Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2016] CSOH 12

 

CA175/14

OPINION OF LORD JONES

In the cause

JOHNSON & JOHNSON MEDICAL LIMITED, t/a DEPUY SYNTHES UK

Pursuers;

against

GREATER GLASGOW HEALTH BOARD

Defenders:

Pursuers:  Lindsay QC;  Burness Paull LLP

Defender:  Currie QC, Ross;  NHS Scotland Central Legal Office

15 January 2016

Introduction
[1]        One of the pursuers’ enterprises is the manufacture of medical devices.  They are an “economic operator” in terms of regulation 4(1) of the Public Contracts (Scotland) Regulations 2006 and those of 2012 (“the Regulations”;  “the 2006 Regulations”;  or the 2012 Regulations” depending on the context).  The 2012 Regulations consolidated the 2006 regulations and all subsequent amendments.  The 2012 Regulations also contain further amendments.  The defenders are a health board constituted under the National Health Service (Scotland) Act 1978, as amended.  They are a “contracting authority” in terms of regulation 3 of the Regulations.

 

The factual background
The framework agreements
[2]        The following factual background is admitted or agreed, except where otherwise indicated.  In 2007, the National Health Service in Scotland (“NHS”) procured two separate framework agreements for the purchase of orthopaedic hip and knee products respectively.  Both framework agreements were subject to the provisions of the 2006 Regulations.  Under each of these framework agreements, certain NHS bodies, known as "participating authorities", can call for products from parties to the agreement, in order to meet their needs for orthopaedic products.  The defenders are one of the participating authorities.  The pursuers were admitted as a supplier on both framework agreements.  In May 2010, the pursuers were awarded call-off contracts under the 2007 framework agreements for the supply of both hip and knee products.  Upon the expiry of these framework agreements, two new framework agreements were procured in June 2010.  Again, these framework agreements were subject to the 2006 Regulations.  The pursuers were successful in their application to be included in the framework agreements NP631/10 (Hip) and NP611/10 (Knee), in respect of hip and knee products.

 

The mini-competition
[3]        Under clause 4 of the terms and conditions of each of the framework agreements, participating authorities may call for supplies of goods by placing an order with a party to the framework agreements.  They may do so either by following a mini-competition process or without a mini-competition process.  On 12 July 2013, the defenders invited the pursuers to submit a tender in a mini‑competition, under the framework agreements NP611/10 & NP631/10 for orthopaedic hip and knee products, under contract reference GGC0188.  The invitation covered both orthopaedic hip products and knee components. 

[4]        Sections B2, B5 and G1 of the specification provided that the tender would have three options for award.  These were stated to be:  (i) one supplier for the majority of hip and knee products;  or (ii) one supplier for the majority of hip products and one supplier for the majority of knee products;  or (iii) one supplier for the majority of hip products per site and one supplier for the majority of knee products per site, based on a ceiling price model.  Section G1 of the defenders’ specification provided that the defenders had sole discretion to choose which of the three award options was selected; the framework agreement and specification provided no additional guidance or criterion on how that discretion should be exercised, in order to choose among the three options. 

[5]        On 1 August 2013, the pursuers submitted their tender for the three options.  The pursuers aver that their submission was “on the basis that the defenders would adopt one of these stated options and their pricing reflected that”.  The defenders do not know and do not admit the basis on which the pursuers submitted their tender or the extent, if any, to which the pursuers’ pricing reflected that basis.  They admit that the 2006 Regulations applied to the mini-competition under the framework agreements, by virtue of regulation 52 of the 2012 Regulations.

[6]        On 9 September 2013, the defenders informed one of the bidders, Stryker UK Limited (“Stryker”), that they had preferred bidder status in respect of the award of a call‑off contract for hip products.  A meeting took place on 10 September 2013 between Mr S, Commodities Team Manager of the defenders, and representatives of Stryker.  At that meeting, Stryker was given an opportunity to re-price its tender for hip products.  Stryker submitted a re‑priced tender under cover of an email, dated 11 September 2013.  The framework agreement and specification made no provision for re‑pricing opportunities or preferred bidder status. 

 

The defenders’ initial awards
[7]        Each of the three options was scored separately by the defenders.  A spreadsheet, within which all of the scores were collated by the defenders and given to the pursuers under cover of letter dated 6 August 2013 (“the scores spreadsheet”), shows that the pursuers’ combined tender for hip and knee products was the highest scoring of the combined bids.  Theirs was also the highest score for the individual knee products award.  On 9 October 2013, the defenders issued a notice of award of contract for orthopaedic knee products to the pursuers.  On the same date, the defenders issued a letter to the pursuers informing them that their tender in respect of hip products had been unsuccessful and that the defenders intended to award the contract to Stryker, on the expiry of a ten day standstill period.  (The regulations require contracting authorities to allow a period of time to elapse between the decision and signing the contract, in order to give unsuccessful bidders a chance to seek remedies if dissatisfied with the procurement process.)

[8]        Number 6/15 of process is a letter, dated 11 November 2013, from the defenders to the pursuers, in which the defenders refer to their letter of 9 October 2013, proposing the award of the contract for the supply of knee products to the pursuers.  The stated purpose of the letter was to inform the pursuers that the defenders had received a legal challenge from an unsuccessful bidder and were suspending the award process.  The pursuers were advised that the defenders wished to extend their current contract with them until 31 January 2014.

[9]        On 20 January 2014, the defenders issued to the pursuers:  (i) a letter withdrawing the contract award letter in relation to hip products and the standstill letter in relation to knee products (both dated 9 October 9013);  (ii) a new standstill letter in respect of the hip products contract;  and (iii) a new contract award letter in respect of the knee products contract. 

[10]      On 4 July 2014, the defenders wrote to the pursuers, advising them that that the defenders were going to award the contract for the supply of orthopaedic hip products to Stryker, stating that the award proceeded upon the defenders’ decision, dated 9 October 2013.  In the same letter, the defenders advised the pursuers that they were withdrawing the proposed award to the pursuers for the supply of knee products.

 

The dispute
The pursuers’ case on record
[11]      The pursuers challenge the defenders’ decisions in respect of both the knee implant and the hip implant contracts.  In seeking a debate in this case, however, the defenders acknowledged that the challenge in respect of the knee implant contract could not be resolved without enquiry.  Beginning at article 14 of the condescendence, the pursuers contend that the award of the hip implant contract to Stryker was unlawful.  They aver that, after the defenders announced that Stryker was the winning bidder for orthopaedic hip products, Zimmer Limited (“Zimmer”) brought proceedings in the Court of Session, challenging the decision of 9 October 2013.  By letter, dated 20 January 2014, the defenders withdrew their decision of 9 October 2013, and issued a decision letter, dated 20 January 2014 (“the January decision").  In the January decision, the defenders informed Zimmer that its tender had been unsuccessful and that Stryker was the winning tenderer.  In making that decision, the defenders relied on parts of the procurement process that led up to the withdrawn October decision.  The January decision was not intimated to the pursuers and they were unaware that the decision of 9 October 2013 had been withdrawn. 

