Introduction

The case A C Whyte & Company Limited vs Renfrewshire Council ([2020] CSOH 82) addresses critical issues surrounding public procurement processes, specifically focusing on the obligations of transparency and equal treatment under the Public Contracts (Scotland) Regulations 2015. The dispute arose when Renfrewshire Council awarded a contract for external works to Procast Building Contractors Limited, leading A C Whyte & Company Limited ("the pursuer") to claim that the award process breached procurement regulations.

Summary of the Judgment

The Scottish Court of Session, presided over by Lord Tyre, dismissed the pursuer’s claim. The court found that Renfrewshire Council acted within its discretion and complied with the Public Contracts (Scotland) Regulations 2015, particularly regulation 19(1), which mandates transparency and equal treatment. The council's decision to award the contract to Procast was deemed lawful, as Procast met the necessary financial criteria through a consortium, and the council did not breach any procedural obligations. Additionally, the court addressed and dismissed the issue of whether the claim was time-barred, ultimately granting a decree of absolvitor in favor of the council.

Analysis

Precedents Cited

The judgment references several key precedents that shape the court’s approach to public procurement disputes:

• BY Development Ltd v Covent Garden Market Authority [2012] EWHC 2546 (TCC) - Emphasizes the court's limited role in reviewing procurement decisions, focusing on manifest error or unfairness rather than substituting its judgment for that of the contracting authority.
• Glasgow Rent Deposit & Support Scheme v Glasgow City Council [2012] CSOH 199 - Highlights that the court must not encroach on the broad discretionary judgments of contracting authorities unless basic procurement principles are violated.
• Easycoach Ltd v Department for Regional Development [2012] NIQB 10 - Reinforces the principle that contracting authorities must adhere strictly to the published rules, ensuring transparency and fairness in the assessment of tenders.
• Johnson & Johnson Medical Ltd v Greater Glasgow Health Board [2016] CSOH 12 - Discusses the timing for bringing procurement-related claims, establishing standards for when claims are considered time-barred.
• Sita UK Ltd v Greater Manchester Waste Disposal Authority [2011] 2 CMLR 32 - Used to determine the knowledge threshold required for a claim to be considered timely.
• Bolitho v City and Hackney Health Authority [1998] AC 232 - Introduced the Bolitho test, which states that expert evidence must not only be logical but also capable of withstanding critical scrutiny.

Legal Reasoning

The court meticulously examined whether Renfrewshire Council adhered to the transparency and equal treatment obligations under regulation 19(1). Key points in the legal reasoning include:

• Assessment of Tender Compliance: The court found that Procast’s tender, submitted as part of a consortium, met the minimum turnover requirement when considering the combined turnover of the consortium members, despite individual members not meeting the threshold alone.
• Discretion in Procurement: It was established that the council had significant discretion in evaluating tenders and could accept alternative proofs of financial standing, as provided by Procast’s consortium.
• Non-Requirement of Consolidated Accounts: Expert testimonies confirmed that there was no legal obligation for consortium members to submit consolidated accounts, and existing accountancy practices did not mandate such.
• Consistency with ITT Terms: The council adhered to the Invitation to Tender (ITT) terms, particularly regarding self-certification of financial standing and the consideration of consortium bids as alternative proposals.
• Failure to Demonstrate Unfairness: The pursuer failed to prove that the council's actions were unfair or that any procedural deviations adversely affected the procurement process.

Impact

This judgment reinforces the discretion of public bodies in procurement processes, provided they act within the bounds of established regulations. Key impacts include:

• Affirmation of Discretionary Power: Public authorities retain broad discretion in evaluating tenders, especially in complex consortium arrangements.
• Clarification on Financial Assessments: The case clarifies that unless explicitly stated in the ITT, contracting authorities are not obligated to adjust turnover figures for inter-company transactions within consortia.
• Guidance on Time Bars: Establishes how knowledge of procurement breaches affects the timing of legal actions under procurement regulations.
• Encouragement of Consortium Bids: By upholding the council’s decision to accept a consortium bid based on combined turnover, the judgment may encourage more collaborative bids in future procurements.

Complex Concepts Simplified

Consent of Consortium Tenders

A consortium in public procurement refers to an association of multiple companies that work together to fulfill a contract. In this case, Procast Building Contractors Limited partnered with two other companies to meet the financial requirements specified in the ITT.

Self-Certification in ESPD

The European Single Procurement Document (Scotland) serves as a self-declaration tool where bidders assert their compliance with the procurement criteria. While it simplifies the submission process, it relies on the accuracy and honesty of the bidders, as seen with Procast's initial misrepresentation.

Regulation 19(1) of the Public Contracts (Scotland) Regulations 2015

This regulation mandates that contracting authorities must treat all economic operators equally, without discrimination, and act transparently and proportionately throughout the procurement process.

Standstill Period

A standstill period is a mandatory waiting period after announcing the award decision and before finalizing the contract. It allows unsuccessful bidders to challenge the decision if they believe there has been a procurement breach.

Manifest Error

In legal terms, a manifest error refers to a clear and obvious mistake in judgment or fact made by a decision-maker that affects the outcome of the decision. The court in this case assessed whether the council's decision was fundamentally flawed in such a manner.

Conclusion

The judgment in A C Whyte & Co Ltd vs Renfrewshire Council underscores the importance of adhering to established procurement regulations while recognizing the discretionary power of public bodies. By affirming that Renfrewshire Council acted within its rights and followed due procedures, the court provided clarity on handling consortium bids and the application of financial criteria without overstepping into the council’s evaluative processes. This case serves as a precedent for future procurement disputes, highlighting the balance between regulatory compliance and administrative discretion.

For practitioners and entities involved in public procurement, the decision emphasizes the necessity of clearly outlined criteria in ITTs and the permissible boundaries of discretion granted to contracting authorities. Additionally, it illustrates the court's role in ensuring fairness without unduly intervening in the operational decisions of public bodies, provided they operate within the legal framework.