Factual and Procedural Background
In 2009/2010, Company B conducted a public procurement exercise for contracts to provide publicly-funded legal services related to immigration, asylum, and mental health. Over 10,000 bids were submitted, with more than 400 applicants for immigration and asylum work in the London region alone. Company A was one of 218 firms bidding in London but was unsuccessful. Company A appealed the decision in July 2010, but the appeal was refused in August 2010. Subsequently, Company A commenced judicial review proceedings in November 2010.
The tender involved seven questions under "Selection Criteria." Company A answered the first three but left Questions 4 to 7 blank. Consequently, Company B awarded no points for these unanswered questions, resulting in Company A's tender failing to meet the required points threshold to secure a contract. Company A contended that Company B should have sought clarification of these non-answers or inferred answers from other parts of the tender. Company A also alleged unequal treatment compared to other applicants.
The procedural history spans from 2010 to 2017, including delays, adjournments, and a transfer of the case to the Technology and Construction Court (TCC) in 2016. The court described the procedural conduct as unsatisfactory and excessively prolonged.
Legal Issues Presented
- Whether Company B was obliged to seek clarification from Company A regarding the unanswered Selection Criteria Questions 4 to 7.
- Whether Company B's treatment of Company A's tender was consistent with the principles of equality, transparency, and non-discrimination under the Public Contracts Regulations 2006.
- Whether Company A suffered loss or damage as a result of any alleged breach of procurement rules.
- The appropriateness and relevance of Company A's comparator evidence alleging unequal treatment.
- The sufficiency of evidence supporting Company A's claim for damages.
Arguments of the Parties
Appellant's Arguments
- Company A argued that Company B should have sought clarification of the non-answers to Questions 4 to 7 or inferred answers from other parts of the tender.
- Company A alleged that Company B treated other applicants differently, thereby breaching the principle of equal treatment.
- Company A contended that the failure to seek clarification led to a manifest error and caused loss, justifying damages.
- Company A sought to rely on comparisons with over 120 other applicants' treatment in the procurement process.
Respondent's Arguments
- Company B maintained that it was under no obligation to seek clarification where answers were left blank and no ambiguity existed.
- Company B argued that the tender rules clearly placed responsibility on applicants to fully and accurately complete their tenders.
- Company B submitted that any attempt to allow post-tender improvements would breach procurement principles and unfairly disadvantage other bidders.
- Company B demonstrated that other applicants who failed to answer the same questions were treated identically, negating claims of unequal treatment.
- Company B contended that the damages claim was inadequately supported by evidence and no new tender would have been accepted post-submission.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Lion Apparel Systems Limited v Firebuy Limited [2007] EWHC 2179 (Ch) |
Procurement must comply with principles of equality, transparency, and objectivity; courts apply appropriate scrutiny for manifest errors. |
The court applied the principles to assess whether Company B made a manifest error in treating Company A’s tender. |
| J B Leadbitter & Co Limited v Devon County Council [2009] EWHC 930 (Ch) |
Principle of proportionality in procurement; courts respect contracting authority’s judgment unless decision is unjustifiable (manifest error). |
The court referenced this to evaluate whether Company B’s failure to seek clarification was a manifest error. |
| Tideland Signal Limited v EC Commission [2002] 3 C.M.L.R 33 |
Contracting authority’s duty to seek clarification in exceptional cases where tender ambiguity is easily resolvable. |
The court used this to determine the limited circumstances under which Company B was obliged to seek clarification. |
| Antwerpse Bouwwerken v Commission (Case T-195/08) |
Clarification may be required for simple clerical errors but not to permit new tenders or substantial amendments. |
The court applied this to distinguish between clerical errors and non-answers in Company A’s tender. |
| SAG ELV Slovensko A.S [2012] 2 C.M.L.R. 36 |
Clarifications allowed only to correct obvious errors without amounting to new tenders; equal treatment must be maintained. |
Supported the court’s conclusion that clarifications must be fair and not allow tender improvements. |
| William Clinton v Department for Employment and Learning [2012] NICA 48 |
Reiterated Tideland principles; emphasized exceptional nature of duty to seek clarification and risks of new tender submissions. |
The court aligned its approach with this precedent in rejecting Company A’s broad claim for clarification. |
