QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL
B e f o r e :
| AMARYLLIS LIMITED
|- and -
|HM TREASURY sued as OGCBUYING SOLUTIONS
Mr Michael Bowsher QC and Mr Philip Moser (instructed by Treasury Solicitors ) for the Defendant
Hearing date: 24th April 2009
Crown Copyright ©
Mr Justice Coulson :
2. THE FACTUAL BACKGROUND
"Secondly, I am writing to confirm our concerns as to why Amaryllis was not selected to tender for Lot 1-Office Furniture and request a de-brief following the PQQ process. As the incumbent supplier to one of your major customers, the MOD, we find it difficult to appreciate how we cannot be considered appropriately qualified. Equally, we are one of the leading suppliers to arguably the largest sector of the Civil Service estate- Department Of Work and Pensions, Ministry of Defence and DVLA. In addition we are a NHS- Pasa appointed supplier.
You mentioned the fact that we do not retain FSC Certification in our name. Being an ISO 14001 accredited organisation, Amaryllis places great importance on sustainability and timber traceability. Our Environment Manager has sought expert opinion on this matter and it would seem highly debatable as to whether Amaryllis is required to hold FSC certification in its own right. As we outlined in our tender response, we do require timber traceability from our supply chain together with details of availability of components for repairs and maintenance. This is a formal policy and part of our overall Environment Management Policy.
We appreciate your comments regarding your scoring system and that we were ranked 14, however you only short listed 12 suppliers. We strongly contest this decision-we are aware that one of the short listed companies is one of our suppliers and we believe that we are its largest customer!
We would urge you to reconsider your evaluation."
"In relation to your specific questions I would like to point out the following:
- Paragraph 3. In line with the government policy to increase collaboration within public sector procurement, OGCbuying.solutions has developed a strategy which meets the requirements of a wide range of customers from Civil Central Government (CCG) and the wider Public Sector (PS), taking into account EU and PS legislation and procurement best practice. The MOD are one of a wide range of collaborative partners within the development of this framework, including the pre-qualification evaluation criteria. The result of the pre-qualification evaluation exercise should not be taken as an indication that Amaryllis Limited could not provide the required support; other suppliers received more marks within the fully compliant competitive evaluation.
- Paragraph 4. Within the scoring criteria those suppliers who had or were working towards FSC and could provide evidence did receive a score towards the overall total. The 12 short listed suppliers provided evidence at the time of submitting the PQQ, stating that they had FSC certification or PEFC certification which is considered acceptable.
- OGCbuying.solutions is guided by the central Point of Expertise and Timber Procurement (CPET)… there are two categories. Category A is where the supplier holds certification and the chain of custody is unbroken i.e. from the forest source to the end user. Category B is the chain is broken and the supplier is likely to provide check list evidence that can be downloaded from the website.
- With regard ISO 4001 in Timber Traceability Policy, Amaryllis Limited were given marks accordingly.
- Paragraph 5. It clearly states in the PQQ documentation under Background to General Instructions Item 3 that 'following the sifting of PQQ responses, the successful bidders would be required to submit detailed tenders… following receipt and evaluation of those tenders, it is anticipated that Framework Agreements will be awarded up to 22 providers'.
Whilst we fully appreciate your disappointment at not progressing to the next stage, we regret that we are unable to invite you on this occasion. We nevertheless wish to take this opportunity to thank you for taking part in this exercise."
In my judgment, this letter did not provide a clear or cogent explanation as to how and why the claimant had been unsuccessful on Lot 1. For reasons which will become apparent below, I consider that this was a significant omission on the part of the defendant.
"Amaryllis believes that the PQQ submission was not assessed fairly and no consideration was given to its established history as the incumbent supplier. Amaryllis has no confidence that any tender submissions would be given a fair and valid assessment. Amaryllis would be required to commit time, resources and expenditure when the outcome of the PQQ for Lot 1 suggests that there is no reasonable prospect of any tender being successful."
"Firstly, we hereby notify you under Regulation 47 of breaches of the Public Contracts Regulations 2006 and general Treaty principles (as well as breaches of the implied tender contract between our company and OGCbuying.solutions) and our intention to bring proceedings. Secondly, however, you request further information in relation to the non-selection of our company. We expand on these matters below.
Our company has an established history as a supplier of furniture to government bodies including the Department of Work and Pensions, DVLA and Ministry of Defence, and provided a clear and detailed response to the Pre-Qualification Questionnaire. We have not been provided with any proper explanation of the reasons for our non-selection and consider that our response to the Pre-Qualification Questionnaire was not considered fairly or equally. We also consider that the process was not transparent. In particular, we were not aware (and remain unaware) at the relative importance and weightings of the questions in the Pre-Qualification Questionnaire."
