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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Clyde Solway Consortium v Scottish Ministers & Ors For Judicial Review [2001] ScotCS 15 (22 January 2001)
URL: http://www.bailii.org/scot/cases/ScotCS/2001/15.html
Cite as: 2002 SCLR 279, [2001] ScotCS 15
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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
|
Lord Cameron of Lochbroom Lady Cosgrove Lord Kingarth |
P14/01 OPINION OF THE COURT delivered by LORD CAMERON OF LOCHBROOM in RECLAIMING MOTION FOR PETITIONERS in the cause CLYDE SOLWAY CONSORTIUM Petitioners and Reclaimers; against THE SCOTTISH MINISTERS and OTHERS Respondents: for JUDICIAL REVIEW _______ |
Act: Glennie, Q.C., Arthurson; Simpson & Marwick
Alt: C.M. Campbell, Q.C., Shand; Solicitor's Office for Scottish Ministers:
Cullen, Q.C.; Macroberts
22 January 2001
[1] This appeal concerns a proposed contract which the first respondents have put out to tender and for which a number of contractors, including the petitioners and the third respondents, have submitted tenders.
[2] There is no dispute that the proposed contract constitutes a public works contract for the purposes of The Public Works Contracts Regulations 1991 ("the 1991 Regulations") or of the Council Directive of 14 June 1993 (93/37/EEC) ("the Council Directive"). Furthermore, by virtue of The Scotland Act 1998 (Consequential Modifications)(No. 1) Order 1999, the first respondents, as the Scottish Ministers, are Ministers of the Crown for the purposes of the 1991 Regulations. They are the contracting authority for the purposes of both the Council Directive and the 1991 Regulations.
[3] In conformity with the Council Directive and the 1991 Regulations, a notice was published in the Official Journal of the European Communities. This advised that the first respondents wished to let contracts for the execution of works for the integrated management and maintenance contracts of trunk roads in Scotland by way of restricted procedure. The contracts were to be let in four units. One of these was for the South West unit. Tenderers were able to tender only for the whole of the works concerned within each unit. Nothing in this appeal turns on the information given in the notice. However we note that the preamble to the Council Directive, which consolidated earlier Council Directives concerning the co-ordination of procedures for the award of public works contracts, contains the following paragraphs, amongst others:
"Whereas the simultaneous attainment of freedom of establishment and freedom to provide services in respect of public works contracts awarded in Member States on behalf of the State, or regional or local authorities or other bodies governed by public law entails not only the abolition of restrictions but also the co-ordination of national procedures for the award of public works contract;
Whereas such co-ordination should take into account as far as possible the procedures and administrative practices in force in each Member State;
...
Whereas, to ensure development of effective competition in the field of public contracts, it is necessary that contract notices drawn up by the contracting authorities of Member States be advertised throughout the Community; whereas the information contained in these notices must enable contractors established in the Community to determine whether the proposed contracts are of interest to them; whereas, for this purpose, it is appropriate to give them adequate information on the works undertaken and the conditions attached thereto; whereas, more particularly, in restricted procedures advertisement is intended to enable contractors of Member States to express their interest in contracts by seeking from the contracting authorities invitations to tender under the required conditions;
Whereas additional information concerning contracts must, as is customary in Member States, be given in the contract documents for each contract or else in an equivalent document;
Whereas it is necessary to provide common rules for participation in public works contracts, including both qualitative selection criteria and criteria for the award of the contract;"
[4] The 1991 Regulations provide for the procedure to be followed in relation to public procurement in the United Kingdom. Regulation 2(1) sets out certain definitions which apply to the Regulations as a whole. These include the following:
"2 Interpretation
(1) In these Regulations -
'to award' means to accept an offer made in relation to a proposed contract;
...
'contract documents' means the invitation to tender for or negotiate the contract, the proposed conditions of contract, the specifications or description of the work or works required by the contracting authority and of the materials or goods to be used in or for it or them, and all documents supplementary thereto;
'contract notice' means a notice sent to the Official Journal in accordance with regulation 11(2), 12(2), 13(2), 25(2) or 26(3);
...
'public works contract' means a contract in writing for consideration (whatever the nature of the consideration) -
(a) for the carrying out of a work or works for a contracting authority, or
...
'restricted procedure' means a procedure leading to the award of a public works contract whereby only persons selected by the contracting authority may submit tenders for the contract;
'work' means the outcome of any works which is sufficient to itself to fulfil an economic and technical function;"
[5] Regulation 4 applies to contractors and provides that when the Regulations apply, the contracting authority shall not treat a person who is not a national of and established in a member State more favourably than one who is. Regulation 8 provides for the technical specifications which may be included in the contract documents but which shall not have the effect of favouring or eliminating particular contractors. Regulation 12 provides for the rules to apply where a contracting authority uses restricted procedure. In particular, the Regulation provides for selection of the contractors to be invited to tender and provides that the contracting authority may exclude a contractor only if the contractor fails to satisfy the minimum standards of economic and financial standing and technical capacity required of contractors by the contracting authority, the evaluation to be made in accordance with Regulations 14 to 17. The Regulation further provides that the number of persons invited to tender shall be sufficient to ensure genuine competition.
[6] In the present case the first respondents sent a notice to the Official Journal which was published in January 2000. In the notice the nature and extent of the works were set out and approximate works values per annum (turnover) for each of the four separate contracts to be let, was given. In the case of the South West unit this was stated to be "26 000 000 GBP". it was also stated that "Award criteria: details will be provided in the tender invitation documents". In a general bulletin dated 22 February 2000 issued to contractors by the first respondents it was stated that the values given for the approximate works value per annum that an operating company could undertake were dependent upon certain criteria including but not limited to, amongst other things, budget availability and that on that basis the approximate range of works values for the South West unit could be "£16,000,000 - £26,000,000".
[7] On 17 April 2000 the first respondents announced, following presentation by a number of interested groups, the tender list for the South West Unit. This list named four groups, including the petitioners and the third respondents, to whom invitations to tender were to be issued.
[8] In May 2000 the first respondents issued to the four groups the tender documents pursuant to the invitation to tender. The documents then issued contained, amongst other things, instructions for tendering for the South West unit, including the form of tender, and related schedules, including the schedule of rates and prices.
[9] The instructions for tender provided for a tender period, being the period of time commencing on the date of issue of the tender documents to tenderers and ending on the tender submission date. Within that period provision was made for a tendering timetable which included a requirement for submission of outline proposals on the part of each tenderer with a related consultation process. This process was detailed in chapter 3.6 of the instructions. Contractors were required to comply with the consultation process. The process was explained as enabling the first respondents to determine "the acceptability or otherwise of the Tenderers' outline proposals". Provision was made for the first respondents to notify in writing to any tenderer objections to any of their outline proposals. On completion of the pre-tender consultations and prior to the tender submission date, tenderers were to be required to complete a Certificate A and submit it to the first respondents (chapter 3.6.11). That certificate required to be in a form prescribed in the tender documents. It required to contain, amongst other things, information concerning the tenderer's contract control and management system, which included but was not limited to financial control management and accountability. The financial part of the system required to take account of "the annuality of the Scottish Ministers' budgeting and expenditure procedure and the work and other similar codes specified by the Scottish Ministers in the Tender Documents". The certificate also provided, amongst other things, for information about the tenderer's quality system and quality plan. The form in which the Tender Submission was to be made was also prescribed in the Tender Documents. Appendix A to the instructions described the information on their proposals which tenderers were to submit with their tenders. This information was not to differ substantially in appearance or principles or detail from the information contained within Certificate A which had previously been submitted to the first respondents prior to the submission of tenders. It also gave the format in which the signature section associated with Appendix A to the Form of Tender was to take.
[10] It is of note that provisions in chapter 3.2 for Tender Queries include the following:
"3.2.1 Any queries arising from the Tender Documents which may have a
bearing on the proposed Tender should be raised with the Scottish Ministers as soon as possible in writing and in any case must be received not later than 12 noon on 25 September 2000 in accordance with the procedures set out in sections 3.3 and 3.4 of these Instructions for Tendering. The Scottish Ministers shall not consider requests for an extension of the Tender Period unless there are exceptional unforeseen circumstances, as the Scottish Ministers do not want to delay the anticipated Contract Commencement Date unless it is absolutely necessary in their opinion.
