Easycoach: how far should you stand by your procurement process?

A timely lesson in how far it is appropriate to stand by a defective procurement process has been thrown up by the recent case in Northern Ireland of Easycoach Ltd v Department for Regional Development.

The Department for Regional Development held a procurement exercise to select providers of pre-bookable transport services for people with disabilities in four geographic areas. At the end of the process it proposed to award 3 contracts to a company called Quinns and the final one to Out and About Enterprises Limited. Easycoach's bid was rejected.

Easycoach brought an action alleging that the contract selection criteria lacked objectivity and transparency and that in fact the two successful bidders did not satisfy the selection criteria.

Easycoach certainly had grounds for complaint in relation to the selection criteria. Bidders were asked to provide details of a 'relevant project' similar 'in nature and scale to the services'. The court noted that there was no particularity in what the contracting authority was asking for and no benchmarks minimum thresholds project volumes characteristics duration or value specified. The evaluators were left to form opinions effectively based on the experience and expertise each possessed.

However the court concluded that all 3 bidders were equally hampered by this vagueness and in any event Easycoach had brought its claim out of time having known of the deficiencies at the date it received the tender documents.

Easycoach were however able to prove other deficiencies in the way the selection criteria had been applied. The court in fact described the approach taken by the evaluation panel as 'nebulous and incomprehensible' giving rise to inconsistencies and contradictions. The ad hoc nature of the process encouraged the formation and application of subjective and intuitive judgments and as such was found to be lacking in transparency.

It got worse. Quinns had made it clear in its tender submission that it intended to sub-contract the services. It was a mandatory requirement that those operating the services should have a licence to do so but the evaluation had only considered whether Quinns was licensed and not whether its sub-contractors were. This was a clear failure and yet the contract had been awarded to Quinns.

It got worse. The court found that Quinns had failed to give evidence of reasonably comparable projects that its tender was manifestly deficient in providing supporting evidence and that a clear falsity had not been identified by the evaluation panel.

It got worse. Out and About the court found had demonstrably failed to satisfy any of the four selection criteria.

What is striking about this case is that the court stayed proceedings for a month to allow the Department to carry out a due diligence exercise to verify the successful bidders? compliance with the tender requirements. At the conclusion of that exercise however the Department concluded that the winning tenders were 'complete and accurate in all material respects'.

The due diligence exercise gave rise to further arguments by Easycoach firstly that it should be governed by the same principles of equal treatment and transparency as applied to the Regulations or if not that there was an implied contract whereby the Department was obliged fairly to assess the allegations against the 2 successful bidders.

The court found that the due diligence exercise was governed by Regulation 26 of the Regulations but if that was wrong it went on to say that there was an implied contract requiring the Department to act with appropriate fairness towards Easycoach. However Easycoach had been treated unfairly triggered by the information provided the allegations made by it following the award letter and bringing the claim. The unfairness constituted inadequate enquiry and insufficient scrutiny to the detriment of Easycoach.

Accordingly the contract award decisions were set aside.

On the bare facts of this case it is surprising that the Department reached the conclusions it did and then stuck to them so resolutely. This seems to have troubled the court which commented that where a claim is brought for breach of the Regulations the public authority is not obliged to defend it. There should be a willingness to accept that there may be legitimacy to a challenge and the High Court noted that 'in cases where litigation materialises there is never any shame in acknowledging the commission of an actionable error or errors: au contraire the public authority sued will be duly commended by the court will be acting manifestly in the public interest and further will thereby ensure that the expenditure of ever shrinking public funds is minimised to a fraction of the amount which materialises when full blown litigation which in this sphere entails lengthy and expensive trials eventuates.'

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