[12]      The pursuers further aver that the defenders’ decisions, dated 9 October 2013 and 20 January 2014, and their subsequent award on or about 4 July 2014 to Stryker of a call‑off contract for the supply of orthopaedic hip products, are unlawful, because the defenders are in breach of their obligations to the pursuers under “Community law”.  In particular, the defenders are in breach of the obligations incumbent on them by virtue of the Community law principles of equal treatment, non-discrimination and transparency, arising under article 2 of Council Directive 2004/18/EC and under Regulation 4(3) of the 2006 Regulations, for four reasons which they proceed to aver. 

[13]      First, the tender documents did not specify how the defenders would decide on which of the three options it would choose.  Despite being requested to do so, the defenders have not provided any further information on how they decided which option to choose.  Each of the three options was scored separately.  The scores spreadsheet prepared by the defenders shows that the pursuers gained the highest score for the combined hip and knee award in addition to the highest score for the individual knee award.  When comparing like-for-like, the pursuers’ combined offering was not only the highest scoring of the combined bids, but was the most economically advantageous tender submitted, out of all of the possible options.  On that basis alone, the pursuers should have been awarded the combined contract for hip and knee products.  No standstill letter has been issued by the defenders in respect of their decision not to award the combined contract for hip and knee products to the pursuers, despite the pursuers’ combined tender being the most economically advantageous.  The defenders did not issue scoring in relation to the combined tender, until 6 August 2014.  The pursuers did not know that the defenders had scored bids jointly, until they reviewed the defenders’ tender evaluation files on or around 12 August 2014.  Despite being requested to provide the pursuers with their reasons as to why their combined bid was not accepted, the defenders have failed to do so.  In the absence of any such information, reason or criterion for choosing among the three options, the defenders have not complied with their duties of transparency and equal treatment and the duty to give reasons. 

[14]      Second, although there are separate framework agreements for hip and knee products, the mini‑competition was run as a single process, with a combined assessment involving consultants with specialisms in hips and/or knees.  There was also a single presentation for hip and knee products.  The single unified nature of the procurement process was emphasised by the option of awarding a single combined contract in respect of both hip and knee products.  If the procurement process was not a single unified process, no such combined award could have been made.  In such circumstances, if there were legitimate concerns regarding the knee products contract, the only lawful option open to the defenders was to abandon the whole of the unified procurement process.  Accordingly, as the mini-competition was a single unified process, if Zimmer’s legal challenges were “not wholly unmeritorious” as is now averred by the defenders, the defenders required to abandon the whole of the unified procurement process as the process relating to hip and knee products would both be equally tainted by any unlawfulness identified by Zimmer.  However, the defenders made a decision to abandon part only of the procurement process, which has resulted in their making an award which was not one of the three options contemplated in the tender documents for the mini-competition.  The decision of the defenders to abandon part of a unified procurement process on the basis of a challenge from a losing bidder casts doubt on the integrity and validity of the whole process, and is a breach of the Community law principles of equal treatment, non-discrimination and transparency. 

[15]      Third, there are “obvious and manifest errors” in the scoring of the pursuers’ tender.  That has resulted in the pursuers not being treated on an equal basis with all other tenderers.  These errors are “fully set out” in the schedule to the summons.  The errors in the scoring of the pursuers’ tender are a breach of the Community law principles of equal treatment, non‑discrimination and transparency. 

[16]      Fourth, the January 2014 decision purports to rely on parts only of the orthopaedic hip implant procurement process which led to the October 2013 decision.  The defenders were not entitled to issue the January decision and withdraw the October decision, without having abandoned the orthopaedic hip implant process leading up to the October decision, and recommencing the mini-tender procedure for the orthopaedic hip products from the start.  As a matter of fact, there had been an orthopaedic hip implant procurement process leading up to the January decision that ran from the invitation to tender of 12 July 2013.  It was not open to the defenders to pick and choose between parts of the orthopaedic hip implant mini‑tender process which it had carried out.  The orthopaedic hip implant procurement process requires to be viewed as a whole.  The whole process relating to the procurement of orthopaedic hip products was vitiated by irregularities.  The pursuers then aver the sequence of events, from 9 September 2013, involving Stryker, which is narrated as agreed between the parties in paragraph [6] of this opinion.  It is averred that the October decision was made on the basis of Stryker’s re‑pricing.  The framework agreement and specification made no provision for additional re-pricing opportunities or preferred bidder status.  On the contrary, it provided in G2 that the contract price would be as per the financial schedule, document 7, as submitted by the tenderer, and in B4 that variants were not permissible.  These failures undermined the whole orthopaedic hip implant procurement process.  One tenderer, Stryker, was given favourable treatment.  The January 2014 decisions purported to award the contract to the tenderer already afforded favourable treatment.  Neither the specification nor the framework agreement contain procedural provisions permitting the defenders to withdraw and re-make decisions.

 

Relevancy
Submissions for the defenders
[17]      Mr Currie QC, who appeared for the defenders, invited me: to sustain their first and second pleas‑in‑law, the second being a general plea to the relevancy, and the first being a plea of time‑bar; to repel the pursuers’ second and fifth pleas-in-law, the second being a challenge to the lawfulness of the award made on 4 July 2014, and the fifth being a plea to the relevancy of the defenders’ time-bar case, and to exclude articles 14 to 20 of the condescendence from probation; and to dismiss the third conclusion, which seeks an ineffectiveness order, in terms of regulation 47B of the 2006 Regulations, in respect of the award to Stryker of a call‑off contract for the supply of orthopaedic hip products. 

[18]      Counsel invited the court’s attention to what he described as the relevant statutory framework, to be found in the 2006 and 2012 Regulations, and to a number of authorities where, he contended, the relevant general principles are summarised.  These authorities are:  Healthcare at Home Ltd v The Common Services Agency [2012] CSOH 75;  2013 SC 411; and 2104 SC (UKSC) 247 (“Healthcare at Home”);  and Hastings & Co (Insolvency) Ltd [2013] CSOH 55 (“Hastings”).  Mr Currie said, however, that he did not take issue with the propositions in law which the pursuers set out in their note of argument.

