Public Procurement: Round-up of three recent judgments
October 2021Introduction and summary
The previous three weeks have seen the release of three interesting judgments in relation to public procurement. Two are from the UK and the third is from the General Court of the European Union. There is quite a lot to get through here so we hope readers will forgive the length of this update!
The first of the judgments addresses the Civil Procedure Rule (“CPR”) requirements for adducing expert evidence, particularly in the context of public procurement and State aid / subsidy control cases. The second deals with the CPR requirements for correct issue and service in procurement challenges. The third judgment looks at a recent rejection of a procurement challenge in circumstances where a bidder was disqualified for neglecting the format requirements for the tender response.
If our trilogy of cases has a common theme it is about the need for attention to detail where the rules are concerned. This applies both to the submission of tenders and to legal challenges to procurement decisions. With regard to the first judgment, the defendant lost the opportunity to submit expert evidence for failing to adhere to the requirements of CPR 35. In the second, while the claimant ultimately survived a number of procedural criticisms, the road was a rocky one. The final case is a reminder that overlooking tender rules or award criteria can have catastrophic results.
Case Number 1:
Good Law Project Ltd, R (On the Application Of) v Secretary of State for Health and Social Care [2021] EWHC 2595 (TCC) (30 September 2021)
This judgment arose from a challenge to a procurement for the manufacture and supply of rapid Covid-19 antibody tests carried out by the Secretary of State for Health and Social Care (“SoS”). The Claimant was a public interest body known for challenging the behaviour of the Government and the Cabinet Office during the pandemic response. It sought a judicial review of the decision to award the contracts to the interested party, Abingdon Health Plc (“Abingdon”), on the basis that it was contrary to the Public Contract Regulations 2015 (“PCRs”). The proceedings were brought as judicial review proceedings since the Claimant did not have sufficient standing to bring a claim under the PCRs.
The judgment did not address the merits of the substance of the claim but focussed on the right of the SoS to adduce expert evidence to respond to claims that the sums granted to Abingdon comprised unlawful State aid. The application was opposed by the Claimant.
Issues
It is an accepted rule under CPR 35.4(1) that permission of the Court is required if a party wishes to rely on expert evidence and that the Court has a duty to restrict that to evidence that is considered “reasonably necessary”. There are a number of reasons why the Court may consider that expert evidence is “reasonably necessary” and one of these is where the court proceedings require an understanding of technical matters.[1]
In this case, the Judge was required to consider three key questions:
- Was the issue of State aid sufficiently technically complex?
- Was the expert evidence inadmissible as a matter of law?
- Had the court rules been complied with?
Judgment
The judge accepted that consideration of the economics of State aid was sufficiently technical in order to be considered “reasonably necessary” under CPR 35.
As to the second question, the Claimant sought to argue that the expert’s report was ‘ex post facto’ analysis, which is inadmissible as a matter of the law related to EU State aid.[2] The Claimant argued that any decision regarding state intervention should be examined on an ‘ex ante’ basis (i.e. having regard to the information available at the time of the decision) and it was not acceptable to rely on a retrospective finding that the investment was actually profitable. The Judge did not consider it appropriate to rule on whether the SoS had failed to overcome the second obstacle, noting that more detailed submissions from both parties would have been required to rule on such a complex point of law.
Ultimately, the first two questions were of little importance as the Judge held that the expert report failed to comply with the CPRs and the principles that underpin the use of expert evidence in court proceedings. Specifically, the report failed to satisfy the “identification of material” principle. That dictates that an expert’s report must (1) give details of the expert’s qualifications (2) give details of any material relied upon and (3) contain a statement setting out the substance of all material facts and instructions.[3] The expert report in this case failed to comply with these requirements, making extensive references to ”discussions” with unnamed personnel, without even a summary of those discussions being provided.
Despite these deficiencies being brought to the attention of the SoS, the second expert report circumvented and avoided the issue and simply deleted reference to those discussions having taken place at all. The Judge found that it would have been disproportionate to allow the SoS a “third bite of the cherry”, especially in light of the approaching substantive hearing, and therefore the application was denied.
Comment
It is vital that expert reports comply with all of the requirements set out in CPR 35 and particularly the requirements relating to identification of material. Where material has been relied upon, a copy of this material should be made available to all of the other experts and the Court and, if this is not possible, then a detailed summary of the material should be provided.
It is clear from this judgment that there is no excuse for litigants to fail to comply with the rules generally, nor for failures by experts to comply with the requirements of CPR 35 specifically, and that there is no special dispensation from compliance for public law cases.
