Aquatron Marine v Strathclyde Fire Board [2007] CSOH 185

Thursday April 3rd, 2008

Scottish Procurement Directorate

Scottish Procurement Action Note

SPAN 1/2008

Date 3 April 2008

DAMAGES AWARDED BY COURT OF SESSION FOR

BREACH OF PUBLIC PROCUREMENT REGULATIONS

Issue

1. In November 2007, the Court of Session awarded damages against a Scottish public body for loss of profit amounting to £122,149 to an unsuccessful tenderer because, in awarding the contract, the public body had failed to comply with public procurement legislation. The facts of the case are summarised in the Annex to this

Note.

2. The case1 is significant because it is the first time a Scottish Court has awarded damages for breach of the public procurement regulations.The judgment, along with the new European Remedies Directive2 approved in December last year, is likely to raise awareness of the remedies available to tenderers.

Action Needed

3. Contracting authorities should note the facts of the case and consider the implications for procurement practice in their own organisations.

Dissemination

4. Please bring this SPPN to the attention of all relevant staff within your field ofresponsibility to whom this Note may be of interest.

Contact

5. Enquiries about this Note should be should be addressed to Jessie Laurie, Scottish Procurement Directorate, telephone 0141 242 5672 or e-mail jessie.laurie@scotland.gsi.gov.uk.

  1. Aquatron Marine v Strathclyde Fire Board [2007] CSOH 185
  2. European Remedies Directive (2007/66/EU)

Scottish Procurement Directorate

The Scottish Government

1st Floor, Meridian Court

5 Cadogan Street

Glasgow G2 6AT

Annex

Aquatron Marine v Strathclyde Fire Board [2007] CSOH 185

Background

1. The case concerned a competitive tendering process for a contract for the provision of services relating to the maintenance and repair of breathing apparatus. The contracting authority chose to follow the “open procedure” for tendering. It published a contract notice in the Official Journal of the European Union which specified the award criteria as follows:

“Economically most advantageous tender complying with technical specifications, i.e. price, delivery date, running costs, cost effectiveness, after sales service, compatibility, but not necessarily in that order.”

2. The detailed specification in the Invitation to Tender (ITT) drawn up by the contracting authority included the following requirements:

Clause 11: the successful tenderer must ensure that its workforce shall be fully qualified and have the relevant experience and training to undertake the contract work in a safe and effective manner. The tenderer must, when submitting its tender, include copies of any evidence of quality standards achieved by its workforce.

Clause 12: the successful tenderer must, in its tender documentation, submit evidence of accreditation to ISO 9001, 2000 issued by a recognised accreditation centre.

Clause 27: the successful tenderer must, in its tender documentation, submit details and qualifications of their Health and Safety representative and a copy of their Health and Safety policy.

3. The tender submitted by the unsuccessful bidder, Aquatron Marine, included a covering letter stating that its staff were experienced in the range of equipment covered and had attended the manufacturer’s work courses, an ISO certificate issued by QMS International, and a Health and Safety policy. It also provided further information to the contracting authority at a subsequent clarification meeting, stating that it would employ a further member of staff if awarded the contract.

4. In evaluating the Aquatron Marine tender, the contracting authority overlooked

the contents of the covering letter. It decided that Aquatron Marine:

  • had not supplied any information on any employees with its tenderdocumentation;
  • had not provided an ISO certificate issued by United Kingdom AccreditationService (UKAS);
  • had no personnel with Health and Safety qualifications.

5. The contracting authority concluded that Aquatron Marine’s tender had failed to comply with Clauses 11, 12 and 27 of the specification and should therefore be excluded from the evaluation stage. The contracting authority concluded that only one tender did comply with the specification and awarded the contract to that supplier without further evaluation.

6. Aquatron Marine brought proceedings in the Court of Session on the grounds that the contract had been awarded in violation of the principle of equal treatment of tenderers3 and of certain provisions of the Public Services Contracts Regulations 1993 (now superseded by the PublicContracts (Scotland) Regulations 2006).

Judgment

7. The Court held that the exclusion of Aquatron Marine from the tendering process at the first stage of determining compliance with the specification amounted to a breach of the 1993 Regulations and the principle of equal treatment. Under Regulations 84 and 165 of the 1993 Regulations, any technical specification must be stated in the contract documents. A tenderer may not therefore be excluded from evaluation by reason of some unspecified technical defect or because of a failure to provide information not expressly called for. In this instance, the specification in the ITT did not lay down minimum requirements and quality and technical merit were not included in the published award criteria. Furthermore, under Regulation 216 of the 1993 Regulations, a contract must be awarded on the basis of lowest price or the most economically advantageous tender.

8. The Court noted that Clause 11 of the ITT did not set down any minimum requirement which a tenderer was required to meet. It simply asked for evidence of quality standards achieved by the workforce to be forwarded with the tender. If a tenderer’s workforce had not achieved any quality standards then no evidence could be forwarded. Whilst this might prejudice the tenderer at the evaluation stage (depending on the criteria laid down), the fact that no evidence was produced could not be used as a means to exclude a tenderer. Secondly, the specification referred to the standards achieved by the workforce. While the contracting authority intended this to mean that that employees’ CVs should be provided with the tender, this would not have been clear to a reasonably informed tenderer. Finally, the contracting authority did not consider Aquatron Marine’s submission that it intended to employ an additional member of staff if awarded the contract.

9. The Court also held that Aquatron Marine was able to show that its ISO certificate was issued by a recognised accreditation centre (QMS International) and had therefore complied with Clause 12 of the ITT. The contracting authority should not have excluded Aquatron Marine on the ground that its ISO certificate was not issued by UKAS or a European equivalent as this was not required by the specification.

10. It was noted by the Court that Clause 27 did not require that any minimum qualification be held by a tenderer’s Health and Safety representative and that there was no minimum requirement relative to the content of any Health and Safety policy submitted. Therefore, the unsatisfactory documentation and lack of evidence of qualifications should not have been used to exclude Aquatron Marine from the evaluation process.

3 Commission v Denmark (“Storeboelt”) [1993] ECR I -3353, para 33

4 The Public Contracts (Scotland) Regulations 2006, Regulation 9

5 Ibid. Regulation 25

6 Ibid. Regulation 30

11. The Court held that the contracting authority had not considered Aquatron Marine’s tender in full and had therefore breached the principle of equal treatment of tenderers.

Assessment of damages

12. In order to assess the level of damages that should be awarded, the Court looked at what would have happened had a comparative evaluation of the tenders taken place. With the exception of price, the evaluation criteria specified in the contract notice were irrelevant or insignificant in the context of the contract under consideration. Therefore, the tenders fell to be evaluated on price alone. As Aquatron Marine had submitted the tender with the lowest price, the Court concluded that had the criteria been applied properly in terms of the Regulations, Aquatron Marine would have been awarded the contract. The damages awarded were £122,149 reflecting Aquatron Marine’s tender price less the cost of providing the services.

Scottish Procurement Directorate

April 2008

Leave a Reply

debug