[19]      Counsel narrated the factual background to the dispute, by reference to the pleadings and certain of the documentary productions.  Number 6/10 of process is the defenders’ invitation to tender, dated 12 July 2013, which comprises a number of documents.  Document 3 contains the terms of offer.  Document 4, which is headed “Terms and Conditions of Contract”, provides that the process and any subsequent award were covered by the terms and conditions of contract for the framework contracts.  The fifth document is headed “Information to Tenderers”, and makes provision for such things as the contract price and the invoicing mechanism.  At documents 6 and 6a, reference is made to the specification and the award criteria respectively. 

[20]      Described by counsel as the most important of these documents, the defenders’ specification is produced at number 6/11 of process, and the award criteria are number 6/2 of process.  The three options for award, as set out earlier in this opinion, are to be found at section G.1 in number 6/11.  It can be seen from the terms of the award criteria how tenders were to be scored.  The criteria set out at page 2 are “Clinical” and “Financial”, each scoring 50%.  On the succeeding pages is a breakdown of the clinical criteria. 

[21]      In section H, at H.2, the following text appears:

“H.2 – Scoring Methodology

 

All bidders who pass the mandatory requirements and provide a compliant bid will be scored based on the award criteria indicated above.  Scores will be calculated using the following methodologies and then added together to produce a score out of 100.  

 

The tender that receives the highest score will be deemed the Most Economically Advantageous Tender.  Should NHS GG&C decide to award the contract, we will award it to the Most Economically Advantageous Tender.  Please note, NHS GGC is under no obligation to award the contract to any bidder. 

 

H.2.1 – Commercial Scoring Methodology

 

The bidder offering the most competitive price will receive full marks.  All other bidders will be scored relative to the most competitive price based on the following formula:

 

(Most Competitive Price / Bidder Price ) x Award Criteria Weighting

 

H.2.2 – Other Scoring Methodology

All other areas of (…) each response requiring a score will be awarded a mark from zero (0) to five (5)”  (The quote is accurate.)

 

[22]      Turning to the 2006 Regulations, Mr Currie observed that regulation 30 is headed “Criteria for the award of a public contract”.  Regulation 30(1) provides that, subject to certain provisions which are not relevant to the circumstances of this case, a contracting authority shall award a public contract on the basis of the offer which (a) is the most economically advantageous from the point of view of the contracting authority or (b) offers the lowest price.  Regulation 30(2) of the 2006 Regulations requires the contracting authority to use criteria linked to the subject matter of the contract to determine that an offer is the most economically advantageous.  Subparagraph (3) of regulation 30 provides that, where a contracting authority intends to award a public contract on the basis of the offer which is the most economically advantageous, it shall state the weighting which it gives to each of the criteria chosen in the contract notice or in the contract documents. 

[23]      Counsel submitted that, having regard to the terms of number 6/2 of process, it is clear that the defenders decided that, in this case, they would award the contract for hip and/or knee products on the basis of the offer which was the most economically advantageous from their point of view and that the award criteria complied with regulation 30(2). 

[24]      Mr Currie then looked at section C of the clinical element of the award criteria, “Requirements for All Products”, noticing that it provides for a score of up to 10% of the total.  Section D, which is “Product Specific Requirements”, is given 30%.  The final 10% of the clinical criteria may be given for “Presentation”.  The key point, said counsel, is that it is plain from a consideration of number 6/2 of process and from regulation 30 that the defenders adopted the criteria set out in regulations 30(1)(a), and 30(3).

[25]      Number 6/14 of process is the defenders’ letter to the pursuers of 9 October 2013, of which the first paragraph reads as follows:

“Thank you for your tender for the provision of orthopaedic hip implants.  We have now completed our evaluation of all the tenders received for this contract and, on behalf of NHS Greater Glasgow and Clyde, I must inform you that on this occasion your tender has not been successful.  The table attached as appendix 1 shows the individual scores given against the published criteria in respect of your submission and those of the winning tenderer Stryker.”

 

On the second page of that letter, appendix 1 is headed “Evaluation of the tender bids submitted”, and the text reads as follows:

“The decision was to award the contract to the following supplier: Stryker

 

The attached table shows the individual scores given against the published criteria in respect of your submission and those of Stryker.”

 

The table on the third page of the letter shows that Stryker’s total score on the evaluation of its hip implant bid was 83.12%, and that the pursuers’ score was 81.18%.  The scores of both bidders for each of the financial, clinical and presentation criteria are set out.

[26]      Mr Currie submitted that it is “quite clear” from the terms of that letter that, for the purposes of making the hip products award, the defenders compared the score of the highest scorer, Stryker, with that of the pursuers.  What were not being assessed there were the relative merits of combined bids, and that must have been obvious to the pursuers.  Counsel contended that what the defenders did was “quite consistent” with the specification options that separate awards for the hip implant contract and the knee implant contract could be secured by two different bidders, or one bidder could secure both.

[27]      Looking again at page 2 of the letter of 9 October 2013, Mr Currie noted that an explanation is given of the “Characteristics and relative advantages of the successful tender”, and the reasons why the pursuers were unsuccessful are summarised in the following terms:

“Stryker provided detailed response to supplier support questions, indicating a high level of dedicated support.  There was recognition of the scale of this contract, and a thorough implementation plan was provided clearly demonstrating the roll out of the contract across all sites.  Tender response clearly demonstrated that contract will be well supported post implementation.  Stryker received highest overall clinical score.  Products supported by detailed clinical papers, results and registry data showing excellent long term product performance.  Presentation demonstrated good ability of Stryker to support the contract. 

 

Summary of reasons you were unsuccessful

 

A reference to information already possessed by NHS GG&C, or information available on request will not receive any marks.  The tender can only be scored on the information provided within the tender response, and the Invitation to Tender is the request for information, no further requests will be made.  A good implementation plan was submitted; however, more Information of a site specific nature could have increased the marks received.  There was little published data on the highly cross-linked PE cup or Fracture Neck of Femur solution provided.  Relatively poor presentation.”

 

What is apparent, argued counsel, is that the defenders decided to award the hip products contract to Stryker on the basis of the scoring set out on page 3 of 6/14.  They had reserved the right to do so, applying the criteria in regulation 30.

[28]      Mr Currie next addressed the substance of the pursuers’ four grounds of challenge to the award of the hip products contract.  These are set out in articles 16 to 19 of the condescendence and recorded in paragraphs [13] to [16] of this opinion.  In article 16, the pursuers complain that the tender documents did not specify how the defenders would decide on which of the three options it would choose.  They aver that they should have been given the contract for both hips and knees because their combined hip and knee bid was the most economically advantageous tender, being higher than at any other combined score.