Case Number 2:
Time is of the essence: Citysprint UK Ltd v Barts Health NHS Trust [2021] EWHC 2618 (TCC) (Hearing 27 September 2021)
This judgment arose from a challenge to the procurement for the provision of pathology transport and logistics services carried out by Barts Health NHS Trust. The Claimant, the incumbent provider of these services, wished to bring a procurement challenge under the PCRs following the decision to award the new contract to the East South East London Pathology Network. The judgment focussed on whether service of the claim form and Particulars of Claim were performed in accordance with the PCRs and CPRs (the “Rules”) and therefore, whether the proceedings should be allowed to continue.
Background
On 15 July 2021, a Standstill Agreement was entered into between the parties which stated that any claim form had to be issued on or before 27 July 2021.
The Claimant’s solicitors filed the claim form on 27 July 2021, and paid the court fee requested of £10,000. An unsealed copy of the claim form was sent to the Defendant’s solicitors by email that day. On 28 July 2021, the Claimant’s solicitors were notified that they had underpaid the court fee by £528 since the claim form sought both monetary and non-monetary relief. The additional payment was made by cheque that day.
The date of the sealed claim form was 27 July 2021, the “Approved Date” on CE-file was 29 July 2021 and the date of receipt of the additional funds was 30 July 2021.
When calculating the 7 days within which service of the claim form and Particulars of Claim must take place under the PCRs, the Claimant’s solicitors erroneously used the Approved Date (i.e. 29 July 2021) rather than the date of the sealed claim form (i.e. 27 July 2021) meaning that the documents were served on 5 August 2021 rather than 3 August 2021. They were also served by email without asking the necessary questions under Practice Direction 6A (specifically paragraph 4) or receiving authorisation from the Defendant’s solicitors that they were willing to accept service by email.
Judgment
The Court considered that there were three central groups of issues in this case: timings and dates, method of service and relief.
Timings and dates
The issue here was that either the claim form was issued in time for limitation purposes, namely on 27 July 2021, in which case the service of the sealed claim form was accomplished after 9 days rather than within the 7 days required; or the claim form should be taken as being issued on 29 July 2021 (the Approved Date on CE-file), which would mean that service (if otherwise valid) would be within 7 days, but would put the claim form out of time as the period under the Standstill Agreement expired on 27 July 2021.
After considering the issues, the Judge held that the date of issue of the claim form had to be the date provided on the electronic seal, i.e. 27 July 2021. This was supported by CPR 7.2(2) which states that a claim form is issued on the date entered on the form by the Court. This meant that, although the Claimant had issued within the limitation period, they were in breach of the 7 day period for service under Regulation 94(1) of the PCRs. The Judge did not consider that the Claimant could rely upon the fact that the unsealed version of the claim form had been sent to the Defendant’s solicitors on 27 July 2021 as it is not possible to have a different method or type or date of service of a claim form under the PCRs than it is under the CPRs.[4]
Method of service
In both of the scenarios above concerning timing, the Claimant still faced the issue that they had served the documents by email, without having complied with the requirements of PD 6A, and in particular without the Defendant’s solicitors indicating that they would accept email service of proceedings. The Judge found that the Practice Direction was clear and here, it had clearly not been complied with.
Relief
The question here for the Court to decide was whether the Claimant was entitled either to an extension of time, or an order permitting alternative service.
Ultimately, the Court decided to exercise its powers under CPR 3.10, which allows it to rectify matters where there has been an error of procedure. The Judge commented that given the strict time limits in procurement cases, it would have been surprising if an error of this type (namely using email rather than post) would be something that the Court would not be minded to correct.
The Court also did not consider that the overall prejudice to the Defendant had been substantial, especially considering that the actual claim form – albeit unsealed – had been sent within time. The Judge did not accept that the imposition of the automatic suspension constituted prejudice as a result of the errors since this is imposed by the PCRs not upon issue of the claim form, but upon notification to a public body of the existence of a claim.
The Judge therefore made an order that service of the unsealed claim form on 27 July 2021 counted as though it was service of sealed version of the exact same document.
Comment
This case acts as an important reminder to those engaging in litigation that they must have regard to time limits and be familiar with the requirements set out in the Rules. This judgment should not be interpreted as the court being indulgent towards widespread failures to comply with such time limits, nor failures to comply with the Practice Direction on electronic service. It is simply because of the particular facts of this case that these orders were made.
