Mandatory really does mean mandatory

Hard on the heels of the Danish case referred to in our last blog post comes the unfortunate tale of Mr Nadarajah, a sole legal practitioner who operated under the title All About Rights Law Practice.

This case had come before the courts before in April 2011 when Mr Nadarajah had brought a claim for judicial review against the Legal Services Commission (LSC) following its rejection of his tender to provide publicly funded legal services. Mr Nadarajah was a shoo-in for the tender as his was the only firm in the relevant geographical area which specialised in mental health. Get the tender in: Get the contract or so at least Mr Nadarajah must have thought.

However on 10 June 2010 the LSC had written to him informing him that the tender had been rejected because a mandatory form had been submitted blank.

When Mr Nadarajah challenged this decision the High Court held that the LSC had acted lawfully and in the legitimate exercise of its discretion by rejecting the tender. The submission of the mandatory form was a key feature of the process and fairness to all tenderers as well as equal treatment required the insistence that the form be completed.

However some time later pursuant to a request under FOIA it became clear that some aspects of the LSC's evidence in the original judicial review had been wrong and following an appeal the matter was remitted to the High Court to consider again. In particular it focused on:

  • Whether the decision to reject the tender was proportionate; and
  • Whether there had been any inequality of treatment.

In deciding that the decision to reject the tender was reasonable and proportionate the court considered the following:

  • That completion of the form was mandatory. Indeed it was the only mandatory document in the tender submission.
  • It had been made clear in the tender documentation that no alteration could take place after the closing deadline.
  • Allowing the completed form to be submitted would be tantamount to allowing a new bid.
  • The fact that Mr Nadarajah had been ?guaranteed? to win did not render the rejection disproportionate. There was always competition which might be affected by allowing the bid.

In relation to equality of treatment the court found that the appropriate comparators were those firms who had also submitted a blank form. All of those bidders had had their bids rejected. Accordingly the court found that there had been no inequality of treatment.

It is clear from this case that the court is prepared to support a contracting authority which rejects a non-compliant bid. So how do we reconcile this decision with the decision of the ECJ in our previous blog?

There are perhaps 3 points of critical difference:

  • Firstly the Danish case was at PQQ not ITT stage.
  • Secondly in the Danish case the missing balance sheets were part of the background but were not new information. By contrast the information required in Mr Nadarajah's blank form was absolutely critical to the assessment of the bid and was information created specifically for the purpose of the bid.
  • Finally the LSC tender documents expressly stated that no alteration or amendment to bids would be allowed once the deadline had expired. The Danish documents contained no such requirement.

As we said in our last blog where the contract documents contain a mandatory requirement the bidder must be extra careful to submit a compliant bid as the contracting authority will have little or no flexibility to request clarification.

All About Rights Law Practice R (on the application of) v The Lord Chancellor [2013] EWHC 3461 (Admin) judgment of 15 November 2013

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