 

Article 16 of the condescendence – the defenders’ submissions
[29]      Mr Currie referred to the scores spreadsheet provided to the pursuers by defenders at the pursuers’ request, which is number 6/80 of process.  The first page of the document is entitled “Summary Spreadsheet” and it contains six boxes showing, amongst other things:  the scores given to each bidder in respect of the tenders for the “Sole Hip & Knee Award”, i.e. the combined award; the “Hip Award”; and the “Knee Award”.  In the hip award box, Stryker’s score is shown as 87%.  Comparing that with Stryker’s score shown in the letter number 6/14 of process, which is 83.12%, Mr Currie said that he was content to take the lower figure.  The pursuer’s score is shown to be 81%.  The knee award box records the pursuers’ score as 86%, Zimmer’s as 85%, and then Stryker’s as 74%.  In the box for the combined award, the pursuers are shown to have scored 83%, Zimmer 80% and Stryker 78%.  Adding the pursuer’s hip award score of 81% and their knee award score of 86%, the average score is 83.5%.  Adding Stryker’s score for the hip award, 83.18%, and the pursuer’s score for the knee award, 86%, the total is 169.18, and the average, therefore, is 84.59%.  It can be seen, therefore, said counsel, that the defenders selected the winning bid for the hip award and the winning bid for the knee award, as it was entitled to do.  The result of doing so was that awarding the contract to separate bidders produced a higher average score than awarding the combined hips and knees contract to the pursuers.

[30]      Counsel submitted that, against that background, the pursuers’ complaint, that the tender documents did not specify how the defenders would decide on which of the three options it would choose, is “wholly incorrect” because it is evident from number 6/2 of process, the award criteria, that the defenders had decided to use the criterion of most economically advantageous tender.  That, submitted counsel, is exactly what they did, by choosing the most economically advantageous hip tender and the most economically advantageous knee tender.  The suggestion that what they intended to do and what they did was not specified or adequately explained or transparent, is “self-evidently entirely incorrect”, contended Mr Currie.  The defenders made two things very clear.  First, the criterion to be applied to bids was most economically advantageous and second, the defenders did not bind themselves to give the hips implant award and knees implant award to a single bidder.  They retained the right to “cherry pick”.  For these reasons, the pursuers’ pleadings in article 16 of the condescendence are irrelevant, and should not be admitted to probation.

 

Submissions for the pursuers
[31]      Mr Lindsay QC, who appeared for the pursuers, opened his submissions by adopting his note of argument.  The primary contention in his note is that the defenders’ attack on the relevancy of the pursuers’ averments in articles 16 and 17 of the condescendence raises mixed questions of fact and law which can only be resolved after proof.  The note of argument, however, does not address the defenders’ contentions in respect of articles 18 and 19 because, counsel explained, the only challenge to the relevancy of the pursuers’ pleadings which was advanced in the defenders’ first note of argument concerned only articles 16 and 17. 

 

Article 16 of the condescendence – the pursuers’ submissions
[32]      Counsel invited the court to note that the defenders’ pleadings “do not provide any explanation or reasons as to why they did not choose the pursuers’ combined tender for the knee and hip implant contract.”  It is the pursuers’ contention, having regard to the terms of the defenders’ note of argument, that it is the defenders’ position that they had a complete and absolute unfettered discretion to choose among the three options, “and are not obliged to provide any reasons for not choosing the most economically advantageous tender, being the pursuers’ combined tender for the knees and hips.” 

[33]      Counsel referred to paragraphs (7) to (9) of regulation 19 of the 2006 Regulations, and submitted that the terms of regulation 19(9)(d) are “of particular relevance” in the circumstances of this case.  That sub‑paragraph provides that, where the contracting authority follows the procedure which was followed in this case, it is required to “award each contract to the economic operator which submitted the best tender on the basis of the award criteria specified in the contract documents”.  Mr Lindsay contended that, when the defenders withdrew their awards of 9 October 2013 and issued new awards on 20 January 2014, they did not re‑evaluate and re‑score the joint tenders and did not compare the single tenders with the joint tenders.

[34]      Counsel pointed out that, in article 16, it is averred that, when comparing like‑for‑like, the pursuers’ combined bid was not only the highest scoring of the combined tenders, but was the most economically advantageous tender submitted out of all of the possible options.  In amplification of that averment, Mr Lindsay referred to numbers 6/28 and 6/29 of process.  The former is a letter, dated 22 August 2014, from the pursuers’ solicitors to the defenders’ solicitors, in which the pursuers’ solicitors say that they had deduced from the scores spreadsheet that the pursuers scored just over 83 percent for the combined award.  The letter continues as follows:

“Closer investigation of the commercial scoring for knee components (as part of the combined award) identifies that, despite offering the same pricing for both combined and single award options, our client’s commercial scoring under the combined award has been marked down, possibly as a consequence of a lower price submitted by Stryker for combined hips and knees in a proposed option.  However, this methodology is flawed and an unfair method of scoring the combined bids against the individual bids.  It is not possible to simply evaluate the commercial scores for the combined award against Stryker’s (or any other) score for the individual award as the commercial offerings have not been assessed against one another on a like-for-like basis.  The scores must be assessed against the same benchmark for a fair comparison to be made.  That is, our client offered the same pricing and thus should have received the same score under both award options.”

 

[35]      The pursuers’ solicitors go on to say that, in order to ensure that the pursuers’ tender scoring for the combined award was compared against the individual award to Stryker on a like‑for‑like basis, it was necessary to adjust the pursuers’ knee score under the combined award to bring the commercial element of the score into line with the knee scoring for its individual award offer.  They explain that adjustment in the following passage:

“3.  primary knee (a) cemented knee-femoral component, tibial tray & tibial insert – replace the score of 11.49% (combined award) with 13.16% (individual award) which equates to a total score for combined hips and knees of 84.69%.”

 

[36]      The pursuer’s solicitors claim that, on that basis, the pursuers’ combined tender “was not only the highest scoring of the combined bids, but was the most economically advantageous tender submitted out of all the possible options”.

[37]      Counsel for the defenders did not seek to respond to Mr Lindsay’s submissions on the relevancy of article 16.

 

Article 16 of the condescendence – decision and reasons
[38]      Mr Currie’s position is that the defenders’ tender documentation made it clear that any contract or combination of contracts would be awarded on the most economically advantageous basis.  He submits that the contracts which were awarded in October 2013 and in January 2014 met that criterion.  Consequently, he contends, the awards met the requirement of transparency.  In my opinion, if the factual premise of the defenders’ argument is established, the defenders may succeed on the transparency point.  Mr Lindsay, on the other hand, contends that the contracts which were awarded, when taken together, were not the most economically advantageous option.  The pursuers offer to prove that their combined bid was the most economically advantageous.  If the pursuers do so, they may be able to persuade the court that the necessary transparency was lacking in the process, because the defenders have given no explanation for not having awarded the contract to them.  I am satisfied, therefore, that the averments in article 16 raise a disputed question of fact that can only be resolved after proof.