Case Number 3:
Lost in translation: Global Translation Solutions v Commission (Public service contracts – Tendering procedure – Judgment) [2021] EUECJ T-404/20 (06 October 2021)
Background
This was a judgment of the EU General Court, released on 6 October. It related to a challenge brought by an unsuccessful tenderer against the decision to exclude the tenderer from a contest for the award of a contract for translation services and to award this instead to a competitor.
Tenderers had been required to submit a test translation. The tender documents had specified, as an eliminatory “award sub-criterion” that the test answer must be submitted in DOCX format. The tender also stated that the tenderers’ ability to follow instructions while processing an assignment would be one of the things under assessment.
The claimant submitted its response to the test in DOC format, rather than DOCX and was consequently disqualified. It challenged the decision on a number of grounds.
Duty of transparency
First up was an argument that the tender documents had not set out the DOCX requirement sufficiently clearly. In order to respect the requirements of treating tenderers equally, the requirements of the tender process must be set out clearly and in unambiguous terms[5]. The Court failed to see any breach of that obligation. It held the description of the formal sub-criterion and its eliminatory nature had been displayed in terms which were sufficiently apparent and unequivocal. It was also noted that while the claimant could have sought clarifications prior to bid submission, it had not done so.
Was the DOC format a functional “equivalent”?
Pursuant to the laws of EU public procurement[6], a contracting authority must not reject a submission which, while not complying with the technical specifications for a contract, is functionally equivalent. The claimant argued in its second submission that the Parliament had a legal duty to accept its DOC-format submission as such an equivalent.
The Court accepted the existence of such a duty but not that it was applicable in the way contended. The requirement to submit the response in DOCX format was not a technical specification, but an award criterion. That rule related to the expectations of the tender response rather than of contract delivery. Here the use of this award criterion was legitimate and within the Parliament’s discretion. It was designed to test the ability of tenderers to follow instructions. In any event, the Court accepted that the DOC and DOCX formats were not functional equivalents, noting that DOCX is readable by a wider range of applications.
No violation of good administration or proportionality
Third, the claimant argued that the Parliament had violated the requirements of good administration and proportionality, insofar as it could have asked the claimant to correct its oversight and re-submit the response in the correct format[7]. That too was rejected. A legal duty to seek a correction may arise where a tenderer merely makes a clerical error.
The transgression here, however, went further than that. The tender documents had clearly stated that tenders would be rejected if they were submitted in the wrong format. In the Court’s view, there would be a violation of the equal treatment principle if, instead of following their own stated rules, the evaluators were to overlook this error and allow the tenderer to correct it. The Parliament had limited its own discretion by laying down in advance that non-compliant formats would not be considered. It had no ability in any event to depart from that. This argument therefore failed.
Termination of the process
Fourthly, the claimant argued that the tender required a minimum of two bidders be appointed for each lot. In this case only one bidder had been appointed and therefore the process should be annulled. The Court disagreed with this argument too. On a proper construction, the tender documents permitted the Parliament to cancel the tender process in this eventuality, but did not require it to do so.
Comment
The judgment is a useful reminder to bidders of the need to read tender requirements carefully. Evaluators will not always allow errors to be corrected and in some cases will be prohibited from doing so. It also provides useful commentary on the difference between contract specifications and award criteria. The former are intended to lay out the functional requirements for the performance of the contract. Award criteria, on the other hand, are the factors to be taken into consideration when scoring the bids received.
Whilst this judgment dealt with a procurement governed by the EU Finance Regulation, it is likely that the same case would have been resolved similarly by the English Courts, applying domestic public procurement law as set out principally in the Public Contracts Regulations 2015. This is currently under review in the UK and we will report on developments as they unfold.
[1] R (Lynch) v General Dental Council [2003] EWHC 2987 (Admin)
[2] Commission v EDF ECLI:EU:C:2012:318 and Land Burgenland v Commission ECLI:EU:C:2013:682.
[3] Paragraph 3.2(3) of Practice Direction 35
[4] Regulation 94(5) of the PCRs states the following “(5) In this regulation, “serve” means serve in accordance with rules of court, and for the purposes of this regulation a claim form is deemed to be served on the day on which it is deemed by rules of court to be served.” For a claim form to be served under PCR 2015 therefore, it must be served in accordance with the CPR.
[5] Article 160(1) of Regulation 2018/1046, Case C-496/99 Commission v. CAS Succhi di Frutta.
[6] Article 166(2) of Regulation 2018/1046 and Point 17 of Annex I to Regulation 2018/1046.
[7] The claimant relied on Case T-211/02. Tideland Signal Ltd v. Commission of the European Communities
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