3.2.2 Tenderers shall note that the Scottish Ministers are conducting four
concurrent and separate tender competitions for Term Contracts for Management and Maintenance of the Trunk Road. The Tender Documents for these contracts have been prepared using a uniformity of approach. To ensure that such uniformity of approach and pricing framework for all the Tenderers and the Tenders is maintained, the Scottish Ministers shall notify all Tenderers within the 4 tender competitions through the Communications Procedures in respect of all communications raised by Tenderers which affect all the tender competitions."
Chapter 3.6 made provision for the "Consultation process" as follows:
"3.6.1 Tenderers shall comply with the undernoted Consultation Process.
3.6.2 During the Tender Period the Scottish Ministers shall conduct a
Consultation Process with all Tenderers in respect of determining the acceptability or otherwise of the Tenderers' outline proposals."
In chapter 3.6.7 particular matters to be discussed during the consultation process were identified and listed. At the end of this paragraph it was stated:
"For the avoidance of doubt the foregoing list shall not be construed by Tenderers as the order of importance of the identified issues. All issues
in respect of the Consultation Process are important to the Scottish
Ministers.
The level of detail and subject matter of the aforementioned consultation issues shall be in the same level of sub level detail as shall be specified in Certificate A to these Instructions for Tendering. The level of detail provided within each heading shall be sufficient in the opinion of the Scottish Ministers to allow them to confirm that they have no objections to any of the proposals that shall be submitted in Certificate A to these Instructions for Tendering".
[11] Chapters 3.6.9 and 3.6.10 provided that all information submitted to or discussed with a tenderer during the process was to be treated by the first respondents as in the strictest "commercial in confidence" and that any objections to any of the tenderers' outline proposals should be notified to the tenderers in writing.
[12] Chapter 5 of the instructions contained provision for "The requirements of the tender".
"5.2.1 Tenderers shall note that the Contract provides that the responsibility
for the sufficiency of the Tender submitted including but not limited to the pricing of Schedule 2 to the Tender Documents shall remain with the Operating Company. Tenderers shall be deemed to have inspected and examined the Unit and its surroundings and to have satisfied themselves
(i) as to the nature of the Unit;
(ii) the nature of the Operations and the nature of the work and
materials necessary for the execution of the Operations;
(iii) the means of communication with and access to the Unit;
(iv) the accommodation they may require; and
in general to have obtained for themselves all necessary information as to risk contingencies and all other circumstances influencing or affecting their Tender and shall bear all the associated risks in respect of such.
Tenderers shall particularly note that they shall be required to provide all resources necessary to enable them to fulfil their obligations under the Contract. The Scottish Ministers shall not provide to the successful Tenderer any existing depots or storage facilities or contractor's plant and equipment or winter maintenance plant and equipment and the like or any other resource of any nature whatsoever unless otherwise specified in the Contract. For the avoidance of doubt the various resources identified in Appendix A Tender Submission incorporating Annexes 1 to 18 inclusive shall be deemed to be the minimum provision and shall not be construed as being all the resources required by the Operating Company to fulfil its obligations under the Contract including but not limited in particular to Winter maintenance Operations and Emergencies Operations. The Contractor shall be required to provide all necessary resources to meet its obligations under the Contract notwithstanding the provisions of Appendix A Submission."
[13] It is convenient to note that the instructions for tendering also contained the following definition in chapter 1.1:
"Available Information" means all information contained in the Information Pack or in the Information Room or otherwise disclosed to Tenderers as part of the tendering competition.
[14] Furthermore, in the same chapter it was provided as follows:
"1.3.1 The Information Pack does not form part of the Tender Documents. In
the event of any discrepancy between the Tender Documents and any of the information, records and documents contained in the Information Pack then the Tender Documents shall prevail.
1.3.2 No warranty is intended or implied by the Scottish Ministers towards
Tenderers as to the accuracy or completeness of the Available Information whether in whole or in part and the Scottish Ministers shall not be held to owe any duty of care towards any Tenderer in connection with anything contained within the Available Information.
1.3.3 A Tenderer may use any part of the Available Information in the
process of providing a Tender. In such circumstances the Tenderer shall be held to have satisfied itself by carrying out sufficient checks as to the correctness, sufficiency and adequacy of the said Available Information used to ensure that it is fit for the purpose for which it is used or intended to be used. All risks associated with the use of the Available Information rest with the Tenderers and the Operating Companies.
1.3.4 During the Tender Period the Scottish Ministers may provide to
Tenderers such further Available Information concerning the commitment of resources to Trunk Roads as has been provided to them by the various existing organisations who are managing and maintaining the Trunk Roads on their behalf."
It is also to be noted that provision was made for tenderers to have arranged access to existing routine maintenance and managements system by prior arrangement but the procedure was to ensure that tenderers were treated equally as part of the tender competition (chapter 1.4.7)
[15] The instructions for tendering made provision for Tender Acceptance upon submission of tenders as follows:
"2.1 Tender Acceptance Period
2.1.1 The Scottish Ministers do not bind themselves to accept the lowest or
any Tender. It is the Scottish Ministers' policy to make every effort to reach a decision on the execution of any contract within 12 weeks of the Tender Submission Date. If the said 12 weeks period appears likely to be exceeded the Scottish Ministers shall initially seek to negotiate an extension of that period with Tenderers. Tenders shall therefore remain open for acceptance for a minimum of 12 weeks.
2.1.2 It is the practice of the Scottish Ministers in respect of each and every
contract which they award to publish the estimated amount of the successful Tender and the name of the successful Tenderer. It shall be noted that for this Contract the Tender shall be priced on the basis of a Schedule of Rates and Prices and as such there shall not be a Tender Price."
[16] In terms of the timetable as originally intimated in the instructions for tendering, the tender submission date was fixed as 16 October 2000 but by a subsequent bulletin, this was altered to 30 October 2000. In terms of chapter 3.7 of the instructions for tendering it was provided that tenders were to be made on the form of tender together with all the appendices to the form of tender incorporated in the instructions. Furthermore, it was specifically provided that any tender which arrived after the due date was to be treated as a qualified tender and would be given no further consideration by the first respondents. This was also stated in chapter 5.8.1.
[17] The instructions for tendering provided for the Assessment of Tenders as follows:
"4.1 The Assessment Procedure
4.1.1 This section 4 explains for the guidance of Tenderers the basis on
which the Scottish Ministers intend to assess the Tenders.
4.1.2 The Contract shall be awarded on the basis of the conforming Tender,
which is the most economically advantageous Tender to the Scottish Ministers. The Scottish Ministers shall assess the Tenders on the basis of the assessment criteria specified in section 4.2 of these Instructions for Tendering.
4.1.3 For the avoidance of doubt and in order to demonstrate to Tenderers
the transparency of the Assessment Process, The Scottish Ministers shall notify all Tenderers in writing by post of the base quantities (which for the avoidance of doubt shall include numerical and monetary quantities) that they intend to use as part of the assessment process. In respect of Series 6300 to Series 6500 inclusive additional notional monetary values will be inserted into the base quantities to which the respective percentage identified in each Series shall be applied. The details of the base quantities shall be posted to each Tenderer on the 30 October 2000. To ensure the probity of the assessment procedure no Tenders shall be opened earlier than the 30 October 2000. Where there shall be any delay in the posting to each Tenderer the base quantities referred to earlier in this paragraph 4.1.3 the Scottish Ministers shall not open any Tenders until the day after the day on which the said quantities were posted to Tenderers.
4.2 Assessment Criteria
4.2.1 The criteria that shall be used to determine which Tender shall be the most economically advantageous in descending order of importance shall be as follows:
(i) (a) Appendices A to I inclusive to the Form of Tender;
(b) Appendix G to the Form of Tender where required to be part of
the Tender by the Invitation to Tender (dated 30 May 2000);
(c) Appendix A to Instructions for Tendering - Tender Submission
incorporating Annexes (i) to (xviii) inclusive. The information submitted with said Appendix A shall not differ substantially in appearance or principles or details from the information provided as part of Certificate A that has been previously submitted by the Tenderers to the Scottish Ministers prior to submission of Tenders in accordance with these Instructions for Tendering unless the Scottish Ministers shall have specified in writing, prior to submission of the Tender, any objections to any of such information.