 

Article 17 of the condescendence – the defenders’ submissions
[39]      The averments in article 17, contended counsel, are “even weaker” than in article 16.  What the pursuers do not aver because, contended counsel, they cannot aver it, is that the scoring of the hip implant tenders was in any way affected by the problems that led the defenders to abandon the award of the knee implant contract under challenge from Zimmer.  Mr Currie contended that there is nothing of any specific nature in article 17 that would entitle the court to infer that “the troubles with the knees process” in any way vitiated the scoring in the hip products award process.  The latter process led to the numbers recorded in 6/14, which are Stryker’s score of 83.12% and the pursuers’ score of 81.18%.  No suggestion is made anywhere in article 17 that could lead the court to infer that there was anything wrong with the way that the hip scoring was conducted as a result of problems with the knee process.

 

Article 17 of the condescendence – the pursuers’ submissions
[40]      Mr Lindsay submitted that the averments in article 17 raise “two material factual disputes” which fall to be resolved by the court after evidence has been led.  The first is a dispute regarding whether or not the mini-competition was a single unified procurement procedure for the award of call‑off contracts for hip and knee products.  The pursuers aver that it was such a procedure.  The defenders aver that it was not, although in pre‑litigation correspondence, dated 22 August 2014, the defenders referred to the procedure as a "co‑joined mini tender exercise".

[41]      Counsel submitted that the issue cannot be determined solely by reference to the framework agreement and the specification.  The terms of these documents are, in any event, consistent with the mini‑competition being a single unified procurement exercise, because they contained the option of awarding a single combined contract in respect of both hip and knee products.  It is now a matter of agreement between the parties that there was a single presentation for hips and knees and there was a combined assessment involving consultants with specialisms in hips and/or knees.  There was a jointly chaired single scoring panel with a single contract reference of GGC0188.  Mr Lindsay argued that it will be necessary to hear evidence regarding the single presentation and combined assessment, before the court can arrive at a conclusion as to whether or not the mini-competition was a single unified procurement exercise for both hip and knee products. 

[42]      Secondly, there is a material factual uncertainty relating to why the defenders abandoned the proposed award of the knee implant contract in favour of the pursuers.  The defenders have repeatedly refused to provide the pursuers with reasons for that decision.  Indeed, argues Mr Lindsay, the defenders' position has materially changed as to why they abandoned this award.  Counsel submitted that the reason for abandoning the award in favour of the pursuers is highly material to the article 17 ground of challenge.  As the pursuers aver, the decision to abandon part of a unified procurement process on the basis of a challenge from a losing bidder casts doubt on the integrity and validity of the whole process and is a breach of the EU law principles of equal treatment, non‑discrimination and transparency.  If Zimmer's legal challenges had merit, as is now averred by the defenders in answer 10, the defenders should have abandoned the whole of the unified procurement process as the process relating to knee and hip products would both be equally tainted by any unlawfulness identified by Zimmer.

[43]      Since the defenders have chosen not to reveal why the knee products contract was abandoned, it is not open to them to complain that the pursuers have failed to aver why flaws in the knee products contract would adversely affect the hip product contract.

[44]      Mr Currie did not seek to respond to Mr Lindsay’s submissions on the relevancy of article 17.

 

Article 17 of the condescendence – decision and reasons
[45]      I am not persuaded that the article 17 case is irrelevant.  It is not possible to hold, at this stage, that, even if the pursuers establish that the mini-competition was a single unified procurement procedure, the pursuers would be bound to fail.  Depending on its detailed findings and, in the context of those, reference to relevant authority, the court may be entitled to the view that abandonment of part only of the process was inconsistent with the requirement of transparency. 

 

Article 18 of the condescendence – the defenders’ submissions
[46]      Moving on to the pursuers’ complaint in article 18 of the condescendence, that there are “obvious and manifest errors in the scoring of the pursuers’ tender”, Mr Currie drew the court’s attention to the defenders’ call on the pursuers, in answer 18, to aver the errors which they contend are “obvious and manifest”.  That call has not been answered, said counsel, and the pursuers continue to rely on the “commentary” set out in the schedule to the summons.  Counsel offered an example of the nature of the alleged errors which the pursuers mention in the schedule, under reference to the scoring of the pursuers’ response to C.3(iv) of the specification, “Please provide… details on how the company will ensure product availability for all sites in the event of a supply chain logistics issue”.  The pursuers note that eight consultants gave a score of 5, with the narrative: “meets all aspects; excellent understanding of need; excellent quality”, and two consultants give a score of 4, with the narrative “meets most aspects; good understanding of need;  high-quality”.  The pursuers’ commentary is in the following terms: “

“2 Consultants appear not to have been provided the same Depuy response as others, or given a copy of the Business Continuity Plan held with GGC, resulting in significantly lower scores.  As these 2 same consultants are also the only ones to also evaluate the Knee Offers, their critical scores have double the effect.”  (The quote is accurate.)

 

Another example of a complaint by the pursuers of “manifest error” is the commentary to be found at the foot of the same page of the schedule as follows:

“Mr (S’s) comment and resultant score appears to contradict the comment and score of other consultants.  It is suggested he has scored data based on an uncemented Cup as it is noted the cemented data is lacking.“

 

[47]      Mr Currie characterised these as “just generalised comments” rather than the identification of manifest errors.  In support of that contention, counsel referred to paragraph 20 of Lord Hodge’s opinion in Healthcare at Home, where his Lordship said this:

“… the contracting authority has a margin of appreciation in relation to matters of judgment or assessment and the court will intervene in those areas only where it has clearly committed an error (Lion Apparel (above) at para 37 and Aquatron Marine v Strathclyde Fire Board [2007] CSOH 185, Lord Carloway at para 82).  This is consistent with the statement by the ECJ that the authority has a broad discretion and that review by the courts must be limited to:

 

‘checking that the rules governing the procedure and the stating of reasons have been complied with; that the facts are correct; and that there has been no manifest error of assessment or misuse of powers.’

 

(Antwerpse Bouwwerken NV v European Commission (Case T-195/08) 10 December 2009, at para 52).”

 

[48]      Counsel contended that, in this case, the court would have to be persuaded that the pursuers, in their pleadings, have identified an area where the defenders have clearly committed an error in scoring, and submitted that if one were to read through the whole schedule it would not be possible to identify anywhere in the scoring where it is clear that the defenders committed a manifest material error.

