Introduction

The Judgment in Working on Wellbeing Ltd t/a Optima Health v Secretary of State for Work and Pensions & Anor ([2025] EWCA Civ 127) addresses a highly complex public procurement dispute involving an economic operator (Optima Health) and the Department for Work and Pensions (DWP). The case concerns three interrelated issues:

• The interpretation of the Invitation to Tender (ItT) language regarding whether a bid exceeding the Framework Maximum Prices automatically mandates exclusion or merely requires the price to be “discounted” (i.e. reduced).
• The scope of DWP’s discretion – or their duty – to seek clarification when obvious errors in the pricing schedule are identified, especially in instances where the error has a trivial financial impact.
• The limits on post-tender clarification requests without breaching the fundamental principles of equal treatment and transparency integral to public procurement.

These issues are of public importance because they determine the balance between strict compliance and flexible, commercially sensible evaluations in tender competitions. At the heart of the dispute is the interpretation of an allegedly ambiguous clause in the ItT, and whether the best bid should be disqualified on technical grounds rather than allowed rectification.

Summary of the Judgment

The Court of Appeal found that the disputed paragraph in the ItT did not constitute a mandatory exclusion clause. Rather, from the perspective of a reasonably well-informed and normally diligent (RWIND) tenderer, the term “discounted” ought to be interpreted as requiring the reduction of any line item that exceeds the Framework Maximum Prices without disqualifying the entire bid.

In reaching its conclusions, the court held that:

• The language of paragraph 2.2, when read in context, did not signal automatic disqualification but instead mandated discounting of non-compliant line items.
• DWP’s failure to seek clarification on obvious clerical errors — which amounted to a negligible 0.02% adjustment overall — was erroneous and represented an unfettered exercise of discretion based on a misinterpretation of the ItT’s terms.
• The principles of equal treatment and transparency, while critically important, do not eliminate the duty of a contracting authority to obtain clarification when an error or ambiguity is material and obvious.

Ultimately, the court concluded that DWP’s decision to exclude Optima Health’s bid was irrational and disproportionate. Had DWP sought clarification or adjusted the erroneous line items as per the natural commercial expectation, Optima would have been awarded the call-off contract.

Analysis

Precedents Cited

The judgment relies on a robust body of case law and legislative principles to frame its analysis:

• Healthcare at Home Ltd v The Common Services Agency: This case reinforces the requirement for procurement rules to be "clear, precise and unequivocal." Its objective test – that of the reasonably well-informed and normally diligent tenderer – is fundamental to assessing ambiguous language in the ItT.
• Clinton (t/a Oriel Training Services) v Department for Employment and Learning: The Northern Ireland High Court’s approach in this case emphasised that any potentially fatal criterion in a tender must be expressed with absolute clarity and transparency.
• Leadbitter, Energy Solutions, and Azam & Co Solicitors v Legal Services Commission: These cases discuss the stringent approach toward waivers of ItT conditions and highlight that waiving stipulated tender conditions is an exceptional measure. They also clarify the limited circumstances in which a contracting authority may correct or seek clarification for errors.
• European Authorities – Including Tideland Signal and SAG ELV Slovensko: The European case law discussed explains that strict and literal application of error rules may lead to the exclusion of economically advantageous bids. The principles of proportionality and good administration encourage a flexible approach, permitting post-tender clarifications that do not fundamentally change the nature of the bid.

Legal Reasoning

The court’s legal reasoning hinged on several key principles:

• The RWIND Tenderer Test: The decision underscores that a tenderer, acting diligently, would have reasonably interpreted “discounted” as meaning that any price submitted in excess of the Framework Maximum Prices would simply be reduced to that maximum, rather than triggering blanket disqualification.
• Discretion and Duty to Clarify: The judgment criticizes DWP for not using its discretion to seek clarification on obvious errors and ambiguities. It emphasizes that when errors are both evident and potentially material to the evaluation process—even if the financial impact is trivial—the contracting authority is obliged to request clarification rather than rely on an inflexible exclusion.
• Equal Treatment Versus Outcome Optimization: Although the principles of equal treatment and transparency are vital, they cannot serve as an absolute barrier to clarifications that ensure a proper evaluation of the best bid. The court held that these principles must be balanced against the primary objective of fostering healthy competition and effective procurement outcomes.

Impact on Future Cases and Procurement Law

This judgment sets an important precedent in public procurement law:

• It limits the scope for literal interpretations of exclusion clauses in tender documents. Contracting authorities must ensure that their ItT documents are not only precise but also allow for a degree of flexibility in cases of clerical error.
• It re-establishes the necessity for a contracting authority to exercise its discretion by actively seeking clarification in the presence of material and obvious errors, rather than immediately disqualifying bids.
• The decision reinforces that, in disputes, the balance between procedural equality and commercial sense should favor remedies that allow the economically best bid to win – especially when the error in question is de minimis.

Complex Concepts Simplified

Several complex legal concepts arise in this judgment:

• Mandatory Exclusion vs. Discounting: The contentious term “discounted” was central. Rather than meaning that a tender is automatically excluded if a price exceeds a set maximum, it may simply require the erroneous price to be reduced to the maximum allowable sum.
• Discretion to Seek Clarification: Public procurement rules allow authorities to ask for further details when a tender contains an obvious error or an ambiguity that affects the evaluation. This is not a breach of equal treatment provided the request is fair and uniformly applied.
• Proportionality and Rationality: These principles serve to ensure that any decision made by a contracting authority – including disqualification – must be balanced against the actual impact of the error. If the error is trivial (as here, affecting only 0.02% of the price), to exclude an otherwise superior bid would be disproportionate.

Conclusion

In summary, the judgment significantly clarifies the legal landscape for public procurement. It establishes that:

• The language in tender documents must be interpreted from the perspective of a reasonably well-informed tenderer. A term such as “discounted” should be understood to mean that any line item exceeding a predetermined price cap is automatically reduced in line with the maximum rather than triggering an automatic exclusion.
• Contracting authorities have a duty—not merely a discretionary power—to seek clarification when faced with obvious, material, yet clerical errors. Failure to do so may result in an irrational and disproportionate decision that undermines the public interest and the principle of obtaining the best economic outcome.
• While the principles of equal treatment and transparency remain fundamental, they must be balanced against the necessity to ensure a fair competition that does not penalize the tenderer for minor, remediable errors.

This judgment, therefore, serves as a warning to contracting authorities to review their tender documents and internal processes carefully, ensuring that errors are managed in a manner that both respects legal principles and promotes an optimal procurement outcome. In the broader legal context, it represents a shift towards a more pragmatic and commercially sensible approach to public procurement disputes.

Final Remarks

The Judgment provides meaningful insights into the interplay between stringent adherence to procurement rules and the need for flexibility under exceptional circumstances. By rejecting an overly literal interpretation of exclusion clauses and affirming the duty to clarify obvious errors, the court has set a new precedent that is likely to influence future public procurement disputes. This balanced approach protects both the integrity of the tender process and the public interest in achieving cost-effective and high-quality procurement outcomes.