"You have provided insufficient information to enable us to identify with precision all the breaches of the Regulations and general Treaty principles. We therefore request, as a matter of urgency, the following information in relation to Lot 1:
1. The weighted scoring system originally devised for evaluating the Pre-Qualification Questionnaires and any and all amendments made to it during the course of the evaluation process.
2. The criteria and sub-criteria originally devised for evaluating the Pre-Qualification Questionnaires and any and all amendments made to them during the course of the evaluation process.
3. A breakdown of our score against (a) the questions in the Pre-Qualification Questionnaire and (b) the criteria and sub-criteria used for the evaluation of the Pre-Qualification Questionnaire.
4. The reasons why we were not selected to be invited to tender.
5. The weighting attributed to the need for FSC Category A certification in the original scoring system and any and all amendments made to this during the course of the evaluation process…
8. Our score(s) in relation to Previous Experience and Comparable Contracts…"
There was a total of 12 identified questions or categories of documentation sought by the claimant.
a) Previous Experience and Comparable Contracts
It is the claimant's case that the decision to allocate no marks at all to Section F of the PQQ which covered this topic, when the PQQ indicated that all Sections would be marked, was a clear breach of the principles of transparency and equal treatment.
b) Criteria and Weightings
The claimant complains that the defendant evaluated the PQQ responses without informing the tenderers of the relative importance it described to each question/topic, and maintains that this was also a breach of the principles of equal treatment and transparency. On the face of it, this seems to me to be perhaps the strongest of the claimant's criticisms: it is a bit like being required to do an exam without knowing what marks are available for any given question.
c) Environmental Management
The claimant makes a number of criticisms under this heading, including the allegation that the defendant failed to keep the claimant informed of the importance and weighting to be given to this issue and that, moreover, the marks awarded to the claimant were manifestly wrong.
d) Business Activities
As noted above, the claimant complains that it was awarded zero for section A on the sole basis that it had bought in the furniture, rather than manufactured the furniture itself. The claimant complains that there was a complete lack of transparency in relation to the importance of this issue. Again it is suggested that the marks awarded to the claims under this head were manifestly wrong.
3. THE PUBLIC CONTRACTS REGULATIONS 2006
"…an agreement or other arrangement between one or more contracting authorities or one or more economic operators which establishes the terms (in particular the terms as to price and, where appropriate, quantity) under which the economic operator will enter into one or more contracts with a contracting authority in the period during which the framework applies."
In other words, the framework agreement was dealing with the first stage of the process. The successful bidders on, say, Lot 1 under the first stage of the agreement would then be invited to tender for specific supply contracts as and when they arose.
"(1) Subject to paragraph (13), a contracting authority shall as soon as possible after the decision has been made, inform any economic operator which submitted an offer, applied to be included amongst the economic operators to be selected to tender for or to negotiate contract, or applied to be a party to a framework agreement, of its decision in relation to-
a) the award of the contract; or
b) the conclusion of the framework agreement;
and shall do so by notice in writing by the most rapid means of communication practicable.
(2) The notice referred to in paragraph (1) shall include-
a) the criteria for the award of the contract;
b) where practicable, the score obtained by-
i) the economic operator which is to receive the notice; and
ii) the economic operator –
aa) to be awarded the contract; or
bb) to become a party to the framework agreement; and
c) the name of the economic operator-
i) to be awarded the contract; or
ii) to become a party to the framework agreements.
(3) A contracting authority should allow a period of at least 10 days to elapse between the days of dispatch of the notice referred to in paragraph (1) and the date on which that contracting authority proposes to enter into the contract or to conclude the framework agreement.
(9) Except for a request made in accordance with paragraph (4), which shall be dealt with in accordance with paragraphs (4) and (5) and subject to paragraph (13), a contracting authority shall within 15 days of the date in which it receives a request in writing from any economic operator which was unsuccessful…
a) inform that economic operator of the reasons why it was unsuccessful…
(10) The reasons referred to in paragraph (9)(a) shall include any reasons why the contracting authority's decision that the economic operator did not meet the technical specifications-
a) as specified in regulation 9 (6) by an equivalent means; or
b) in terms of the performance or functional requirements in regulation 9 (7) by an equivalent means…."
"(7) Proceedings under this regulation must not be brought unless-
a) the economic operator bringing the proceedings has informed the contracting authority or concessionaire, as the case may be, of the breach or apprehended breach of the duty owed to it in accordance with paragraph (1) or (2) by that contracting authority or concessionaire and its intention to bring proceedings under this regulation in respect of it; and
b) those proceedings are brought promptly and in any event within 3 months from the date when grounds for the bringing of the proceedings first arose unless the Court considers that there is good reason for extending the period within which the proceedings may be brought."
I now turn to deal with the issues between the parties arising out of the Regulations, particularly Regulation 47(7).
