addition to the considerations already mentioned, the particular facts on which the claimant relies to characterise its case as exceptional would require investigation and determination by Devon CC and I do not see that it was required to undertake those tasks. In my judgment, the decision of Devon CC to reject the claimant’s tender was well within the margin of discretion given to contracting authorities.”

“56. Nor is the result disproportionate. The governing principles stated above are themselves a proper balance between the interests of individual tenderers and the tenderers collectively within the process to which they are subject…. … 57. It is said by Mr Clarke, however, that the result is still disproportionate because there is no real prejudice to the other tenderers even if Harrow is now allowed a contract….But in any event I do not consider that proof of actual prejudice is required so as to render proportionate a decision not to permit a correction. The principles set out above do not depend on it being shown and it is noteworthy that in paragraph 38 of his judgment in Azam Pill LJ states that while the grant of an extension of time may well adversely affect the position of other tenderers this was not essential to his conclusion. For his part Rimer LJ referred simply to the “potential” to affect other awards which the introduction of a late bidder would have – see paragraph 51.”

“The judge did not have regard to this aspect of the case. Acknowledgement of it appears to me to be a part of the duty to treat tenderers equally. A tenderer who is granted an extension of time, notwithstanding the terms of the tender, may well affect adversely the position of other tenderers. My comments in relation to bids and ranking are not, however, essential to the conclusion I have reached.”

“In my judgment the correct approach is to characterise the failure, firstly, as one of either form or content. If form, then there is a second step. If the failure relates to content, in my judgment, the second step would not fall to be considered at all. That second step would be then to consider the scope and extent of the failure. If merely trivial, then the authority could potentially waive the failure, as long as doing so would not breach the obligations of transparency and equal treatment. Further, such waiver should only be permissible in the most exceptional of cases. It is also important to differentiate between cases where the rules of the competition entitle the authority to waive non-compliance, and those that do not. Those authorities engaged in competitions where the rules specifically do not permit this will rarely be entitled to act contrary to those rules, although of course the rules will differ in case to case.”

“29….I have no hesitation in concluding that, however clear the wording of an ITT, there will at law always exist a residual discretion to waive non-compliance with the requirements of an ITT if it is necessary to do so to ensure equality, transparency and proportionality of the procedure as a whole, and doing so does not offend against those same principles. In this regard, I consider that the principles distilled by Humphries J in QMAC Construction Ltd v Northern Ireland Housing Executive [2021] NIQB 41 at [33] , having considered a number of the authorities to which I have also been referred in the course of argument, to be both correct and applicable to the present case: (1) The precise terms of the tender documents require close analysis in any given case. It is important to consider whether, for instance, a contracting authority has reserved to itself a wide discretion to admit late tenders or permit missing documents to be furnished after a deadline has expired or whether a bright line exclusionary rule has been adopted. (2) Even where a bright line rule appears, a contracting authority must consider the principle of proportionality. There may be exceptional circumstances, such as the fault of the authority, which justify the admission of a late tender or missing document. (3) Where the contracting authority does have a discretion, it must only exercise it in accordance with the principle of equal treatment. One element of this requires that any missing documents or information must objectively be shown to pre-date the tender deadline. (4) The starting point is that deadlines are to be respected and only exceptionally should a contracting authority permit the submission of late or missing information. 30. Thus, however clear the terms of an ITT, I consider that according to regulation 18 it will always be necessary for a contracting authority to satisfy itself on the facts of a given case that strictly applying the stated rules is the appropriate course in order to satisfy the overall requirements of equality, transparency and proportionality.”

“Lastly, it is ultimately for the Court to determine whether a tenderer’s replies to requests from the contracting authority for clarification can be regarded as explanations of the terms of the tender or whether those replies go beyond clarification and modify the substantive terms of the tender in relation to the conditions laid down in the contract documents” (iii) In Tideland Signal v Commission above, there was a duty to correct errors in a tender based on proportionality which contained a reference to the period of the tender. It was held that there was an ambiguity in the tender which “probably has a simple explanation and is easily resolved.”