The lowest 'overall comparative cost of Tender' resulting from the assessment procedure carried out by the Scottish Ministers and specified in this section 4 of these Instructions for Tendering utilising the assessment criteria contained herein applied to the base quantities referred to in paragraph 4.1.3 of these Instructions for Tendering shall be deemed by the Scottish Ministers to be the most economically advantageous Tender.
4.2.2 The detail of the assessment criteria that shall be used to determine
whether or not the lowest 'comparative cost of Tender' would remain the most economically advantageous Tender to the Scottish Ministers shall be as follows:
Variable Items
(a) the base quantities referred to in paragraph 4.1.3 of these
Instructions for Tendering shall be varied within the range 70 percent to 130 percent inclusive for the following Series referred to in Schedule 2 Part 2 to the Contract as follows:
...
(b) The base quantities in paragraph 4.13 of these Instructions for
Tendering shall not be varied for the following Series referred to in Schedule 2 Part 2 to the Contract as follows:
...
(c) The base quantities shall be varied within the range 1 percent to
130 percent inclusive for the following Serves referred to in Schedule 2 Part 2 to the Contract as follows:
...
Notwithstanding paragraph 4.2.2(b)(i) of these Instructions for Tendering the 'k' factor referred to in section 5.15B of these Instructions for Tendering and inserted by the Tenderer in Item 02/001 of Series 2800 of Schedule 2 to the Contract shall be used to calculate the most economically advantageous Tender to the Scottish Ministers due to the M act specified in Annex 7 to Schedule 1 to the Contract varying from the specified M ave for a Unit within the range 70 percent to 130 percent.
Once these 'adjusted comparative cost of Tenders' have been established through the application of the sensitivities within the ranges specified earlier in this paragraph 4.2.2 the Scottish Ministers shall apply weightings to each of the 'comparative cost of Tender' and to each of the 'adjusted comparative cost of Tenders' after which the sum of each such weighted 'comparative cost of Tender' and the 'adjusted cost of Tender' shall for the purposes of these Instructions for Tendering become the 'overall comparative cost of Tender'.
If the Scottish Ministers, having carried out the sensitivity assessments equally in respect of all Tenders to establish each 'overall comparative cost of Tender', consider that a Tender has been submitted which because of its pricing structure could prove to be more costly when compared with other Tenders assessed on the same basis under any combination of the sensitivity ranges or weightings referred to within this paragraph 4.2.2 then the Scottish Ministers may reject such Tender and give it no further consideration even though it may have the lowest 'overall comparative cost of Tender'."
[18] Chapter 4.2.1 makes reference to "Appendices A to I inclusive to the Form of Tender" The appendices dealt with various matters but included Appendix A and Appendix E. Appendix A to the Form of Tender required to contain the information on the tenderer's proposals which was not to differ substantially from that previously submitted to the first respondents prior to submission of the tender within Certificate A. That information was to be submitted by way of annexes under the sections which were detailed as matters to be discussed in chapter 3.6.7 and which included sections on "Quality System and Quality Plan" and even on "Innovative Proposals for the Contract". Appendix E to the Form of Tender was to contain the submission as part of the Tender of the priced schedule of rates and prices contained in a schedule to the Tender documents. The schedule of rates and prices which was delivered to tenderers contained as preambles certain general directions, the second paragraph of which provided, amongst other things, that "the nature of the work and, where relevant, its frequency of execution is to be ascertained or assessed by reference to the Scottish Ministers' Requirements and the Conditions of Contract". The Scottish Ministers' Requirements were set out in the series of items described in the schedule without quantities. As provided for in the general directions, the tenderer was required to enter a rate or price against each individual item. In certain series fixed price lump sum monthly items were to apply.
[19] In chapter 5 of the instructions, amongst other things, tenderers were reminded that their proposed Quality System and Quality Plan took account of the contract requirement that certain specified certificates in relation to work, goods and materials offered, were to be available (chapter 5.4). Special insurance requirements were to be effected and failure to present the required insurance details could be considered to be a qualification of the tender (chapter 5.5). Relevant health and safety legislation and regulations were to complied with as specified in the contract documents (chapter 5.6). Chapter 5.8.1 makes clear that the first respondents' decision on whether or not a tender is acceptable is to be final and that the tenderer shall not be consulted unless the first respondents consider that a part of the tender is ambiguous and may be clarified by consultation at the discretion of the first respondents. Chapter 5.9.1 makes reference to the principles of public procurement and in particular that, as far as reasonably possible, payments for goods, works or services were made after provision. It also intimated that the first respondents would examine a tender carefully for "any indication of a pricing strategy which provided for substantial payments at the outset of the Contract". The length of the contract was referred to in chapter 5.10, and included the date upon which the successful tenderer would be given possession of the unit. Failure to provide a prompt payment certificate for payment of sub-contractor accounts rendered a tender qualified (chapter 5.11). Failure to complete a goods vehicle operator licensing certificate rendered a tender qualified (chapter 5.13). Key performance indicators were to be used by the first respondents in measuring the performance of each operating company. Tenderers were reminded of the need to ensure that their proposed contract control and management system was able to take account of the need to identify and record such key performance indicators (chapter 5.15). Failure to meet specified requirements to take account of the Transfer of Undertakings (Protection of Employment) Regulations 1991 entitled the first respondents to reject a tender (chapter 5.15A). Failure to insert a factor within a specified range of value for the procedure for reconciliation of payments for an item specified in Schedule 2 to the contract rendered a tender qualified (chapter 5.15B). It is also to be noted that these various issues include particular matters which involve costs to be absorbed in the schedule of rates and prices, as is made clear in the preambles set out in Schedule 2.
[20] In particular, paragraph 2 of the general directions in Schedule 2 makes clear that the nature of the work and, where relevant, its frequency of execution was to be ascertained or assessed by reference to the "Scottish Ministers' Requirements and the Conditions of Contract." Furthermore it is there stated:
"The rates and prices entered in the Schedule of Rates and Prices shall be deemed to be the full inclusive value of the work covered by the several items including but not limited to the following, unless expressly stated otherwise:"
In what follows there is reference, for example, to costs in connection with the provision of labour, supply of materials, goods etc., provision of plant, traffic safety and traffic management measures required by the first respondents' requirements, compliance with quality assurance requirements of the contract, and compliance with the Transfer of Undertakings (Protection of Employment) Regulations 1981. Elsewhere in the preambles , for instance, paragraph 17, design and supervision of operations, or paragraph 21, traffic safety and traffic management, are other matters which reflect the issues which required to be addressed in the tenderer's outline proposals and confirmed in the tender, before they were reflected in the schedule of rates and prices.
[21] The interrelationship between the requirements of the tender, (chapter 5), the form of the tender submitted with its reference to the required information and its conformity with the outline proposals as set out in certificate A and the schedule of rates and prices is plain. Thus the schedule of rates and prices reflected how any particular tenderer decided to spread the costs of meeting his proposals for undertaking the contract works over the whole period of the contract, a matter which was wholly within his own control and did not only depend upon his assessment of the quantities which would be required for each item where quantities were called for. These costs would be measured by the manner in which he was able to provide for the resources and labour necessary for carrying out the works. On those matters, which were subjective in the sense that they represented the technical capacity which an individual tenderer would make available to meet the contractual obligations required of every tenderer to carry out the works, the 1991 Regulations and the Council Directive only required that they meet minimum standards of the first respondents. We refer to Regulation 12(4) and (10)(d), in particular. Above that minimum any tenderer was free to apply whatever resources he chose and to recover the costs of doing so in such a way as he chose within the range of the items in the schedule, against his assessment also of the budgetary restraints that might apply during the currency of the contract period.
[22] The petitioners submitted their outline proposals as did the other tenderers to the first respondents and in due course a Certificate A as required by chapter 3.6.11 of the instructions for tendering. The tender submitted by each tenderer required to be in a specified form which included Appendices A to I inclusive as part of the tender. The form of tender submitted for each tenderer began with a statement that "Having examined the Tender Documents for the undertaking of Operations on the [specified] Unit (and the matters set out in Appendices A, B, C, D, E, F, G, H and I hereto), we offer to undertake the Operations therein...We understand that you are not bound to accept the lowest, most economically advantageous or any Tender you may receive".