4. WAS THE CLAIMANT'S LETTER OF 4TH JUNE 2008 A NOTICE UNDER REGULATION 47(7)a) ?
4.1. The Authorities
"If that is so, then it reinforces the natural meaning which one would attach to the language of the paragraph, because a breach can only be remedied if it is first identified with some specificity. The fact that in the present case no precise remedy of the breaches could have been achieved cannot affect the interpretation of this provision. I conclude that it is a requirement of the 1991 Regulations that before proceedings may be brought under Regulation 31, the contractor must have informed the authority of the breach of duty which is alleged and not merely of a breach of duty."
"…Had that contract been advertised on the basis of the documents now disclosed our clients would have had the opportunity to tender. They have the expertise to fulfil the technical requirements and if that would have been means by which they could supply the medical equipment they would have been prepared to undertake responsibility for the other aspects which could have been met by them as easily as any other contractor."
Langley J concluded that this letter was sufficient to comply with the Regulation, because it brought to the Trust's attention the allegation that it had wholly failed to comply with the Regulation relating to advertisement of contracts; it enabled the Trust to investigate the allegation; and it notified the Trust of the intention to bring proceedings. He concluded that the letter adequately fulfilled the purpose and letter of the notice provision in the relevant Regulation.
4.2. The Letter of 4th June
5. WHEN DID THE GROUNDS FOR BRINGING PROCEEDINGS FIRST ARISE?
5.1. The Authorities
"91. Translating these references from the planning context to the present context, in a case in which there is a claim that there has been an actual breach of the Regulations, the grounds for the bringing of proceedings arise when the first breach takes place. Jobsin is authority that those grounds arise even if at that date the claimant has not suffered loss, but only risks suffering loss. The context of Burkett differs from the present. In particular, the liability of a contracting authority for damages under the Regulations is a reason to require the claimant to bring proceedings as soon as the breach is apprehended, and in this connection I refer to paragraph 33 and 38 of Dyson LJ's judgment in Jobsin. However, given the identity of wording between regulation 47 (7) and the former RSC order 53 r. 4 (1) and the present CPR Part 54.5, that difference does not justify departure from the principles laid down in Burkett. If Parliament or the draftsman of the Regulations had intended a different result from that applicable in judicial review proceedings, a different form of words would have been used. In my judgment, therefore, for the purposes of Regulations in the present case 'grounds of the bringing of the proceedings' first arose when the breach that first formed the subject of the claim occurred. It would have been different if the claim were for an injunction to restrain a breach of the Regulation; but it is not.
92. It is therefore necessary to determine when the breach of the Regulations first occurred. It seems to me it was when Brent abandoned the tender process and awarded the contracts to LAML. That occurred in March 2007. Until then, it could have lawfully awarded the insurance contracts to a company participating in the tender process. It is not in contended on that basis RMP failed to satisfy the requirements of regulation 47(7)."
"In the circumstances of this case it does not seem to me that the relevant unlawful act took place until the impugned procedure was implemented by the Department and its consultants with the result that Henry Brothers were excluded. It was open to the Department to amend or otherwise modify the criteria and the manner in which they were to be applied at any stage prior to the impugned decision, a right that was specifically reserved at paragraph 8 of the Memorandum of Information and Instructions to Tenderers."
5.2. The Present Proceedings
6. WERE THE PROCEEDINGS BROUGHT PROMPTLY AND IN ANY EVENT WITHIN THREE MONTHS?
6.1. The Authorities
"That is no doubt for the good policy reason that it is in the public interest that challenges to the tender process of a public service contract should be made promptly so as to cause as little disruption and delay as possible. It is not merely because the interests of all those who participated in the tender process have to be taken into account. It is also because there is a wider public interest in ensuring that tenders which public authorities have invited for a public project should be processed as quickly as possible. A balance has to be struck between two competing interests: the need to allow challenges to be made to an unlawful tender process, and the need to ensure that any such challenges are made expeditiously. Regulation 32(4)(b) [the previous version of Regulation 47(7)(b)] is the result of that balancing exercise. It may often be the case that a service provider is not aware of the intricacies of regulations such as the 1993 Regulations and has little or no understanding of how they should be interpreted. If ignorance of such matters were routinely to be regarded as a good reason for extending the time for starting proceedings, the clear intent of Regulation 32(4)(b), that proceedings should normally be started promptly and in any event not later than three months after the right of action first arose, would be frustrated."
6.2. The Present Proceedings
a) Within Three Months?
b) ' Promptly?'
"It seems to me that a tenderer who finds himself in such a situation faces a stark choice. He must either make his challenge or accept the validity of the process and take his chance on being successful, knowing that the other tenderers are in the same boat. In my view, it is unreasonable that he should sit on his rights and wait to see the results of the bidding process on the basis that, if he was successful he would remain quiet, but otherwise he will start proceedings."
7. DOES THE CLAIMANT HAVE A REASONABLE PROSPECT OF ESTABLISHING A GOOD REASON FOR ANY NECESSARY EXTENSION OF TIME?