“As I have explained, article 41 of Directive 2004/18 imposes on contracting authorities a duty to inform any unsuccessful candidate, on request, of the reasons for the rejection of his application. Guidance as to the effect of that duty can be found in the judgment of the Court of First Instance in Strabag Benelux NV v Council of the European Union (Case T-183/00) [2003] ECR II-138 , paras 54-58, where the court stated (para 54) that the obligation imposed by an analogous provision was fulfilled if tenderers were informed of the relative characteristics and advantages of the successful tenderer and the name of the successful tenderer. The court continued (para 55): “The reasoning followed by the authority which adopted the measure must be disclosed in a clear and unequivocal fashion so as, on the one hand, to make the persons concerned aware of the reasons for the measure and thereby enable them to defend their rights and, on the other, to enable the court to exercise its supervisory Jurisdiction.” “The reasoning followed by the authority which adopted the measure must be disclosed in a clear and unequivocal fashion so as, on the one hand, to make the persons concerned aware of the reasons for the measure and thereby enable them to defend their rights and, on the other, to enable the court to exercise its supervisory Jurisdiction.”

“For the Pricing Schedules to be considered compliant, the requested prices and information Base Costs, Overhead, profit expectation and FTE numbers must be supplied where requested. The check sheet tab provides an overview of the completed document.”

“You must comply with the rules in this Bid Pack and any other instructions given by us.” (v) DWP had an express right to exclude a bidder which submitted a non-compliant bid under paragraph 6.9.2 of Attachment 1 of the ITT. There was also an express right to revert to the bidder and seek to verify information or seek clarification or require evidence of further information about the bid, but that did not remove the option to exclude the non-compliant bid. There is a curious syntactical matter which is that the exact words say: “Our rights…exclude you if you submit a non-complaint bid”

“It was clear from elsewhere in the ITT that bidders needed to comply with the tender instructions and that non-compliant bids could be excluded. The tender documentation needs to be assessed in its commercial context; the RWIND tenderer would have understood that bids containing prices for service lines in excess of Framework Maximum Prices could not be contractualised, hence would need to be excluded from the competition.”

“You also seek to argue that DWP should have sought to clarify the position with your client. In reality there was nothing to clarify. Prices had been submitted and what your client really seeks is a second chance to correct its errors in its pricing submission in order to make it compliant with the requirements of the procurement. The winning bidder submitted a compliant bid and simply allowing a bidder a second chance to change its pricing would offend the equal treatment and transparency requirements under Regulations 56(4) and/or Regulation 18(1) of the PCR. It would simply not be a fair and transparent process to allow one bidder to correct pricing errors in its bid in order to make it compliant and avoid disqualification when another bidder has correctly complied with the rules of the competition. Other than allowing your client to change its bid or evaluating the bid based on a price other than what was submitted, both of which would be unacceptable under a regulated procurement process, we do not see what proportionate alternative your client believes should have been followed. The procurement documents set out very clearly that pricing above the framework prices was not permitted and there was no discretion around disqualification if that requirement was breached. There is also a separate right to disqualify non-compliant bids under clause 6.9.2.”

“231. It is therefore not the case that the obligation of transparency, and the principle of legal professional privilege, conflict. Rather it is that the two principals have to be considered consistently with each other. In my judgment, compliance by the NDA with its obligations of transparency has to be considered consistently with the fundamental right the NDA has to keep the contents of the Burges Salmon Review privileged, such that neither Energy Solutions nor the court are entitled to consider its contents. 232. The NDA could, had it wished, have waived privilege in that review and the other documents, but chose not to do so, as Akenhead J found was its fundamental right. The fact that the NDA did not do so does not fall to be weighed by the court at all. Accordingly, no adverse inferences can be drawn from the absence of any detail of that review, and to be entirely fair to Energy Solutions, the court is not invited to do so.”

“…While I do not suggest that it is or need be the norm for the actual decision-maker to attend court to give evidence about their reasons and reasoning, I do not accept that the combination of a briefing plus a decision will always be sufficient evidence to substantiate what were the reasons in a particular case. Nor do I accept that the briefing and decision are the only sources of evidence that may be available and admissible. The questions of inference and proof are to be resolved on the basis of all relevant and admissible evidence.”

“…it is a change in the terms of the bid. The bid clearly said one thing and now it says something different. The fact that the bidder did not intend it to be thus is irrelevant in my view.”