Public procurement: award stage

By stating “may result in exclusion”, this could leave open the possibility for excluded bidders to argue that it was not clear in what circumstances the Authority would exercise its discretion to exclude. In order to avoid this scenario, authorities may wish to expressly state that certain circumstances “will lead to exclusion”. 

There is no legal requirement to justify the inclusion of minimum scoring or quality thresholds.

You may wish to consider apportioning lower weightings to criteria which are likely to give rise to significant incumbency advantage (e.g. mobilisation costs or similar). It is important to note that while authorities should take steps to achieve a level playing field for all bidders participating in the procurement, this should not have the effect of putting the incumbent in a position where it is at a significant disadvantage in comparison to the other bidders. Examples of this may be where an authority enhances the incumbent’s mobilisation costs for the purpose of evaluation, beyond the figure proposed by the incumbent (which may be zero). This, in and of itself, could lead to allegations of unequal treatment from the incumbent.

It is important to remember that there is a distinction between a ‘fair’ and ‘unfair’ advantage. An incumbent will have a natural advantage by virtue of operating the previous contract (note that "the principle that tenderers should be treated equally does not place any obligation upon the contracting authority to neutralise absolutely all the advantages enjoyed by a tenderer" (Evropaiki Dynamiki v Commission - Case T-345/03)). Evaluating the costs of mobilisation would appear to us to be permissible, after all, this is an important pricing/affordability consideration. However, this may lead to a lack of interest in the contract from other organisations, if it is clear that they would be unable to propose a competitive © Mills & Reeve LLP (2022) 2 offer. Authorities may also wish to consider whether to adopt a life-cycle costing approach, which may reveal that in the long-term, an alternative bidder with higher mobilisation costs may ultimately be less expensive if it will deliver savings across the term of the contract in other areas. You may also wish to note the response to Question 3 above, which is perhaps also relevant to this topic.

We assume your question concerns the drafting of standstill letters, which require authorities to provide the scores, and reasons for the award decision. In this scenario, we would always advise that any feedback provided is clear in respect of which criteria (or sub-criteria) it relates to. Frustrated bidders always have the option of requesting further disclosure (either as part of pre-action correspondence or issuing a formal application for disclosure via the Courts), if they do not believe that they understand the reasons for the scores provided.

“RWIND” is an acronym which has been used in case law and stands for the “reasonably well informed and normally diligent” tenderer. Kim Fraser goes into more detail about this concept in the webinar.

The scoring methodology (or scoring tables) used to evaluate responses should be clear to evaluators so as to enable evaluators to determine what a ‘good’ or ‘poor’ response may look like. As discussed during the webinar, model answers can constitute undisclosed evaluation criteria, if they contain information which may have impacted on how a bidder approached its response. Our advice is therefore to avoid the use of model answers, for this very reason. 

PPN 06/20 requires Social Value to constitute 10% of the overall score (i.e. 10% of the total 100%). 

Our view is that this could be problematic as a restricted process is envisaged to constitute a purely written exercise and is a two-stage process only (i.e. SQ + ITT). Further, it can be difficult to evidence that this exercise is connected to the subject-matter of the contract, albeit this may be justified if the contract requires presentational skills.

The ITT would need to explain that a ‘Fail’ = exclusion in order to exclude a bidder where it had received a score of ‘0’ for this criterion.

As explained during the webinar, the award phase must be framed around ‘forward-looking’ questions. Therefore, asking questions about previous experience during this phase would not be permissible. However, we recognise that an authority can garner further confidence about a bidder’s proposal for the contract in question, if the bidder refers to examples where they have successfully implemented similar concepts in a previous contract. If the question is framed along the lines of “Bidders may use previous examples and experience to provide substance to their answer”, this is perhaps less likely to be considered unlawful as bidders have the option to refer to previous examples if they wish, or may provide other forms of evidence/assurance that they will be able to commit to the proposals outlined in their tender. 

We would direct you to the consultancy and outsourcing playbooks, which do provide some further guidance on this topic

Please refer to our response to the question above. 

This is often approached by asking bidders to propose hourly/daily rates, prices for materials or proposing pricing for a scenario representing a typical call-off contract which might be placed under the framework agreement. Authorities may then conduct mini-competitions amongst the framework suppliers (which may require suppliers to base their pricing on their framework hourly/daily rates or a lower rate) to ensure that pricing remains competitive. 

This is the typical approach adopted by authorities when evaluating price. Taking the example of a procurement where 30% of the total marks available is allocated to price, the lowest priced bidder would be allocated the 30% score. All other bidders are then scored on a pro-rata/relative basis to this. Kim walks through an example within the webinar, which might be helpful. 

This depends on the drafting of the ITT. If the ITT is very clear that prices above a certain affordability ceiling will result in the automatic exclusion of the bidder concerned, then we cannot identify any legitimate grounds to challenge this. Indeed, if the authority did not exclude such a bidder in these circumstances, the authority could receive challenges from other bidders, whose pricing did fall within the affordability ceiling. However, if the ITT is not clear on this point, a rejected bidder would appear to have grounds to challenge its exclusion in this scenario.

In our view, the estimated value of the contract is not necessarily the same as an affordability envelope/stated budget. Ultimately, if an authority wishes to discount bids which are above its affordability ceiling/budget, this would need to be very clear within the ITT (please see response to the previous question above)

We would refer you to our response to questions 16 and 17, which appears to be connected to your question. If the authority has stipulated a very clear affordability envelope, stating that bidders will be excluded where they propose pricing above this figure, the authority would ultimately need to apply the rules it has drafted within its ITT. Otherwise, this could lead to claims from other bidders alleging that the authority is not following its published process (and therefore there is a lack of transparency and equal treatment). If an authority is proposing this approach, it will however need to be confident that the supplier market is able to deliver the requirements within the specified affordability envelope. You may therefore wish to conduct pre-market engagement before commencing the process, to verify this and avoid a failed procurement scenario.