 

Article 18 of the condescendence – the pursuers’ submissions
[49]      Mr Lindsay said that the pursuers’ commentary contained in the schedule to the summons was intended to be an identification of “manifest errors”.  Counsel contended that it can be seen from the commentary that certain documents were not before the scoring consultants or that the score recorded in some instances was inconsistent with the description of what was seen or not seen by them.  Looking at Mr Currie’s first example, in respect of C.3(iv), Mr Lindsay argued that it disclosed that two consultants were not given the documentation necessary to enable them to score accurately.  Those consultants were scoring both knee and hip product tenders.  Looking at the other entries, it is clear, argued counsel, that not all of the consultants had been provided with all of the documentation.  The disparity between certain of the scores which were given and the summary of what the consultants had seen and what they made of it makes it clear that they misunderstood the task that they were carrying out.  Such disparities were:  critical comments, but a good mark; or a bad mark and positive comments. 

[50]      Asked for an example, Mr Lindsay referred to D.2(iii) in the schedule.  Section D of the specification concerns product specific requirements.  D.2 is headed “Quality Assurance Information”, and what is called for in (iii) are long-term safety data for up to five years.  One of the consultants gives the Stryker bid a score of 5, the highest possible, commenting “Good 5yr data for X3 wear”.  Another consultant, who gives the same bid a score of 3, comments “Evidence for cemented X3 cup lacking”.  It is suggested that the first consultant scored the data based on an uncemented hip cup, whilst the second appears to have been scoring for a cemented cup.  Another example, contended counsel, was at D.1(i).  Tenderers were asked to provide published clinical papers supporting the use of its product.  One consultant gave a score of 5 to Stryker, commenting that no specific evidence was submitted for the unit tracks head.  Another consultant made a similar comment, giving a score of 3.  Counsel contended that a maximum score cannot be justified where not all of the relevant evidence is available.  Mr Lindsay summarised his article 18 case as being that, when the consultants scored a particular item, they did not have all of the documentation that was required and the marks sometimes contradict the comments.

[51]      Counsel for the defenders did not wish to respond to Mr Lindsay’s submissions on the relevancy of article 18.

 

Article 18 of the condescendence – decision and reasons
[52]      Although the pursuers characterise what is set out in the schedule to the summons as “manifest errors” that phrase does not necessarily delineate the boundary between where the court will intervene and where it will not.  Lord Hodge described the contracting authority as having a margin of appreciation “in relation to matters of judgment or assessment” and observed, on the authorities, that “the court will intervene in those areas only where it has clearly committed an error”.  In this case, the pursuers do not challenge the exercise of professional judgment.  On my reading of the schedule, what the pursuers are offering to prove includes the following:  (i) that some scoring consultants were provided with different information from others whilst scoring the same item; that one consultant took a different approach to the scoring of certain responses in the Stryker bid from the approach he took to the same responses in the pursuers’ bid, producing high scores for Stryker and low scores for the pursuers; and that the same consultant gave Stryker the maximum score for items in respect of which evidence was lacking.  Other criticisms of the scoring which are contained in the schedule are clearly based on expert evidence available to the pursuers and are expressed in terms which make it less easy for a lay person to judge whether or not they fall within the contracting authority’s margin of appreciation.  Looking at article 18 in the round, however, it is clear to me that the pursuers are entitled to a proof of their averments.

 

Article 19 of the condescendence – the defenders’ submissions
[53]      In article 19 of the condescendence, the pursuers aver that the defenders were not entitled to issue the January 2014 decision and withdraw the October 2013 decision, without having abandoned the orthopaedic hip products process leading up to the October decision and recommenced the process for the hip products from the start.  Mr Currie explained that Stryker won the competition for the hip products contract.  An employee of the defenders then invited Stryker to consider whether it would be prepared to reduce its tender, which it had agreed to do.  The defenders subsequently concluded that Stryker had been induced to reduce its bid as result of a misrepresentation by their employee and decided that the contract had to be awarded on the basis of Stryker’s tender bid.  Counsel contended that, on that narrative which, he said, the pursuers admit, there was no breach of the principle of equal treatment.  He argued that, in any event, the pursuers make no relevant specific averments to the effect that they were disadvantaged by these events. 

[54]      Regulation 47(1) of the 2006 Regulations provides that the obligation on a contracting authority to comply with the provisions of the regulations is a duty owed to an economic operator.  Paragraph (5) of regulation 47 provides that a breach of the duty owed under paragraph (1) is actionable by any economic operator which, in consequence of the breach, “suffers, or risks suffering, loss or damage.”  Consequently, said Mr Currie, if the pursuers seek to complain about any irregularity in the treatment of Stryker by the defenders, the starting point for them is to aver that, as result of that irregularity, they have suffered, or risk suffering, loss or damage.  Counsel submitted that there is no relevant averment in article 19 to that effect.  For that reason, the pursuers’ averments in article 19 are irrelevant, and should be excluded from probation.

 

Article 19 of the condescendence – the pursuers’ submissions
[55]      Mr Lindsay contended that it is accepted by the defenders that discussions took place between their employee and Stryker, which led to Stryker’s re‑pricing its tender.  The defenders position is that “the slate was effectively wiped clean by their second decision of 20 January 2014”.  In the absence of full disclosure from the defenders of precisely what was taken into account and what was left out of account from the first decision of 9 October 2013, no view can be taken as to the effect on the process of the communings between the defenders and Stryker without evidence being led.  The regulations provide that there can be a challenge to an award where there is a risk of prejudice.  Counsel was asked by the court whether there could be a risk of prejudice if the original bid was accepted, as the defenders maintain, and he replied that there was a lack of transparency.  He was also asked whether, as Mr Currie contended, the pursuers admit that the original bid was accepted and he replied that they do not.  All that they know, said Mr Lindsay, is that a second decision was made in January 2014, but “how we get from the first decision to the second, the pursuers only have the glimmer of an outline.”

[56]      Counsel submitted that the pursuers’ bid appears to have been re-marked between 9 October 2013 and 20 January 2014.  He invited the court to compare the scoring summary in the letter of 9 October 2013, number 6/14 of process, with the scoring summary in the letter of 20 January 2014, number 7/1 of process.  In each of those, a set of scores is shown in a box headed “Stryker” and in another box headed with the pursuers’ trading name.  There are four columns in each box in which the scores are recorded for the financial and clinical elements of the bid, the presentation, and the total of these three scores.  Each column contains nine rows, one for each product type.  Each one of the pursuers’ clinical scores in the January 2014 letter is different from the equivalent score in the October 2013 letter.  Consequently, the total score for each of the product types in the January 2014 letter is different from the equivalent score in the October 2013 letter.  For example, for the product type 1(e), “Fracture neck of femur” the pursuers’ clinical score in the October 2013 letter is shown as 1.88%, with a total of 7.31%.  In the January 2014 letter, the equivalent scores are 1.87% and 7.29%.  The largest difference is for product type 1(b), which is a cemented cup, with a total score of 17.29% in October 2000 and 17.24% in January 2014.  There is no difference between any of the figures in the scoring box for Stryker in the October 2013 letter and those in the January 2014 letter.  There are arithmetical errors in the scoring box for the pursuers in the January 2014 letter which do not appear in the October 2013 letter. 