[23] It was not disputed for the parties that tenders were submitted by the petitioners and other tenderers, including the third respondents, timeously, that is to say, by 30 October 2000. In accordance with the provisions of chapter 4.1.3 of the instructions for tendering, the first respondents notified all tenderers in writing of the base quantities which they intended to use as part of the assessment process after that date. It is not in dispute that by letter dated 6 November 2000 an amendment was made to the base quantities notified by the first respondents. But from the terms of the letter (which is not referred to in the amended petition) it does not appear to us that this was any more than a correction as opposed to a change of substance.
[24] Regulation 20 of the 1991 Regulations sets out the criteria for the award of a public works contract. The relevant provisions in that Regulation to which reference was made in the course of submissions are as follows:
"(1) Subject to paragraphs (6) and (7) below, a contracting authority shall award a public works contract on the basis of the offer which-
(a) offers the lowest price, or
(b) is the most economically advantageous to the contracting authority.
(2) The criteria which a contracting authority may use to determine that an offer is the most economically advantageous include price, period for completion, running costs, profitability and technical merit.
(3) Where a contracting authority intends to award a public works contract on the basis of the offer which is the most economically advantageous it shall state the criteria on which it intends to base its decision, where possible in descending order of importance, in the contract notice or in the contract documents."
[25] We note in passing that a contracting authority which has awarded a public works contract shall, within 15 days of the date on which it receives a request from any unsuccessful contractor pursuant to Regulation 20, inform that contractor why he was unsuccessful (Regulation 22(1)).
[26] Before we consider the submissions for the parties in detail, it is appropriate to consider the nature of the contract. It is a commercial contract in which the first respondents are to be the employer and the successful tenderer will become the contractor to carry out the works. There is no specialty introduced merely by the fact that it so happens that the petitioners here are a consortium of local authorities, on the one hand, and the first respondents are the Scottish Ministers. The contract was notified in the notice in the Official Journal, under the heading "Financing and payment", as being a "Combination of fixed price lump sums and schedule of applicable rates" details of which would be provided in the tender invitation documents. The Lord Ordinary identified in paragraphs 17, 18 and 19 of his opinion, and his view on these matters was not challenged before us, the nature of the contract, the fact that the tendering process was not one which aimed at producing a contract price for specified work, and the risks inherent in the process for both the employer and the contractor. It was not suggested before us that a contract of this kind, in which no details of quantities were provided by the employer, was in any sense unusual. The Lord Ordinary reached the conclusion, and again this was not challenged before us, that he could not identify any inherent unfairness or illegality in the procedure adopted as a matter of domestic contract law. He noted that it was a procedure in which prospective competing tenderers were required to make their own assessments, on a common pool of information, of the likely work content of variable items within the description of works in deciding on the balance and amount of their rates. Also the Lord Ordinary took the view, and again this was not challenged before us, that it made no difference that the prospective employer reserved to himself the right to make an independent assessment of the quantities likely to be involved and to use that assessment in weighing the attractiveness of the competing tenders. As he observed, correctly in our opinion, premature disclosure of the employer's assessment could easily distort the competition. If this had been an ordinary commercial transaction, albeit it concerned the first respondents as the prospective employer, the first respondents would not be under any obligation to disclose the basis upon which they proposed to exercise their discretion in selecting the contractor with whom they will conclude the contract. In that event they would not be under any duty to act fairly as between the competing tenderers unless otherwise there was an established practice in the matter to which the prospective tenderers could point as giving rise to a reasonable expectation that the same practice was going to be followed in the particular case in question (Stannifer Developments Ltd. v. Glasgow Development Agency 1999 SC 156).
[27] The specialty is that since the contract is a public works contract, it is the obligation of the first respondents to ensure that the contract is one which is open to contractors throughout the European Union conform to the freedom of establishment and freedom to provide services in respect of public works contracts awarded in Member States. It is also required under the Council Directive that there be common rules on participation in such contracts, which include both qualitative selection criteria and criteria for the award of the contract. The purpose of such rules, as is clear from both the Council Directive and the 1991 Regulations, is to ensure, in the first place, that there is no discrimination between the nationals of one Member State and the nationals of any other (see, e.g. Article 22(4) of the Council Directive ). The qualitative criteria are to be distinguished from the criteria for the award of the contract. The latter criteria are to relate to the qualities of the service which a contractor offers and of the work which he proposes to carry out (see e.g. Advocate General Darmon in Gebroeders Beentjes BV v. State of the Netherlands 1988 ECR 4635 at para. 36 and again at para. 38). At paragraph 38 Advocate General Darmon also pointed out that the directive in question placed no time limit on the assessment of the suitability of a contractor. As he said there:
"An awarding authority belatedly informed of a reason for a contractor's unsuitability must be able to rely on it up to the last moment, so long as there is no misuse of powers and it is not a disguised refusal to allow the criteria for awarding the contract to operate in the normal way".
In the same case the Court emphasised in paragraph 18 that in the case of an award to be made to the most economically advantageous tender, the decision must be based on various criteria according to the contract. It observed in paragraph 19 that the choice of criteria "is limited to criteria aimed at identifying the offer which is economically the most advantageous". In the Beentjes case the Court was considering the terms of Council Directive 71/305/EEC, including the provisions in Article 29(1) and (2). These provisions were in all material respects identical with those in Article 30 (1) and (2) of the Council Directive and with the terms of regulation 30 (1),(2) and (3) of the 1991 Regulations. In particular, the terms of regulation 30(3) are in effect the same as those of Article 29(2) of the 1971 Council Directive, as well as those of Article 30(2) of the Council Directive. At paragraph 20 of its judgment the Court stated:
"Furthermore the directive does not lay down a uniform and exhaustive body of Community rules; within the framework of the common rules which it contains, the Member States remain free to maintain and adopt substantive and procedural rules in regard to public works contracts on condition that they comply with all the relevant provisions of Community Law..."
Again, at paragraphs 25 and 26 of their judgment the Court had regard to certain national rules in which provision was made for an award of a contract to be made "to the tenderer whose tender appears the most acceptable to the awarding authority". The Court observed that such a provision would be incompatible if its effect was to confer on the authorities awarding contracts "unrestricted freedom of choice as regards the awarding of the contract in question to a tenderer." The Court then went on to say this:
"On the other hand, such a provision is not incompatible with the directive if it is to be interpreted as giving the authorities awarding contracts discretion to compare the different tenders and to accept the most advantageous on the basis of objective criteria such as those listed by way of example in Article 29(2) of the directive."
[28] Reference was also made before us to Commission v. Kingdom of Belgium 1996 ECR 2043. In that case the Court was concerned with an award where, after the opening of tenders, amendments had been made to one of them. In that regard the Court observed in paragraph 54 that the procedure for comparing tenders had to comply at every stage with both the principle of equal treatment of tenderers and the principle of transparency so as to afford equality of opportunity to all tenderers when formulating their tenders. While that decision was based upon a reference to a different directive from the Council Directive, the principle of equal treatment is one of general application as the Court pointed out at paragraph 51 under reference to Commission v. Denmark 1993 ECR 3353. The Court also pointed out in paragraph 55 that the transparency of the tendering procedure is provided by such matters as the setting of a final date for receipt of tenders and the setting of a date for opening tenders so that the terms of all the tenders submitted are revealed at the same time, and thus no one tenderer gains an advantage over another. On the other hand, the Court pointed out in paragraph 56 that when a contracting entity took into account an amendment to the initial tenders of only one tenderer, it was clear that that tenderer enjoyed an advantage over his competitors, which breached the principle of the equal treatment of tenderers and impaired the transparency of the procedure. In the Commission v. Denmark the Court at paragraph 37 observed that the principle of equal treatment required that all the tenders comply with the tender conditions so as to ensure an objective comparison of the tenders submitted by the various tenderers. In Telaustria Verlags GmbH v. Herold Business Data AG (7 December 2000 unreported) the Court, while it was concerned with different directives governing the award of public works contracts and held that the contracts in question were excluded from the scope of the particular directives, nevertheless observed in paragraph 60 that the contracting entities concluding such contracts were bound to comply with the fundamental rules of the Treaty, in general, and the principle of non-discrimination on the ground of nationality. In that context the Court commented in paragraph 61 that that principle implied, in particular, an obligation of transparency. It then said this:
"62. That obligation of transparency which is imposed on the contracting authority consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to enable the services market to be opened up to competition and the impartiality of procurement procedures to be reviewed."
