Here in the Mills & Reeve procurement team, we frequently advise authorities and tenderers on the procedure for bringing, or defending, a procurement challenge under the Public Contracts Regulations 2015 ("PCR 2015").
The recent judgment in the case of Bromcom Computers Plc v United Learning Trust [2022] EWHC 3262 (TCC) will be interesting to both - and serves as a worthy reminder to contracting authorities to adopt lawful evaluation and moderation processes when selecting the winning bid.
The claimant, Bromcom Computers Plc (“Bromcom”) brought a claim against United Learning Trust (“ULT”), an education charity, to whom they sought to provide specialist software for use in schools.
Bromcom was one of two bidders invited to submit final tenders in a competitive dialogue procedure for the award of a contract to supply a Cloud Management Information System (“Software”). The other bidder was Arbor Education Partners Limited ("Arbor") who was already a supplier of the Software to 15 of ULT's other academies. The 5-year contract was valued at £2 million and was to provide Software to 57 state Academy schools.
Arbor uploaded its tender using a dropbox mechanism. Following the evaluation, Arbor emerged as the winning bidder, albeit by a very small margin. As ever, where there is a very small margin separating the winning and second bidder – the stage was set for Bromcom to bring a procurement challenge.
The overarching duty of a contracting authority to tenderers is set out at Regulation 18 PCR 2015 – it is a requirement to conduct the procurement in a transparent, and non-discriminatory manner which ensures fair and equal treatment of tenderers.
Bromcom commenced proceedings on 18th May 2020 alleging several breaches of these principles, as follows.
Dropbox mechanism
The Court agreed with Bromcom that the use of the “dropbox” mechanism did not comply with the requirement at Regulation 22 PCR 2015 that any electronic means of submitting tenders must allow the precise date and time of the submission to be determined. The dropbox facility also permitted the winning bidder to be able to alter its bid even after the bid deadline, a clear breach of the general principles of transparency and equal treatment.
Evaluation
The evaluation methodology stated that scores of 0 to 5 would be awarded. The Court agreed that the approach of taking an average of scores – such that a final score of say “4.2” was awarded – was a clear departure from the ITT and as such was a transparency breach. The court noted that this “averaging” approach was not a substitute for a proper moderation process.
Discount on existing contracts
Arbor was able to increase its score by offering discounts on its existing contracts with ULT, as the incumbent provider. While the court will always recognize that an incumbent supplier does enjoy a natural and fair advantage, the contracting authority must not allow this to become an unfair advantage. The court held that allowing Arbor to “leverage” its bid by offering discounts on other contracts in this way was a breach of the equal treatment principle.
Manifest errors
Bromcom scrutinized the evaluation records and alleged several instances of “manifest error”. See our webinar on evaluation for a fuller discussion of this – but essentially this occurs where the evaluators have simply made a mistake that the court can easily step in and correct. The court found that no less than ten manifest errors had been made, and once corrected, it appeared that on correct scoring, Bromcom should have been the winning bidder.
This case emphasizes the following lessons for authorities to keep in mind:
- Be careful when assessing tenders from the incumbent supplier – and ensure that any advantage enjoyed by the incumbent does not extend beyond its natural, fair advantage;
- Ensure that the evaluation and moderation process is robustly documented and provides a full narrative of how scores were arrived at - these issues could be scrutinized by the court;
- Scores awarded must match the scores set out as awardable in the ITT, otherwise this will be a transparency breach;
- The moderation process must do more than simply average out the evaluators' scores – it should arrive at a final score decision and demonstrate the road the moderation meeting took in order to get there; and
- Ensure that the process for submitting a tender is through means which allow the specific date and time to be recorded and does not allow the tenderer to amend its tender after the bid deadline.
Again, the case shows the court’s willingness to step in and correct manifest errors. Where the scores are very close, as they were in this case, there will be every incentive for the second-placed bidder to interrogate the evaluation for any clear errors affecting the score.
With many thanks to Sara Hafejee (trainee solicitor) for her assistance in writing this article.