Introduction

The case of CAPITA Business Services Ltd v The Common Services Agency for the Scottish Health Service ([2023] ScotCS CSOH_9) addresses pivotal issues concerning the integrity and transparency of public procurement processes. The Scottish Court of Session deliberated on the disqualification of Capita Business Services Limited (hereafter referred to as "the Pursuer") by the Common Services Agency for the Scottish Health Service (hereafter referred to as "the Defender") during the procurement of the Scottish Wide Area Network Replacement Programme (SWAN 2).

The SWAN program is a critical infrastructure initiative aimed at enhancing broadband connectivity across Scotland’s public sector organizations. The Defender sought to award a substantial framework agreement valued at £350 million to a single supplier for a six-year term, commencing April 2023. Capita, the incumbent service provider under the previous SWAN 1 program, contested the Defender's decision to disqualify its bid, claiming non-compliance with the Public Contracts (Scotland) Regulations 2015.

Summary of the Judgment

The Scottish Court of Session, with Lord Braid delivering the judgment, upheld the Defender's decision to disqualify Capita’s bid. The core of the judgment rested on the assertion that Capita's submission was materially incomplete, failing to provide a fully priced bid in accordance with the procurement instructions. Specifically, Capita did not adequately price the costs associated with infrastructure build required to deliver Fiber to the Premises (FTTP) services, which was a significant component of the SWAN 2 requirements.

The court concluded that the Defender had adhered to the principles of transparency and equality as mandated by the Public Contracts (Scotland) Regulations 2015. Capita's bid was found to be non-compliant due to its omission of essential pricing elements, leading to its disqualification. Consequently, the court dismissed Capita’s challenges and affirmed the Defender's right to proceed with awarding the contract to the alternate bidder.

Analysis

Precedents Cited

The judgment references several key precedents that underpin the principles of public procurement:

• SIAC Construction Limited v County Council of the County of Mayo [2001] 3 CMLR 59: Emphasizes that equal treatment necessitates transparency to verify compliance.
• Energysolutions EU Limited v Nuclear Decommissioning Authority [2012] EWHC 1988 (TCC): Reinforces the importance of consistent application of rules between different bidders.
• Healthcare at Home Ltd v Common Services Agency [2014] UKSC 247: Establishes that award criteria must be clear enough for all reasonably well-informed tenderers to interpret uniformly.
• Stagecoach East Midlands Trains Ltd v Secretary of State for Transport [2020] EWHC 1568 (TCC): Highlights that discretionary powers in procurement must not be exercised arbitrarily or capriciously.

These precedents collectively informed the court’s assessment of whether the Defender’s actions complied with statutory obligations regarding fairness, transparency, and equal treatment in the procurement process.

Legal Reasoning

Lord Braid meticulously dissected the procurement process, focusing on the clarity and completeness of the Defender’s Instructions to Bidders. The judgment underscored that the procurement documentation unequivocally required bidders to provide fully priced bids without assumptions, especially concerning critical infrastructure costs.

The court evaluated whether Capita’s bid contained any pricing assumptions and whether these assumptions rendered the bid materially incomplete. It was determined that Capita’s strategy to omit infrastructure build costs while offering FTTP services constituted a pricing assumption that compromised the bid's completeness. The Defender's role in ensuring that all bids adhered to the requirement for price certainty was reaffirmed.

Additionally, the court affirmed that the Defender acted within its rights to disqualify a bid that was not fully compliant, as per the explicit terms outlined in the procurement documentation. The principles of proportionality and rationality were satisfied, as the Defender's decision was deemed neither arbitrary nor disproportionate given the significant omission in Capita’s bid.

Impact

This judgment reinforces the paramount importance of transparency and completeness in public procurement. It sets a clear precedent that:

• Bidders must adhere strictly to procurement guidelines, ensuring that all required components, especially those pertained to pricing, are fully addressed without reliance on assumptions.
• Public entities retain the authority to disqualify bids that fail to meet the stipulated requirements, thereby safeguarding the integrity of the procurement process.
• The clarity of procurement documents is crucial; any ambiguities can be grounds for disputes but must meet the standard of understandability for reasonably well-informed tenderers.

Future procurement processes within Scotland, and potentially beyond, will likely reference this judgment to advocate for stringent adherence to bid requirements, thereby enhancing fairness and competition.

Complex Concepts Simplified

Public Contracts (Scotland) Regulations 2015

A set of rules governing how public sector bodies in Scotland must conduct procurement activities. They ensure that procurement processes are fair, transparent, and competitively open to all qualifying bidders.

Whole Life Cost

The total cost of ownership of a service or asset over its entire period of use. In procurement, it involves accounting for all costs from initial acquisition to disposal, ensuring that bids reflect not just upfront costs but also long-term financial implications.

ECJ's RWIND Tenderer

Refers to the "reasonably well-informed and normally diligent" tenderer as envisaged by the European Court of Justice. This hypothetical entity is used as a benchmark to assess the clarity and completeness of procurement documentation.

FFIB (Full Fibre Infrastructure Build)

A service provided by network carriers, such as Openreach, involving the deployment of full fibre infrastructure to enable high-speed internet connectivity. It is a critical component for delivering services like FTTP.

Conclusion

The judgment in CAPITA Business Services Ltd v The Common Services Agency for the Scottish Health Service serves as a critical reminder of the rigorous standards required in public procurement. It underscores the necessity for bidders to present complete and transparent bids, fully accounting for all costs without relying on assumptions that could undermine the bid's integrity. For public entities, the ruling reinforces the right—and indeed, the obligation—to enforce compliance with procurement guidelines strictly. Moving forward, both bidders and procuring bodies must ensure clarity in bid submissions and procurement documentation to foster fair competition and effective public service delivery.