It follows that concealment of the criteria to be applied before the award of public works contracts would be incontestably inconsistent with transparency and equal treatment (see Leggatt L.J. in R. v. Portsmouth City Council (1996) 9 Admin. LR 535 at page 541C, a case concerned with the award of a contract on the lowest cost basis).
[29] Before us the submissions for the parties generally followed those put before the Lord Ordinary as recorded by him. The primary submissions for the petitioners were directed to the first and fifth grounds of appeal. These were that the Lord Ordinary had erred, firstly, in holding that no breach of the 1991 regulations or the Council Directive had been established on the agreed facts, notwithstanding that the base quantities, being part of the criteria used by them to determine which offer was the most economically advantageous to them, were not stated in the contract notice or the contract documents; and, secondly, in failing to hold that the assessment process, in particular the choice of base quantities for assessment of the tenders which were wholly different from the quantitative information upon which the tenderers had been encouraged to prepare their tenders, was irrational and contrary to the reasonable and legitimate expectations of the petitioners. These submissions proceeded on the basis that the provision by the first respondents of the base quantities referred to in chapter 4 of the instructions for tendering was a fundamental requirement for meeting the obligation imposed upon the first respondents, in terms of regulation 20(3), that "it shall state the criteria on which it intends to base its decision, where possible in descending order of importance, in the...contract documents". The matter could be looked at in two ways. First, it could be said that they had not been expressly stated in the contract documents. Alternatively, it could be said that when stated, they were stated out of time so far as the petitioners, and indeed all the tenderers, were concerned. The overall effect was to prevent effective competition and to introduce an element of chance into the matter of making the award. The Lord Ordinary had correctly identified the problem paragraph 29 of his opinion. He noted the submission that having regard to the obscurity of the provisions in the instructions for tendering, and the lack of information about base quantities and the limiting values in the adjustment process (in the case of weighting) and the uncertainty of application of the sensitivity adjustments, there could not be effective competition. The Lord Ordinary had then said that as a matter of language, there was force in the submission that there was not effective competition where determinative values were undisclosed and unknown and could be selected without prior disclosure. In terms of analysis of the tender documents, the Lord Ordinary considered that there was substance in the criticism that the assessment process could be said to be arbitrary. However the fundamental attack on the process was that the base quantities used were outwith the limits to be drawn from any material put before the tenderers in the tendering process. As a consequence, the effect was to distort and undermine the whole assessment process leading up to the award decision. This could be regarded, in the first place, as a breach of regulation 20 in that the approach adopted by the first respondents had been arbitrary and lacking disclosure and specification since the base quantities had not been disclosed to the tenderers prior to submission of the tenders. It could also be regarded as unfair and unreasonable in the Wednesbury sense, in that the first respondents acted with a lack of transparency and in frustration of the legitimate expectations of the petitioners, and so constituted a breach by the first respondents of their common law obligations. It was possible to infer from the information provided in the contract documents the range within which the selection of base quantities on the part of the first respondents would be bound to lie. The provisions in chapter 1.3, while they specified that tenderers were to use the information and their own experience to make a realistic assessment of quantities, nonetheless
[30] The next ground of appeal was that the Lord Ordinary had erred in failing to hold that the tender and assessment process, in terms of which tenders of differing quality, each having been judged by the first respondents to satisfy certain minimum qualitative requirements which were not made known to other tenderers, were assessed solely on the basis of price, did not give equal treatment to each tenderer and could not ensure the selection of the tender which was the most economically advantageous to the first respondents. This submission was based on the proposition that the consultation process referred in chapter 3.6 was designed to make sure that the tenderers reached a level of attainment such that the first respondents had no objections to any proposals subsequently submitted to them in certificate A to the instructions for tendering. But what was not done was to indicate anything more than a threshold. There was nothing in the way of what might be termed a job specification as such. Accordingly some tenderers might be above the minimum required to pass the threshold. But when regard was had to the assessment criteria set out in chapter 4.2, these were determined by reference to the rates entered in each tender against the base quantities determined by the first respondents. If, as appeared to be suggested by the respondents, there was an intention to look for value for money, then all the tenderers, in order to be treated equally, should know what the quality threshold was. If they did not, the whole process of assessment was flawed from the outset.
[31] In our opinion, there is no merit in this last submission. It is plain from the terms of chapter 3, chapter 5 and Schedule 2 that there are certain specific standards and requirements to which all tenderers require to conform. But, not surprisingly, the first respondents required to be satisfied that prior to pricing their tender, each tenderer was in a position to meet such standards and requirements and had proposals for a system for control and management of the work which would ensure that it was carried out according to those standards and requirements. This was plainly because the mere production of a completed schedule of rates and prices could not, in itself, satisfy the requirements which were otherwise set out in the foregoing chapters. It was equally important that once satisfied by any individual tenderer that these requirements were fulfilled in their outline proposals, the first respondents required to have it confirmed, when the tender was submitted, that the costs were properly based upon those proposals and nothing less and thus that the tenderer, if successful, would be able to carry out his contractual obligations in relation to the execution of the works. The consultation procedure also provided the tenderers with the assurance that if the proposals outlined to the first respondents were incorporated in Certificate A and thereafter that was confirmed in the tender submission, the first respondents would not have any further objections to the proposals so far as the costings within that tenderer's completed schedule of rates and prices was intended to cover the matters which would enable the tenderer to carry out the contractual obligations to be undertaken by the successful tenderer. In our opinion, it is facile to say, as the petitioners do in relation to their second ground of appeal, that the process of tendering produced tenders of differing quality and from that proceed to assert that because the assessment process was based solely on price, it did not give equal treatment to each tenderer and so could not ensure the selection of the tender which was most economically advantageous to the first respondents. The first respondents were entitled to lay down certain minimum requirements for the quality of the management and execution of the works. It was for each tenderer to determine what resources would be made available to that end. To that extent the costs to be spread by each tenderer would vary according to how that tenderer intended to deploy those resources. But it was plain that at the end of the day, if their proposals were satisfactory and theirs was adjudged to be a conforming tender, their tender would be judged equally with the other conforming tenders by reference to the machinery set out in chapter 4.2. The first respondents undertook no further obligation than that towards any particular tenderer. The matter of selection was a matter for the first respondents' judgment using the machinery set out in chapter 4.2, of which all the tenderers were advised. Accordingly we find nothing in the pleadings to substantiate any failure on the part of the first respondents to carry out their obligation to treat the competing tenders equally so far as the manner in which the consultation process and the requirement for tenderers to produce a Certificate A in advance of the submission of the tender is concerned.
[32] The final two grounds of appeal were directed to a failure on the part of the Lord Ordinary to hold that there was a breach by the first respondents of the 1991 Regulations and the Council Directive, where base quantities were not set out in the contract documents, in that the criteria stated in the contract documents on their face permitted the first respondents to apply sensitivity adjustments, weightings and other checks to the tenders without reference to published or objective criteria, and, further, in failing to hold that the requirements on the first respondents in terms of the 1991 Regulations and the Council Directive included a requirement of transparency, in terms of which the assessment procedures stated in the contract documents required to ensure that the assessment was objective and not arbitrary. It was submitted that the rules provided for in chapter 4.2.2 did not set out requirements of sufficient objectivity since when they came to be applied, the tenders had already been opened. The first respondents could then choose where to apply weightings and sensitivities. Sensitivities were applied only on the basis that they fell within a specified range. Nothing was said about weightings. While it may be that they would in fact be used to make a judgment, that did not satisfy the requirement for an objective assessment.
