Willmott Dixon this month lost a legal battle against Hammersmith and Fulham Council over the award of a housing R&M contract to Mitie. Why did it lose and what lessons does it provide for other contractors when challenging public procurement decisions?
The High Court has dismissed an action brought by Willmott Dixon Partnership (WDP) challenging a public procurement procedure carried out by the London Borough of Hammersmith and Fulham (H&F).
WDP alleged manifest errors in H&F’s evaluation process. In rejecting WDP’s claim, the court reiterated that the test of manifest error requires an error to have clearly been made and that the contracting authority is allowed a “margin of appreciation”.
In June 2012, H&F issued a tender notice in respect of a range of housing and repair services for its residential properties.
WDP, the incumbent supplier, was successful at the prequalification questionnaire stage and was subsequently invited to tender.
Having previously indicated in the PQQ that it would be performing the contract alone, WDP amended its tender immediately prior to submission such that it would subcontract the gas appliance services to PH Jones.
WDP was ultimately unsuccessful, losing out to Mitie, despite being cheaper on price.
WDP was informed that it had lost due to its quality submission, because H&F was looking for a “sea-change” in the delivery of the services and because of concerns about WDP’s performance under the current contracts.
WDP alleged a number of manifest errors in H&F’s evaluation process, including:
- The use of illegitimate criteria at the tender stage, including taking into account PH Jones’ ability to provide the gas compliance services and referring to a “sea-change” in the delivery of services; and
- A failure to act in a way that ensured equal treatment and non-discrimination between bids, as the scores awarded to Mitie and WDP did not reflect the difference in quality between the two submissions.
The court dismissed all of WDP’s allegations.
Evaluation of tenders must be limited to matters that are relevant to the identification of the most “economically advantageous tender”. This would not include a tenderer’s general ability to perform the contract.
While there was evidence that H&F had concerns about PH Jones’ ability to provide the gas compliance services, the court accepted that these related to whether there was a well-established supply chain in place (which was a legitimate consideration under the criteria).
This was a perfectly legitimate concern given WDP’s unexplained decision to use a subcontractor having previously indicated that it would not do so.
The court did not accept that H&F had introduced new criteria by referring to a “sea-change” approach to the delivery of services. H&F had indicated, as it was entitled to do, that it wished to see a change.
“If a manifest error is to be found, it needs to go beyond questioning the exercise of the discretion reserved to the contracting authority”
WDP chose to refer to the old contract as a means of explaining its proposal for the new contract.
H&F was entitled to express its view on WDP’s submission and stated that this did not represent a good response to the need for change.
In considering whether H&F had failed to correctly score the tenders, the court applied the test of manifest error and noted that it must not re-mark the tenders or substitute its own view as to the merits of rival bids.
On all but one of the items where WDP alleged mistakes, the court concluded that there was no manifest error.
In the one instance where there was an error, the court found that this would not have affected the final outcome.
Difficulty of claiming ‘manifest error’
This judgment serves as a reminder of the difficulties faced when claiming the existence of a “manifest error” in procurement disputes.
If a manifest error is to be found, it needs to go beyond questioning the exercise of the discretion reserved to the contracting authority.
“While the award of differing scores may appear to give grounds for challenging the evaluation, a claimant faces evidential problems in proving unequal treatment”
Rather, such an allegation must be founded on clear evidence – for instance, where the calculation of scores should have totalled x, the authority in fact added this up incorrectly to give a lower number of y.
Equally, the ruling demonstrates that while the award of differing scores may appear to give grounds for challenging the evaluation, a claimant faces evidential problems in proving unequal treatment.
Potential claimants should consider requesting disclosure of scoring notes from evaluation meetings, which must be carefully considered before proceeding.
Chris Busaileh is a solicitor in the construction and engineering team and Rory Ashmore is a solicitor in the competition team at Speechly Bircham