Judicial review of contract award decision refused

Thursday November 10th, 2011

By Daradjeet Jagpal, Solicitor, Harper Macleod LLP

In Hossacks (A firm of Solicitors) v The Legal Services Commission, the High Court dismissed an application for judicial review of a decision by the Legal Services Commission to reject a tender for the provision of legal services.

The Legal Services Commission (LSC) launched a tender process for the provision of community care legal services. 135 separate invitations to tender were issued, covering different areas of England and Wales. The ITT required that tenderers have a part-time office in the area where the services were to be provided. Hossacks bid for contracts in 125 of the 135 areas, submitting a pro forma containing the same information for each area. The pro forma was based on only one of the areas (Wiltshire), which resulted in Hossacks not answering specific questions concerning the other areas and failing to provide the location of its individual offices in particular areas. 124 of Hossacks’ bids were rejected on the basis that they failed to meet the contract award criteria. This included a bid for Northamptonshire, where, contrary to its erroneous tender submission based on the pro forma, Hossacks operated a full-time rather than a part-time office. Hossacks applied for judicial review of the LSC’s decision.

The first issue which the High Court considered was whether it was unreasonable for the LSC to reject Hossacks’ bid for Northamptonshire. Hossacks argued that the error was trivial, could have been corrected without prejudicing other bidders and that it could have been awarded a contract on the basis that it had a part-time office (as per the erroneous bid). LSC contended that the error was fundamental and that Hossacks’ bid was ineligible on the basis that it had inadequate staff levels to service the contract. The High Court agreed with LSC. LSC had assessed the bids in the correct manner. The error could not have been rectified by a simple change of location from Wiltshire to Northamptonshire; it would involve a fundamental restructuring of the bids. In addition, the High Court was of the view that it would be inappropriate for Hossacks to be awarded a contract on a fundamentally false premise.

The next issue was whether it would have been reasonable for the LSC to seek to clarify Hossacks’ bid, given the errors. The High Court did not consider that the LSC was under such a duty to clarify on the basis that the type of clarification which Hossacks claimed should have been made went beyond simply clarifying the difference between two data sets and extended to reconstructing the essence of the bid.

The third issue related to whether the LSC, in refusing to allow amendments to Hossacks’ bid, had failed to treat Hossacks equally with other bidders in similar tendering exercises in which erroneous bids had been submitted. The High Court noted that there was evidence to suggest that the LSC had sought bid clarification during other tendering processes, mainly at the PQQ stage. However, failure to meet the tender requirements had consistently been regarded by the LSC as a basis for rejection. The High Court also found that there was no evidence to suggest that the LSC had previously contacted bidders to seek clarification. Indeed, this would allow bidders to improve on their bids, thereby breaching the procurement principles of equality and transparency.

This decision highlights that the courts are reluctant to interfere with a contracting authority’s contract award decision where it can be demonstrated that the decision was taken in an objective and transparent manner. Moreover, it emphasises the importance of bidders framing their tender submissions correctly, particularly since opportunities to clarify any ambiguities post-submission may be limited or non-existent.

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

www.harpermacleod.co.uk

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