[33] In considering these submissions it is appropriate to consider the averments in the petition. The petitioners first of all make reference to the consultation period during which the first respondents conducted a series of consultation meetings with potential tenderers which, it is averred, were directed to influencing the quality of their submissions and during which, at no stage, did the first respondents make known to the petitioners what was discussed at these consultations with the other parties. It is then stated that in the period leading to the submission of tenders, the first respondents provided information from which, it is said, all prospective tenderers could reasonably assume a range of quantities which would be included in the assessment of tenders. It is also said that it was emphasised by the first respondents to the petitioners that the tenders would be considered first on the basis of attaining a certain minimum quality threshold and thereafter on the basis of lowest price. The petitioners then refer to the fact that the earliest date upon which prospective tenderers could have received details of the base quantities was the day after the final date for the submission of tenders. It is said that the quantities model which was in due course issued with the tender documents was obscure and unusual in that it required a price to be quoted in respect of a large number of items without any indication of what quantities of the said items were to be used and that it was unclear whether the evaluation was to take place by reference to a period of 1 or 5 years. It is further averred that the provision by which the petitioners did not receive the details of quantities, which are said to be "the relevant evaluation criteria", until after the last day for submission of tenders, "allowed the first respondents, after opening the tenders and whilst evaluating them, scope to change the figures" within the bands stated, and enabled them to select a risk level in the formula applicable to winter provision with a variable band. Thereafter, it is said, that weighting would be applied by the first respondents to produce the overall comparative cost of the tender, and that no criteria, objective or otherwise, were indicated in the instructions for tendering "as to the manner in which the weighting was to be applied". Under reference to chapter 4.2.2 it is then said that the first respondents give themselves discretion to reject a tender from further consideration even though it might have the lowest overall comparative cost of tender, due to pricing structure considerations.
[34] The first issue to be addressed must be, we consider, to determine what are the criteria stated in these contract documents which constitute the criteria for the award of the contract within the meaning of the 1991 Regulations and the Council Directive. The petitioners' submissions on the matter of breach of the 1991 Regulations and the Council Directive stand or fall on the premise that the base quantities formed part of these criteria.
[35] In our opinion, when proper regard is had to the terms of the instructions for tendering, there is neither factual nor legal basis for the premise that the base quantities formed any part of the criteria for the award of the contract or, in a case such as the present, of the criteria to be used in the determination of the offer which is the most economically advantageous, all within the meaning of the 1991 Regulations and the Council Directive. The base quantities were no more than an element, no doubt important, in the machinery by which, after the tenders had been submitted and any qualified tender, i.e. a non-conforming tender, had been excluded, certain listed criteria - relevant already to the assessment of conforming tenders - fell to be taken account of in deciding which tender, in the estimation of the first respondents, was the one which was the most economically advantageous to them. We refer in particular to the further discussion of this at paragraph 38 below. By excluding non-conforming tenders, the first respondents made certain that all remaining tenders submitted complied with the criteria which had been set out as the requirements for a tender, including the requirement that each competing tenderer should meet the minimum standards for economic, financial and technical capacity for a potential tenderer. How these criteria were to be taken account of in the selection within the conforming tenders, this not being a contract to be awarded to the tender offer having the lowest price, was a matter upon which the first respondents were entitled to exercise their own judgment and discretion so long as they treated each tenderer equally. However the instructions did in fact set out the manner in which the machinery was to operate. We observe at this stage that the form of the contract is not in any sense unusual in that it is based upon rates and prices for specified items, which make up the contract works, but without quantities. It did not require any tenderer to disclose either to the first respondents or to other tenderers the basis of quantities upon which they composed their tender.
[36] The selection process began with what might be called a template of base quantities which represented the first respondents' best estimate of base quantities. The Lord Ordinary said this about the matter, and we did not understand that this was in any way challenged as a matter of fact:
"These views are wholly consistent with the attitudes adopted by the tenderers in this case. The petitioners and the third respondents lodged tenders. There was no objection to the structure of the tender documents nor to the procedures set out. It was not stated at any time prior to the written notice of these proceedings that there was any difficulty in completing tenders or in making the necessary estimates for the likely pattern of work or of the quantities necessarily assumed to enable a rational decision to be reached on the individual rates or on the balance within the tender."
That template was prepared before any of the offers from tenderers was opened and so before their details either by way of rates or prices could be known to the first respondents. Its preparation was not concerned with assessment of the costs of meeting the contractual obligations on the part of any tenderer or their apportionment through the pricing structure. All tenderers were provided with that template before the tender submissions were opened in the knowledge that that was the template to be applied to all the tenders. Furthermore in the exercise which followed upon the application of that template, in its initial stages, a total figure was brought out for each tender submission in a manner which, we consider, the Lord Ordinary correctly described in paragraph 21 of his opinion, where he pointed out:
"Any reasonably experienced and skilled contractor would have understood from these provisions that the assessment procedure would involve the application of the rates submitted in his tender to base quantities identified for each relevant head of work by the first respondents. It would have been obvious that one result of that exercise would have been a series of products which by addition would have produced a sum which could be represented as a price for those quantities of work at the contractor's rates, but which could be different, at least within certain parameters, from the price which would have emerged from a calculation which used only the rates and the contractor's own estimate of the likely quantities."
There is, in our opinion, no arbitrariness in the process so far since the template is applied in the same way to all the conforming tenders. Thereafter, the process of using sensitivities and weightings, which were described as "the sensitivity assessments", was specifically stated to be carried out "equally" in respect of all the conforming tenders. In our opinion, again it cannot be said that there was any arbitrariness in that process itself. We appreciate that it could be said to be arbitrary if the sensitivity assessments were to be used differently in relation to each competing tender but that is neither what was stated in chapter 4.2.2 nor what in fact happened. The Lord Ordinary remarked that the basis upon which the parameters had been selected was not specified but he noted that the process was to ascertain the effect of varying the quantitative data for variable items within those parameters. It would not, we consider, be difficult for any tenderer, against the background of the information which had generally been made available to him, to understand that these reflected the possibilities of different budget scenarios as was explained to us and which we set out in general below. If there had been any difficulty in understanding the matter in advance of the submission of tenders, it was open to the tenderers to raise the matter as a tender query, as counsel for the first respondents pointed out under reference to chapter 3.2, in which event all tenderers would have been informed of the answer. When a proper analysis is made of the process by which the first respondents undertook to make the assessment which was to produce for each tender an overall comparative cost of tender, there is no substance in the suggestion that it was not transparent or that it was arbitrary in the sense that different sensitivities or weightings would be, let alone were, applied to one tender as compared with any other tender. In our opinion, the Lord Ordinary's conclusion that the process was a rational one is well founded. Furthermore we agree with him that the first respondents cannot be said to have breached any duty arising from the obligation of transparency and of objectivity, such as is required under community law in respect of the procedures to be adopted by a contracting authority for letting of a public works contract such as the present. That is sufficient for the rejection of the third and fourth grounds of appeal, as grounds separate from the primary grounds of appeal.