[57]      In his response, Mr Currie said that he was unaware of the difference between the two scoring summaries, and had not been aware of it until counsel for the pursuers raised it in argument.

 

Article 19 of the condescendence – decision and reasons
[58]      In answer 19 of the defences, it is averred that, following the conduct of the mini‑tender process and the evaluation of the scoring of tenders in the course of that process, the defenders concluded that Stryker had provided the most economically advantageous tender.  That decision having been reached, the defenders determined that they would ask Stryker to consider reducing its tendered price.  As is noted earlier in this opinion, Stryker submitted a revised pricing schedule to the defenders, showing a reduction in the price, on 11 September 2013.  The defenders aver that “the January decision” was based on the tender originally submitted by Stryker and not on the basis of the revised pricing schedule submitted on 11 September 2013.  It is not apparent from the terms of the letter of 20 January 2014 why Stryker’s scores disclosed with that letter are identical to the scores disclosed with the withdrawn letter of 9 October 2013.

[59]      If it is established that Stryker was awarded the hip products contract on the basis of the tender exactly as it was scored prior to re-pricing, without any other procedure having been undertaken, it may be that the 20 January 2014 award will be held to have wiped the slate clean.  The pursuers, however, challenge the award and it cannot be said, at this stage, that the defenders will necessarily successfully resist that challenge.  The pursuers do not admit that the January 2014 award was made on the basis of the original tender.  In the joint minute, they admit only that they were advised by the defenders in the letter of 4 July 2014 that the award “proceeded upon the defenders’ decision dated 9 October 2013”.  (Joint minute, paragraph 22)  The defenders have not produced any documentation to support their position and the discrepancy between pursuers’ bid scores recorded in the two award letters is unexplained.  If the pursuers’ article 19 challenge is well founded, the risk of loss to them is obvious.  For the foregoing reasons, the pursuers are entitled to a proof of their averments in article 19.

 

Ineffectiveness orders
[60]      In article 20 of the condescendence, the pursuers seek an ineffectiveness order, in terms of regulation 47B of the 2006 Regulations, in respect of the award to Stryker.  That could only survive, said Mr Currie, if there were relevant averments in articles 16, 17, 18 or 19.  It follows from what I have said so far that the pursuers’ entitlement to an ineffectiveness order remains a live issue in this case.

 

Time-bar – submissions for the defenders
[61]      Moving onto his time-bar argument, counsel for the defenders drew my attention to the terms of paragraphs (6), (7) and (9) of regulation 47, which provide as follows:

“(6) Proceedings under this Part shall not be brought unless—

 

…

 

(b) the proceedings are brought in accordance with paragraph (7). 

 

(7) For the purposes of paragraph (6)(b), proceedings shall be brought—

 

(a) in the case of proceedings seeking an ineffectiveness order (as defined in regulation 47B)—

(i) where paragraph (9) applies, within 30 days from the relevant date referred to in that paragraph; or

 

…

 

 

(9) For the purposes of paragraph (7)(a)(i), this paragraph applies where—

 

…

 

(b) the contracting authority has by notice in writing informed all tenderers concerned and all candidates concerned (if any) of its decision in relation to the award of the contract or the conclusion of the framework agreement, and the notice includes the information referred to in regulation 32(2)(d), in which case the relevant date is the date of sending of the notice.“

 

Regulation 32(2)(d) is in these terms:

“in the case of an unsuccessful economic operator, a summary of the reasons why the economic operator was unsuccessful;”

 

Where other remedies are being sought, the-time bar provision is to be found in regulation 47(7)(b):

“in any other case, 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.”

 

[62]      Dealing with the ineffectiveness order first, Mr Currie submitted that number 6/14 of process gave the pursuers the reason why their hip implant bid was not successful.  Their score was lower than that of Stryker and, therefore, the time within which it was open to them to seek an ineffectiveness order expired 30 days later.  That was well before the present action was raised.  Even if the letter of 9 October 2013 cannot be relied on, because that decision was withdrawn, the pursuers were advised why they were unsuccessful on 20 January 2014.  Counsel referred to number 7/1 of process which was, effectively, in the same terms as number 6/14, as to why the pursuers’ bid was unsuccessful.  At the latest, therefore, the 30 day period began to run from 20 January 2014.

[63]      Before turning to two further time-bar arguments, Mr Currie invited my attention to the decision in Uniplex (UK) Ltd v NHS Business Services Authority [2010] 2 CMLR 47 (“Uniplex”), in which the European Court of Justice held that the time for bringing proceedings under the Directive should run from the date when a claimant knew, or ought to have known, of the alleged breach of the public procurement rules and not from the date on which the infringement occurred.  At paragraph [30], the court provided the following guidance:

"30 However, the fact that a candidate or tenderer learns that its application or tender has been rejected does not place it in a position effectively to bring proceedings.  Such information is insufficient to enable the candidate or tenderer to establish whether there has been any illegality which might form the subject-matter of proceedings. 

 

31 It is only once a concerned candidate or tenderer has been informed of the reasons for its elimination from the public procurement procedure that it may come to an informed view as to whether there has been an infringement of the applicable provisions and as to the appropriateness of bringing proceedings. 

 

32 It follows that the objective laid down in art.l(l) of Directive 89/665 of guaranteeing effective procedures for review of infringements of the provisions applicable in the field of public procurement can be realised only if the periods laid down for bringing such proceedings start to run only from the date on which the claimant knew, or ought to have known, of the alleged infringement of those provisions (see, to that effect, Universale-Bau). 

 

33 ... 

 

34 ... 

 

35 The answer to the first question accordingly is that art.l(1) of Directive 89/665 requires that the period for bringing proceedings seeking to have an infringement of the public procurement rules established or to obtain damages for the infringement of those rules should start to run from the date on which the claimant knew, or ought to have known, of that infringement.”

 

[64]      With that guidance in mind, counsel submitted that it was perfectly plain from (a) the award criteria number 6/2 of process and (b) the defenders’ letter of 9 October 2013, number 6/14 of process, that the pursuers had all the information that they needed to make the complaint which the pursuers set out in article 16, assuming that it is a good complaint.  The same is true of the complaint about manifest errors of scoring which is contained in article 18 of the condescendence because, in the letter of 9 October 2013, the defenders gave the scoring and said at the end that, if any other information was required, the pursuers should ask for it and, at that point in time, if the pursuers were surprised by and disappointed at the result or the scoring, they could have asked the defenders to provide details of the scoring, which they did subsequently.  Counsel submitted that, on any view, irrespective of relevancy, the pursuers’ complaints in articles 16 and 18 and their request for an ineffectiveness order in article 20 are time-barred.