| Fabricom SA v Belgian State [2005] 2 C.M.L.R. 25 |
Principle of equal treatment requires comparable situations to be treated equally and different situations differently unless justified. |
The court applied this to assess Company A’s comparator evidence and found no breach of equal treatment. |
| R (Hoole) v Legal Services Commission [2011] EWHC 886 (Admin) |
Failure to complete selection criteria does not constitute ambiguity obliging contracting authority to seek clarification; strict adherence to tender rules upheld. |
The court relied on this case due to similar facts, reinforcing the rejection of Company A’s claim on unanswered questions. |
| R (Hossacks) v Legal Services Commission [2012] EWCA Civ. 1203 |
Contracting authority not obliged to seek clarifications where no ambiguity exists; equal treatment requires similar treatment of comparable flawed applications. |
The court used this to reject Company A’s argument on clarification and to confirm no unequal treatment. |
| R (All About Rights) v The Lord Chancellor [2013] EWHC 3461 (Admin) |
Rejection of blank tender forms not disproportionate; clarifications cannot be sought to allow new bids; equal treatment applies to similar failures. |
The court found this decision consistent with its rejection of Company A’s claims and comparator arguments. |
Court's Reasoning and Analysis
The court began by affirming the relevant legal principles under the Public Contracts Regulations 2006, emphasizing duties of equality, transparency, and non-discrimination in public procurement. It referenced established case law to define the narrow scope of any duty to seek clarification, which arises only in exceptional circumstances where a tender is ambiguous with a simple explanation easily resolved, or where there is a simple clerical error. The court rejected any broad or default duty to seek clarifications post-tender, especially where such clarifications would amount to a new or improved tender.
Applying these principles to the facts, the court found that Company A’s failure to answer Questions 4 to 7 was not an ambiguity or clerical error but a clear omission. In particular:
- Question 4: Company A admitted it did not employ a level 3 caseworker, so no points were due.
- Question 5: Company A was not providing a weekly drop-in session at the time of tender submission or evaluation and did not commit to doing so from October 2010 onwards. The blank answer was not ambiguous, and no clarification duty arose.
- Questions 6 and 7: These sought specific commitments about the time authorised litigators and supervisors would be based and working from the office. Information in the Tender Information Form (TIF) about current staff could not substitute for these future commitments. The failure to answer was neither ambiguous nor an error requiring clarification.
The court noted that any post-tender clarification that would allow Company A to improve its bid would violate procurement law and unfairly prejudice other bidders. It found that Company B applied the tender rules consistently and treated Company A the same as other applicants who failed to answer these questions.
Regarding Company A’s broad comparator evidence, the court held that comparisons must be confined to similar circumstances concerning the same parts of the tender. Company A’s attempt to compare treatment of unrelated tender elements was rejected as legally unfounded, unworkable, and irrelevant. The court emphasized that no breach of equal treatment occurred because Company B treated all applicants who failed to answer Questions 5 to 7 identically.
On the damages claim, the court found the evidence wholly inadequate to support the substantial sums claimed. There was no documentary evidence or sufficient witness testimony, and no basis to adjourn damages for further consideration.
Finally, the court criticized the procedural history for unacceptable delays and poor case management, noting multiple failures by Company A to comply with court orders and procedural rules over a seven-year period.
Holding and Implications
The court dismissed Company A’s judicial review claim in its entirety.
The court held that Company B did not commit any manifest error in its treatment of Company A’s tender, including its failure to seek clarification of unanswered Selection Criteria questions. Company B’s strict application of the tender rules was lawful and consistent with the principles of public procurement. The alleged breaches of equal treatment were unfounded as Company B treated all similarly situated applicants alike.
The damages claim was unsupported and thus failed. The court also condemned the protracted and inefficient conduct of the litigation by Company A.
The decision has no broader legal implications beyond affirming existing public procurement principles and the importance of strict adherence to tender rules and procedural timeliness. The direct effect is the dismissal of Company A’s claims and the need for a consequential hearing on costs and related matters.