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Clarity on award criteria transparency

Friday May 17th, 2013

In March, the Court of Session in Edinburgh confirmed a previous ruling in the case of Healthcare At Home Ltd v The Common Services Agency (CSA) that the agency for the Scottish Health Service had not breached procurement rules in relation to its award of a contract to BUPA rather than Healthcare At Home.

The contract was for the dispensing and delivery of the breast cancer drug Herceptin and related nursing administration and support. The CSA’s Invitation to Tender had set out the award criteria which the agency would use in evaluating tenders, as well as the various sub-criteria and the weightings to be given to each.

Jill Fryer

Jill Fryer

 

Healthcare At Home was unsuccessful in the competition and challenged the CSA’s decision to award the contract to BUPA. Healthcare At Home’s arguments included that the CSA had not observed the principles of transparency and equal treatment due to a lack of clarity in relation to some of the award sub-criteria, CSA’s evaluation against those sub-criteria and CSA’s failure to provide adequate reasons.

The Court of Session followed established case law that contract award criteria must be formulated in such a way as to allow all reasonably well informed and normally diligent tenderers to interpret them in the same way. Tenderers may elect to respond to an Invitation to Tender in a manner which is different in both detail and content but that does not, of itself, prove that the Invitation to Tender lacked the clarity required. By contrast, if hypothetical tenderers could, understandably and plausibly, have construed the criteria in different ways then the criteria must be deemed insufficiently transparent.

The Court held that the CSA’s formulation of the criteria in the Invitation to Tender allowed all reasonably well informed and normally diligent tenderers to interpret the criteria in the same way and as they were applied by the agency.

Of particular interest is the Court’s view that the assessment of the transparency of award criteria is an objective assessment by the Court of what a hypothetical and reasonably well informed and normally diligent tenderer might anticipate or understand. The Court held that there is no need for detailed oral evidence as to the parties’ subjective views and understanding of the meaning of the criteria. As well as being a commonsense approach, this approach of objective assessment by the Court may assist in speeding up decisions in procurement cases, a trend which should be welcomed. In this case, the letter telling Healthcare At Home that it had been unsuccessful (and which triggered its subsequent challenge) was issued on 13 May 2010 – nearly three years ago.

Jill is an Associate with Harper Macleod LLP and can be contacted at jill.fryer@harpermacleod.co.uk

 

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