There is no legal requirement to reference an affordability envelope, however authorities must estimate the anticipated value of the contract and this must be stated within the contract notice. Our view is that it would not be sufficient to state that bids exceeding the stated envelop will not be ‘considered’. It will need to be clear that this will result in ‘exclusion’, if the intention is to disregard any proposals which exceed the affordability envelope. Please see responses to questions 16-18 above which may also be helpful here.

Ultimately, this will depend on what the ITT states about clarifications and whether asking the clarification could lead to allegations of unequal treatment. There is, however, some case law in this area which provides some guidance.

In Manova (Case C-336/12), the European Court of Justice stated that “the principle of equal treatment must be interpreted as not precluding a contracting authority from asking a candidate, after the deadline for applying to take part in a tendering procedure, to provide documents describing that candidate’s situation – such as a copy of its published balance sheet – which can be objectively shown to pre-date that deadline, so long as it was not expressly laid down in the contract documents that, unless such documents were provided, the application would be rejected. That request must not unduly favour or disadvantage the candidate or candidates to which it is addressed”.

In this case, the bidder concerned had omitted to attach a balance sheet to its tender. In another case, Tideland (Case T-211/02), the ITT required tenders to include a statement that they would remain valid for 90 days from the tender deadline. Although Tideland included this statement in its tender, it had forgotten that the tender deadline had changed, with the effect that its tender was ambiguous as to its period of validity. The Commission excluded Tideland on that basis. However the Court held that “where a tender contains an ambiguity that "probably has a simple explanation and is easily resolved", the contracting authority should seek clarification of the ambiguity. Here, the reason for the error should have been obvious to the Commission and in the circumstances it would be disproportionate not to allow Tideland to correct its tender”. 

This may be an indicator that the bid could be abnormally low, but if the authority is including the abnormally low bid in the calculation, and the price is significantly lower than other bids, this will likely prove unhelpful as this will decrease the average price. There is no legal definition of an abnormally low bid, however an indicator may be the disparity between the average price of the other bids (assuming those prices are roughly similar) and the abnormally low bid.

Please see our responses to questions 16-18 above.

We are unable to comment as to why specific rules have not been included within the PCR 2015 or case law. However, a bid which an authority may initially identify as being ‘abnormally low’, may be justifiable after this has been clarified with the bidder concerned. Indeed, Regulation 69 of the PCR 2015 requires contracting authorities to ask bidders to explain their pricing in these circumstances, and consider the explanation provided, before an authority can exclude a bidder on the basis of submitting an abnormally low bid. 

Yes this is possible, on the basis that each ‘layer’ is evaluated separately. 

This is of course possible, but may not achieve the objective of ensuring that the team proposed is suitable to deliver the contract in question given that individual experience and qualifications will likely differ between team members. It is more common to evaluate individual’s CVs, and include a contractual obligation that the supplier must put in place an individual with comparable experience, if that person leaves the employment of the supplier. 

The answer would really depend on how the question was drafted and the particular context so it is difficult to say that is approach is universally correct or incorrect.

The question asked would need to fit within the rules relating to award criteria which were highlighted in the webinar. First, the general principles at Regulation 18 (non-discrimination and equal treatment) are in play here, so it would be important not to actively restrict suppliers from being able to take part if they were not based in the Authority’s region; this could create an equal treatment or discrimination challenge.

Second, the award criteria would need to be sufficiently clear as to what was required and how it would be evaluated such that the RWIND tenderer (as Kim mentioned in the webinar) can understand the criterion and how its response will be assessed. It seems to us that a general drafted social value question around “improving economic, social or environmental wellbeing in the area” would need to be accompanied by a very clear assessment methodology if it is going to meet the RWIND tenderer test. 

When we remained part of the EU, another angle to consider on this question would have been that we were subject to EU General Principles (namely equal treatment, transparency, non-discrimination, nonarbitrariness, proportionality, good administration, procedural fairness, and the protection of legitimate expectations). Requiring a supplier to do something for the benefit of a particular area used to be seen to be potentially difficult from a EU perspective, in the sense that it could be seen as antithetical to the promotion of “cross border interest”.

However, now we have left the EU, the General Principles have only interpretative force (as confirmed in the recent case of Adferiad Recovery Limited v Aneurin Bevan University Health Board [2021] EWHC 3049 (TCC).

However, given that the key principles of non-discrimination and equal treatment are still in play thanks to the fact that they appear in our domestic legislation (i.e. Regulation 18 PCR 2015), authorities continue to need to be careful not to set criteria that discriminate against suppliers from outside the authority’s area. 

Please see our response to question 14 above.

This depends on the procurement in question. If an authority has undertaken a complex procurement process which involves a significant amount of evaluation criteria, it would likely be challenging to draft a short-form standstill letter which provides enough detail for the recipient to properly understand its scores and the reasons for its scores. In these scenarios, bidders often request more detailed feedback (particularly in light of the expense and resource which may have been allocated to participating in the process) and a failure to provide this could lead to challenge. The Crown Commercial Service has published further guidance on drafting standstill letters, a copy of which can be found here if helpful.

Yes, in principle, it is lawful to include minimum scoring thresholds, however this will need to be made clear to bidders including the consequences for failing to reach the minimum threshold (eg, explaining whether this will lead to exclusion).