Veolia Water UK Plc & Ors v Fingal County Council

Factual and Procedural Background

This judgment concerns a preliminary issue arising in substantive proceedings brought by the Plaintiff consortium against the Defendant regarding the award of a contract for the survey, design, and installation of a water metering system for non-domestic water supply across four local authority areas. The Defendant acted as the lead authority in the award process. The Plaintiff was an unsuccessful tenderer and challenges the award on multiple grounds. The Defendant contends that the Plaintiff’s challenge is out of time.

The contract aimed to ensure compliance with national obligations under EU law and government water pricing policy, requiring local authorities to meter and charge non-domestic customers for water and wastewater services by 31 December 2006. The contract was of significant value, with the successful tender just under €50 million.

The tender process required submission of a principal tender and allowed alternative tenders, with evaluation based on the most economically advantageous tender. Two tenderers submitted tenders, including principal and alternative bids. The Plaintiff was notified on 6 September 2005 that its tender was unsuccessful and that the contract would be awarded to a competitor. Subsequent communications between the parties ensued until a meeting on 19 December 2005, after which proceedings were instituted on 23 January 2006, following a notice of intention served on 16 January 2006.

The preliminary issue before the court concerns compliance with the time limits set out in the Rules of the Superior Courts, specifically whether the Plaintiff made its application at the earliest opportunity and within three months of the grounds arising, or whether there is good reason to extend the time period.

Legal Issues Presented

1. Whether the Plaintiff complied with the requirement to bring the application at the earliest opportunity and within three months from when the grounds for the challenge first arose under Order 84(A) Rule 4 of the Rules of the Superior Courts.
2. If not, whether the Plaintiff has demonstrated good reason for extending the three-month period for bringing the challenge.
3. Whether the Defendant wrongly excluded provisional items, specifically the price for upgrading to a fully fixed water metering system, from the tender evaluation process.
4. Whether the Defendant was entitled to evaluate a tender that did not include a price for the provisional upgrade item.
5. Whether the successful tender was capable of being upgraded to a fully fixed system, as required.

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff contends that the Defendant wrongly excluded provisional items, including the upgrade price, from the evaluation, which was contrary to the tender documents.
• The Plaintiff argues that the successful tender was not compliant because it lacked a price for the provisional upgrade item yet was still evaluated and selected.
• The Plaintiff asserts that the successful tender was not capable of being upgraded to a fully fixed system, a necessary requirement for consideration.
• The Plaintiff claims that time to bring the challenge did not begin to run until it had knowledge of the grounds, which was only clear after the 19 December 2005 meeting.
• The Plaintiff maintains that it acted promptly upon acquiring knowledge and seeks an extension of time for bringing the proceedings.

Defendant's Arguments

• The Defendant contends that time began to run when the grounds for challenge first arose, irrespective of the Plaintiff’s knowledge.
• The Defendant argues that the Plaintiff was aware or ought to have been aware of the grounds well before the three-month period expired.
• The Defendant maintains that the evaluation process complied with the tender documents and EU procurement rules, including treatment of provisional items.
• The Defendant disputes that the Plaintiff has established arguable grounds regarding the upgradeability of the successful tender.
• The Defendant asserts that any delay in the Plaintiff instituting proceedings was unjustified and that the Plaintiff bears responsibility for some of the delay.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by interpreting Order 84(A) Rule 4, concluding that the three-month time limit for bringing a challenge starts when the grounds for the challenge arise, not when the applicant gains knowledge of them. This interpretation aligns with UK jurisprudence, notably the Keymed case, and is consistent with EU law provided the national procedural rules afford an effective remedy.

The court rejected the Plaintiff’s argument that time should only start running upon knowledge, finding that the discretion to extend time adequately addresses cases of delayed knowledge. The court also noted that obligations of transparency on awarding authorities affect the assessment of responsibility for any lack of knowledge.

Regarding the tender evaluation process, the court found that the exclusion of provisional items from the ranking was documented internally but not disclosed to tenderers, and the Defendant was culpable for failing to provide clear and timely information, particularly regarding the identity of the successful tender and the treatment of provisional items.

The court analysed the sequence of communications between the parties, finding that the Plaintiff was aware or suspected certain grounds early but was misled or left in uncertainty by the Defendant’s failure to provide clear answers. The Plaintiff’s delay in commencing proceedings was partly attributable to its own decisions, such as declining an earlier meeting, but the Defendant bore the greater share of responsibility for the late disclosure of critical information.

On the question of whether the Plaintiff had established arguable grounds regarding the upgradeability of the successful tender, the court found the evidence unclear and granted the Plaintiff an opportunity to clarify before making a final determination.

Ultimately, the court held that time began to run on 6 September 2005 when the Plaintiff was formally notified of the unsuccessful tender but accepted that the delay in knowledge concerning the identity of the successful tender and the provisional items justified extending time for some grounds of challenge.

Holding and Implications

The court held that the Plaintiff’s application was, prima facie, out of time as the limitation period began on 6 September 2005.

However, the court exercised its discretion to extend time in respect of the grounds challenging the evaluation of a tender that lacked a price for the provisional upgrade item. This extension was justified by the Defendant’s failure to provide transparent and timely information, particularly regarding the identity of the successful tender.

The court declined to extend time for grounds relating to the exclusion of provisional items from the ranking process, as the Plaintiff had knowledge of those grounds well before the limitation period expired and did not act expeditiously.

The court reserved final determination on the third ground concerning upgradeability pending further submissions from the parties.

The decision has the direct effect of allowing the Plaintiff to pursue certain challenges despite delay, but it does not establish a new precedent altering the interpretation of the limitation rule, reaffirming the strict time limits applicable to public procurement challenges and the importance of transparency by awarding authorities.