[37] But the matter goes further. The determination of what constituted the most economically advantageous offer to the first respondents was a matter for the discretion of the first respondents. It required a judgment to be made which went beyond the lowest price. We accept that where the matter is one of the lowest price alone, the discretion of the contracting authority is inevitably fettered. The first respondents had stated that they would take into account, and were thus entitled to take into account, the pricing structure of the various competing and conforming tenders, since that structure also reflected within it the technical merit of the individual tenders for the reasons which we have set out above and the manner in which the costs of managing and executing the works would be spread over the rates and prices stated in the tender schedules. That pricing structure could vary as between the tenders submitted. The submissions for the petitioners appeared to be founded on the proposition that there was, like a lowest price offer, an offer which was in abstract readily identifiable as the most economically advantageous offer by reference to price. But in our opinion that approach is flawed. It is of some moment that there was no promise that the first respondents would select any of the tenders. That is made clear in the form of tender itself. Nor was there any promise that they would select that tender which had the lowest overall comparative cost of tender. They indicated that they would set aside a tender, even one which had the lowest overall comparative cost of tender, if they considered that because of its pricing structure it could prove to be more costly when compared with other tenders under any combination of the sensitivity ranges or weightings referred to. It was upon that basis, which again referred back to the assessment process which had already been carried out to produce various scenarios from which the overall comparative cost of tender was derived, that the first respondents retained a discretion to determine which was the tender that, in their estimation, was the most economically advantageous tender to them. In doing so, they owed no duty to the tenderers other than that each tenderer was treated equally and fairly throughout the process of tendering. Thus it is specifically stated that the sensitivity assessments will be carried out "equally in respect of all tenders" and further that the final selection of the tender, which would take account of the pricing structure of the tender with the lowest overall comparative cost, was made after an assessment of it and other tenders "on the same basis". These phrases make clear that the same basis will be applied throughout the assessment process in relation to each and every tender considered. In this regard, the first respondents explained that the comparative cost of tender represented the cost produced by applying the rates and prices in each tender to the basic quantities. Thereafter, taking that figure as the central budget scenario of 100% for each tender, the same selected points for sensitivities within the ranges specified in chapter 4.2.2(a) and (c) were applied to the same series in each tender and the same weightings were applied to each tender for the purpose set out in that chapter. The sensitivity analysis was carried out to reflect three possible budget variance scenarios over the stated range, bringing out figures for three adjusted comparative costs for that tender in addition to the comparative cost of tender. The weighting analysis was undertaken to take into account probability of each of the three adjusted comparative costs of tender and also of the comparative cost of tender occurring within the contract period. The four individual weighting figures were expressed in percentage terms and amounted in total to 100%. The relevant weighting figure was applied to the appropriate sum for ea
[38] The criteria for the award to which the Regulations and the Council Directive refer and, in a case such as the present, the criteria on which an authority intends to base its decision as to the offer which is the most economically advantageous to it, must be matters which are to be of common application to all the tenders and are to be applicable to the contract work. They are to be distinguished from the machinery by which, or the ways in which, these criteria are to be taken account of - which Regulation 20(3) does not in terms require to be specified. For example, if "technical merit" is to be one criterion, (as it may be under Regulation 20(2)), there is no apparent requirement to specify how, or in what way or by whom it is to be taken account of, whether on its own or (save for the reference, where possible, to a descending order of importance) in relation to other criteria. In our opinion the relevant criteria are stated in chapter 4.2.1 (i)(a), (b) and (c). We note that the introductory words in chapter 4.2.1 include the phrase "in descending order of importance" which reflects the phraseology of both the Council Directive and Regulation 20(3). It is by reference to these criteria also that the first step of determining which are the "conforming" tenders from which the selection of "the most economically advantageous tender to the Scottish Ministers" is to be made (see chapter 4.1.2) When regard is had to what is included in sub paragraph (i)(a), namely appendices A to I, it is to be noted that these various appendices require to include material, which, if not provided, may exclude the tender submitted from further consideration as a qualified tender. In the same way, a tender submission which includes proposals at variance with those included within the Certificate A, these being the proposals referred to in sub-paragraph (i)(c) is to be considered as a qualified tender (chapter 3.6.11). That is to say, any tender which does not meet these criteria will not be included within the subsequent assessment process identified and specified in chapter 4.2.2. We were not addressed on the point specifically, but it may be said that certain of the matters with which the appendices referred to in sub paragraph (i)(a) are concerned, may be regarded more appropriately as matters relating to the qualitative criteria for tenderers. But it was, of course, open to the first respondents to exclude a tenderer from taking any further part in the competition process if it came to their attention that the tenderer did not meet those stated criteria. However, there can be no doubt that, in relation to the contract work itself, it is not only Appendix E which is relevant but also Annexes (1) to (18) to Appendix A to the Form of Tender as that is specified in Appendix A to the instructions for tendering. In chapter 5.16.1 it is made clear that the information to be provided as Annex 1 to Appendix A to the form of tender shall form schedule 5 part 5 to the contract if the tenderer is successful, and that the rates and prices to be provided as Appendix E to the form of tender shall form part 2 of schedule 2 to the contract if the tenderer is successful. But the pricing structure to which reference is made in chapter 4.2.2 is to be distinguished from the results of the arithmetical analyses which are made for the purpose of determining the overall comparative cost of each tender. That pricing structure would be in place before the tender was submitted. As the introductory words to that chapter make clear, the first respondents did not bind themselves to regard the lowest comparative cost of tender as being the most economically advantageous tender to them. Clearly the manner in which the pricing structure was composed by a particular tenderer would be influenced by those additional costs which required to be met in providing the necessary resources to meet the contract obligations o
[39] In so far as it was submitted that there was any expectation that the base quantities would fall within any specific range, the contract documents made clear that it was for the tenderers to make their own calculations as to quantities and also as to the manner of recovering the expenditure by way of depreciation and maintenance of plant and the like within those rates, and at the same time the likelihood of budgetary restrictions and how they would affect the operations over the period of the contract. There was no promise of exactly how the first respondents would make their assessment for the purpose of drawing up the base quantities which would be applied as part of the machinery for assessment of tenders submitted to the first respondents. When regard is had to the petitioners' pleadings on this matter, it is suggested that there was what was termed "a quantities model" implicit in the material which formed the contract documents for the purposes of the preparation of the tenders. In our opinion, no such expectation can be read out of contract documents in which the first respondents made clear that they neither warranted the accuracy of the information made available nor undertook any duty of care in regard to that information nor undertook that they would regard even the tender having the lowest overall comparative cost of tender as the most economically advantageous tender if, in their judgment, its pricing structure made it more costly when compared with other tenders assessed on the same basis. Certainly, no "model" is capable of being inferred from such information. Indeed, at best, the petitioners' submissions on this aspect of their case appeared to be that there were certain limits within which the base quantity for any individual item could be expected to lie. The petitioners' criticism, in their pleadings, of the base quantities notified to them is that they departed from estimates which could reasonably be made on the basis of the information provided at the time of tendering. It is said that the effect of judging the tenders by reference to base quantities which were so radically different from that which tenderers could reasonably have expected and on which they made their assumptions, was to distort the assessment process and render the outcome a matter of chance. In our opinion, this does no more than say that the first respondents may have erred in their estimate of base quantities. But in that regard they were and could be in no better or worse position than any tenderer having access to such information. Their obligation as the contracting authority may involve a duty to ensure that their procedures are transparent and to treat all tenderers equally to secure effective competition. It does not extend to a guarantee that they will do more than their best and in good faith to produce base quantities upon which to reach a decision in awarding the contract. It is pertinent to observe that the Lord Ordinary pointed out in paragraph 17 of his opinion that in the nature of things the scope of the work comprehended by the contract works could not be forecast precisely and he gave certain examples of that. The petitioners make reference to a document which formed part of the information given to tenderers, entitled Expenditure by Work-code 1996 to 1999, that is to say, historical information from which they aver it was possible for tenderers to estimate the overall quantities likely to be required over the course of the contract and thus to decide where to allocate in their prices the recovery of such costs. It appeared from their averments, and indeed from what was submitted to us for the petitioners, that this was the principal basis for their allegation that the base quantities were so radically different from that which tenderers could reasonably have expected. But, in our opinion, the Lord Ordinary correctly pointed in paragraph 32 of his opinion that the fa
[40] The petitioners' case on this branch of the argument, in its application to judicial review, is predicated upon the principle of legitimate or reasonable expectation. As was pointed out in the case of Stannifer such an expectation can arise from an express promise given by or on behalf of a public authority or from the existence of a regular practice which can be expected to continue to apply to the particular case under consideration. It may be that it arises from tacit understandings. But a representation can only be relied upon as the basis for a reasonable expectation, and thus ground for judicial review, if it is clear and unambiguous. In our opinion, there was nothing by way of promise to which the petitioners point in their pleadings which can amount to some clear and unambiguous statement that the base quantities were to be assessed other than in good faith and by reference to the information available to all the tenderers. If there was error, then, as counsel for the first respondents pointed out, the first respondents must answer elsewhere than to the tenderers for such an error, since it was in the interests of the general public and not in that of the tenderers that they were acting when they came to make their selection of the successful tenderer as being the most economically advantageous to them. We therefore reject the fifth ground of appeal. We consider that the Lord Ordinary came to the right conclusion in holding that there were neither specific nor relevant averments to instruct any failure on the part of the first respondents as would give rise to a remedy at common law.
[41] For all these reasons we have refused the appeal and sustained the Lord Ordinary's interlocutor dismissing the petition.
