Incorrect assessment and application of award criteria

Tuesday May 24th, 2011

By Daradjeet Jagpal, Solicitor, Harper Macleod LLP

In Harry Yearsley v The Secretary of State for Justice, the High Court considered if inconsistencies between the assessment and application of award criteria and weightings as outlined in the ITT, and how these were assessed and applied during the tender process, were sufficiently serious to allow the unsuccessful bidder to claim breach of the Procurement Regulations.

The Ministry of Justice (MOJ) issued a tender for the supply of frozen foods to prisons. Bidders were required to complete a pre-qualification questionnaire (PQQ) followed by a tender split into two stages, one quality-based and the other price-based. If the quality criteria were met, successful bidders were to take part in a price eAuction. The incumbent services provider (Harry Yearsley Ltd (HYL)) was placed third, with the contract being awarded to 3663.

HYL claimed breach of the Procurement Regulations and applied to the High Court for a determination as to whether a breach claim had arisen before proceeding to trial. The High Court made the following comments in response to HYL’s contentions:

  • HYL claimed that the MOJ had applied weightings in assessing the tenders which were different from those in the ITT. The MOJ noted that there was no detriment to HYL because HYL had passed the quality assessment stage, and it was the price assessment stage which was determinative. The High Court allowed the issue to proceed to trial;
  • HYL argued that 3663 and others had failed to comply with mandatory criteria relating to the production of halal meat, which would have impacted upon the dynamics of the eAuction price stage. HYL also submitted that the second-placed bidder had suggested that it would not have been interested in performing the contract. The MOJ contended that this did not affect HYL because it had passed the quality assessment stage. The High Court considered that this raised factual issues to be considered at trial;
  • HYL claimed that the contract awarded to 3663 was materially different to the tender specifications. The High Court considered that while this argument may be relevant to the halal meat argument (only if HYL could show that materiality would have affected the price that HYL proposed), it did not consider the other variations, including changes to the food to be provided and how it was to be provided, to be significant enough to merit proceeding to trial;
  • With regard to the conduct of the price eAuction, HYL argued that imposing a quality assessment stage prior to the eAuction was at odds with the ITT, which described the overall award criterion as being the most economically advantageous tender. The MOJ contended that HYL was out of time because it should have raised proceedings within three months of becoming aware of the breach in line with the Procurement Regulations. The High Court agreed with the MOJ, as the importance of the price eAuction in the award process was highlighted at the outset in the Auction Rules, and HYL could not have been in any doubt that there were irregularities in the conduct of the eAuction following communications issued by the MOJ in November 2009; and
  • HYL believed that the MOJ’s de-briefing was inadequate in that the information was provided late and was incomplete because of a failure to disclose the scores awarded to HYL and 3663 and the weightings and criteria used. The High Court allowed the issue to proceed to trial for determination.

This decision further reinforces the need to ensure that the tender process is conducted in the manner set out in the ITT. Significant deviations could expose the contracting authority to the risk of claims by unsuccessful bidders, particularly where the bidder concerned was highly placed and had a reasonably strong prospect of success.

Daradjeet Jagpal is a solicitor at Harper Macleod LLP and can be contacted on daradjeet.jagpal@harpermacleod.co.uk

 

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