Electronic tendering mishaps

Monday May 16th, 2011

By Ruth McNaught, Solicitor, Harper Macleod LLP 

It has been reported that two legal aid firms have been unsuccessful in tendering for key legal work owing to an IT error occurring during the tender process – R (on the application of Hoole & Co) v Legal Services Commission and R (on the application of All About Rights Law Practice) v Legal Services Commission.

Both firms submitted tenders for contracts with the Legal Services Commission (LSC) through the LSC’s electronic portal. Both were unsuccessful after IT errors caused them to send blank tender documents. The firms claimed that the LSC ought to have informed them that some of the documents were blank, and given them the opportunity to resubmit their bids.

The High Court ruled that the LSC was under no obligation to inform the firms that some of their tendering documents were blank and that while there had been software problems with the portal, in these two cases the error originated with the tendering firms, and was not due to any technical failure by the LSC or its IT contractor.

In both cases, the court held that the procurement principles required the LSC to treat every tenderer equally and so it would not have been fair for the LSC to allow the two firms to amend their bids.

In light of this case, how should a contracting authority respond when a tenderer makes an error in submitting documents to an eTendering system and wants the authority to accept a missing or corrected document after the tender submission deadline has passed?

The answer depends on the specific circumstances. It is best practice for the tender documentation to clearly communicate that the deadline for submission is strictly applied and that submissions will not be accepted after the deadline. The documentation should also make it clear that tenders may be rejected if answers are incomplete.

If the tender documentation outlines these points clearly and the error was solely the fault of the tenderer, there is no obligation for the authority to extend the deadline.  Courts have upheld decisions by contracting authorities to rigidly uphold their tender deadlines.

Notwithstanding that an authority is not obliged to accept a late tender, it does of course have the discretion to do so. The authority must, however, treat all tenderers equally and make sure that all are made aware of and given the benefit of any agreed extension to a deadline for submission of tenders.

Where the error was caused by the authority, the principle of proportionality would require the authority to exercise its discretion and extend the deadline accordingly. This would be the case where, for example, an IT error occurred in the authority’s software.

A more complex situation arises where a tender is not submitted within the deadline due to the fault of a third party, for example,where a tenderer cannot upload their submission due to a power cut. Case law has indicated that in such cases, the tenderer can be found to be partly responsible for not meeting the deadline if they have left submission of the tender until close to the deadline for submissions, giving the authority grounds to refuse to extend the deadline. Such a refusal would be further justified if the authority had made it clear in the tender documents that it is up to tenderers to ensure that they give themselves sufficient time to upload tender documents in case of technical difficulties.

Ruth is a solicitor at Harper Macleod LLP and can be contacted on ruth.mcnaught@harpermacleod.co.uk

www.harpermacleod.co.uk

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