[42] We were addressed also on the basis that the petitioners' averments were prima facie sufficiently relevant and specific to afford a remedy such as that which they sought. It is appropriate that we deal with these submissions and express our opinion on them, since they affect the disposal of the petition and any orders which might otherwise be granted at this stage. For both the first and third respondents, it was submitted that the petitioners were excluded from seeking any remedy because of the delay that has occurred in raising these proceedings. That applied whether their remedy was sought in terms of the 1991 Regulations or at common law. At common law where a party seeks to bring the decision of a public body under judicial review, the court is entitled to have regard to that party's delay in seeking a remedy in determining whether an inference of acquiescence is made out such that the court may refuse to interfere in any way with the decision which is the subject of the application or, alternatively, may grant a remedy different from that originally sought. We were referred, in particular, to King v. East Ayrshire Council 1998 SC 182
[43] Part VII and Regulation 31 of the 1991 Regulations concern applications to the court in relation to enforcement of obligations relating to a public works contract. The Regulation, amongst other things, provides as follows:
"31(1) The obligation on a contracting authority to comply with the provisions of these Regulations other than regulations 8(6), 10(7), 20(7), 22(3), 28 and 29(1), and with any enforceable Community obligation in respect of a public works contract (other than one excluded from the application of these Regulations by regulations 6 and 7, and the obligation on a concessionaire to comply with the provisions of regulation 26(3) is a duty owed to contractors.
...
(3) A breach of the duty owed pursuant to paragraph (1) above shall not be a criminal offence but any breach of the duty shall be actionable by any contractor who, in consequence, suffers, or risks suffering, loss or damage.
(4) Proceedings under this regulation shall be brought in England and Wales and in Northern Ireland in the High Court and, in Scotland, before the Court of Session.
(5) Proceedings under this regulation may not be brought unless -
(a) the contractor 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 him pursuant to paragraph (1) above by that contracting authority or concessionaire and of his intention to bring proceedings under this regulation in respect of it; and
(b) they 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 proceedings may be brought.
(6) Subject to paragraph [(7)] below, but otherwise without prejudice to any other powers of the Court, in proceedings brought under this regulation the Court may -
(a) by interim order suspend the procedure leading to the award of the
contract in relation to the award of which the breach of the duty owed pursuant to paragraph (1) above is alleged, or suspend the implementation of any decision or action taken by the contracting authority or concessionaire, as the case may be, in the course of following such a procedure; and
(b) if satisfied that a decision or action taken by a contracting authority
was in breach of the duty owed pursuant to paragraph (1) above -
(i) order the setting aside of that decision or action or order the
contracting authority to amend any document, or
(ii) award damages to a contractor who has suffered loss or damage
in respect of a breach of the duty owed pursuant to paragraph (1) above if the contract in relation to which the breach occurred has been entered into."
[43] On averment in the petition it is stated that the petitioners "understand that in respect of the South West Area the first respondents intend to award the contract to the third respondents...The petitioners further understand that the announcement in respect of the respective units, including the South West unit will take place on the reconvening of the Scottish Parliament on or about 8th January 2001." We were advised that on Sunday 7 January 2001 a letter was delivered by the petitioners to a representative of the first respondents giving notice of the breach of duty owed to the petitioners and of their intention to bring proceedings under this regulation in respect of it. The present petition was lodged in court on the following day, 8 January 2001. That is, of course, the date when the present proceedings were brought by way of a petition(see Secretary of State for Trade and Industry v. Normand 1994 SLT 1249) and one in which the grounds for complaint, notified to the first respondents on the previous day, were fully set out. We were further advised that, in terms of the instructions for tendering, the tenders submitted to the first respondents remained open for acceptance until Monday 22 January 2001 and that the first respondents had given undertakings that no final decision would be taken until 1 p.m on that date. As is clear from the provisions of the instructions for tendering, the contract to be awarded is intended to take effect from midnight on 31 March 2001. Furthermore the instructions also give notice of the intention of the first respondents to maintain a uniformity of approach and pricing framework for all the tenderers and the tenders, in relation to all four tender competitions which were being conducted concurrently.
[44] The principal submission for the petitioners was directed to a breach of Regulation 20 of the 1991 Regulations based on the failure of the first respondents to publish the base quantities, or the quantities model as it is referred to in the pleadings, in advance of the submission of tenders. The allegation of breach proceeded on the assertion that without knowledge of the quantities model the basis of the outcome of any determination of the contract would be an arbitrary one rather than one based upon the criterion of economic advantage. It was accepted for the petitioners that the fact that such a model would be not be available, would have been known from the outset of the competition process, since it was expressly stated in the instructions that the base quantities were not to be made available until after the submission of tenders. Accordingly, from the commencement of the tendering process the petitioners were fully aware of the existence of the facts upon which they found as constituting breach of Regulation 20. The absence of the base quantities would give rise, on the petitioners' argument, to a determination for the award of the contract which would be arbitrary and would not be based upon the criterion of economic advantage. The apprehension that such would be the case, therefore, must have been known to the petitioners from the moment that they first gave consideration to the preparation of their tender after receiving the invitation to do so. The grounds for the bringing of these proceedings existed from June 2000 at the latest. If we had been otherwise persuaded that there were relevant averments in fact and law to support any breach of Regulation 20, in our opinion, the present proceedings were not brought timeously within the contemplation of Regulation 31(5). That Regulation was clearly prepared having regard to the provisions of Council Directive of 21 December 1989 (89/665/EEC). We were not referred in any detail to the provisions of the Directive other than to the preamble which provides that:
"Whereas the opening-up of public procurement to Community competition necessitates a substantial increase in the guarantees of transparency and non-discrimination; whereas, for it to have tangible effects, effective and rapid remedies must be available in the case of infringements of Community law in the field of public procurement or national laws implementing that law".
Observing that the alleged breach is one which would have affected all tenderers, not merely the petitioners, and, indeed, in the particular circumstances of this competition process, tenderers in relation to all four tender competitions, the requirements of Regulation 31 should be read in the context of ensuring that any apprehended breach is corrected as quickly as possible. Thus Regulation 31(5) provides for notice of the apprehended breach of duty to be given to the contracting authority in advance of any proceedings in respect of that apprehended breach. The purpose of this notice is, undoubtedly, to enable the contracting authority to consider in advance of any proceedings whether there is warrant for the apprehension of such a breach of duty on their part and, if so, to take corrective action. But even if such proceedings were to be taken very shortly after such notice has been given without any corrective action being taken in the interim, the proceedings still require to be brought promptly and in any event within three months from the date when grounds for the bringing of the proceedings first arose, unless there is good reason for extending that period. We have to say that in the present case we would not have been disposed to grant any such extension, having regard to the delay that has occurred since June 2000. During the period since that date not only has the tendering process proceeded through the submission of outline proposals to the submission of tenders, but the first respondents have proceeded to consider all the tenders submitted for all the four tender competitions over a very substantial period of time without any notice of any apprehended breach being given by the petitioners, in terms of Regulation 31(5)(a), or by any other tenderer for the same contract, or, it would appear, by any other tenderer for any of the remaining three contracts. Even if we had been persuaded that there were relevant averments in fact and law to suggest that the grounds for the bringing of proceedings could only be said to have arisen upon the publication to tenderers of the base quantities, an issue which would be common to all four tender competitions, the information before the petitioners was, from a relatively early date after 30 October 2000, such as to indicate to them that they had grounds for apprehending that there had been a breach of Regulation 20. No notice was given in terms of Regulation 20(5)(a) until immediately before the present petition was lodged and while it may be said that the petition was lodged promptly and within the period of three months referred to in sub-paragraph (b), the petitioners had allowed the whole assessment process to continue without challenge, a process which involved consideration of all the tenders lodged, both for the contract for the south west area and for the remaining three areas. It is a matter of averment for the petitioners in statement 5 of the petition that by late December 2000 the first respondents were in position to sign contracts for two other areas (though this was postponed), that all four units would be dealt with together and that the announcement would take place on the reconvening of the Scottish Parliament on or about 8 January 2001 (that is the date of the lodging of the present petition) and that it is the intention of the first respondents to award the contract for the south west area to the third respondents. The petitioners seek interim orders by way of suspension of the assessment procedure undertaken by the first respondents to determine the award of the contract in the south west unit and interim interdict of the respondents from taking any steps towards award of the contract pending review in terms thereof. It is averred that the orders "are required in order to maintain the status quo pending review of the Assessment Procedure and the procedure leading thereto and involved therein undertaken by the First Respondents..."