 

Time-bar – submissions for the pursuers  
[65]      Mr Lindsay submitted that it is clear from the parties' pleadings that two principal legal issues arise.  Firstly, when do the time limits specified in regulation 47(7) start to run?  Secondly, what is required in order to comply with regulation 32(2)(d), which requires an unsuccessful tenderer to be given a summary of the reasons why it was unsuccessful?

[66]      On the first of these questions, counsel referred to the passages in Uniplex which are set out in paragraph [63] of this opinion and contended that, applying the Uniplex principles to the circumstances of this case ”it is clear that this aspect of the pursuers’ action is not time-barred.”  The leading English authority, said counsel, is the decision of the Court of Appeal in Sita UK Ltd v Greater Manchester Waste Disposal Authority [2011] 2 CMLR 32, in which it was held that, when deciding whether an unsuccessful tenderer had sufficient knowledge to bring a claim for infringement of the public procurement rules, the applicable standard was knowledge of facts which clearly indicated, though they did not absolutely prove, an infringement.  These judgments of the European Court of Justice and the Court of Appeal have been followed in Scotland in a number of cases, including:  Clinical Solutions International Ltd v NHS [2012] CSOH 10;  and Nationwide Gritting Services Ltd v Scottish Ministers [2013] CSOH 119.  I was also referred to the European Court of Justice decision in Liimmerzahl GmbH v Freie Hansestadt Bremen [200S] 1 CMLR 19.

[67]      On the notice requirements question, Mr Lindsay relied on the Supreme Court decision in Healthcare at Home.  At paragraph [17] of his speech, Lord Reed provided the following guidance on the provision of reasons;

“[17]    As I have explained, Art 41 of Directive 2004/18 imposes on contracting authorities a duty to inform any unsuccessful candidate, on request, of the reasons for the rejection of his application.  Guidance as to the effect of that duty can be found in the judgment of the Court of First Instance in Strabag Benelux NV v European Council (paras 54-58), where the court stated (para 54) that the obligation imposed by an analogous provision was fulfilled if tenderers were informed of the relative characteristics and advantages of the successful tenderer and the name of the successful tenderer.  The court continued (para 55):

‘[T]he reasoning followed by the authority which adopted the measure must be disclosed in a clear and unequivocal fashion so as, on the one hand, to make the persons concerned aware of the reasons for the measure and thereby enable them to defend their rights and, on the other, to enable the court to exercise its supervisory jurisdiction’.”

 

[68]      Having regard to these dicta, said counsel, the defenders will only have complied with the obligations imposed upon them by regulation 32(2)(d) if the notice given by them:  (i) makes the pursuers aware of the reasons for the measure and thereby enables them to defend their rights;  and (ii) enables this court to exercise its supervisory jurisdiction.  He submitted that the defenders' notice does not satisfy that test.

[69]      Looking first at the right to seek an ineffectiveness order, Mr Lindsay contended that it is not time barred for the following reasons:

(a)        In terms of Regulation 47(7)(a)(ii) of the 2006 Regulations, proceedings seeking an ineffectiveness order shall be brought within six months from the date of the contract being entered into;

(b)        The present proceedings were brought on 4 September 2014 which is within six months from the date of the contract being entered into on or about 4 July 2014;

(c)        The time limit of 30 days specified in regulation 47(7)(a)(i) of the 2006 Regulations does not apply, because the defenders did not provide the pursuers with a notice which complied with the requirements of regulation 47(9)(b) in respect of their decision not to accept the pursuers' combined tender for the hip and knee product contracts, which was the most economically advantageous tender received by the defenders;

(d)       No standstill letter has been issued by the defenders in respect of their decision not to award the combined contract for hip and knee products to the pursuers, despite the pursuers' combined tender being the most economically advantageous;

(e)        The defenders did not issue scoring in relation to the combined tender until 6 August 2014;

(f)        The pursuers did not know that the defenders had not reconsidered and re-scored their combined tender when the defenders withdrew their awards dated 9 October 2013 and made new awards dated 20 January 2014, until they reviewed the defenders’ tender evaluation files on or around 12 August 2014;  and

(g)        The defenders, despite being requested to do so, have failed to provide the pursuers with any reason as to why their combined bid was not accepted.

[70]      Mr Lindsay submitted that, if the legal principles identified in the foregoing authorities are applied to these circumstances, it is clear that the pursuers' right to challenge the defenders' decision to award the hip products and contract to Stryker, on the grounds advanced, is not time barred.

[71]      Having regard to the new decisions which were made by the defenders on 20 January 2014, no notice which complied with the requirements of regulation 32(2)(d) was provided, because the defenders have not advised the pursuers of the criteria used for the reassessment which led to the setting aside of the decision, dated 9 October 2013, and the making of the fresh decision, dated 20 January 2014.

[72]      Further, the defenders' letter of 4 July 2014, which advised the pursuers that the defenders were going to proceed with making an award of the contract for the supply of orthopaedic hip products to Stryker, erroneously stated that this award proceeded on the defenders' decision dated 9 October 2013.  As the defenders' decision dated 9 October 2013 had been set aside by the defenders, the award of this contract to Stryker could not proceed on that basis.  The letter dated 4 July 2014 provided no explanation as to how the decision of 9 October 2013 had been restored.

[73]      It should be noted, said counsel, that the defenders do not contend that the grounds of challenge set out in articles 17 and 19 of condescendence are time barred.  Accordingly, even if the defenders' first plea‑in‑law were to be sustained by the court, the lawfulness of the defenders' decision to award the hip products contract to Stryker would remain an issue to be determined at the proof before answer which has been allowed by the court.

[74]      Mr Lindsay drew the court’s attention to the terms of regulation 47(7)(b) which provides that, in certain circumstances, where proceedings are to be brought promptly and in any event within three months from the date when grounds for the bringing of the proceedings first arose, the court may extend that period where it “considers that there is good reason” for doing so.  Counsel advanced what he submitted was such good reason in the circumstances of this case.

 

Time-bar – decision and reasons
[75]      The provision which is central to the defenders’ contention that the pursuers’ conclusion for an effectiveness order, under the provisions of regulation 47B, is time‑bared, is regulation 32(2)(d).  That requires an unsuccessful economic operator to be given a summary of the reasons why the economic operator was unsuccessful.  The pursuers tendered for three contracts: the hip implant contract; the knee implant contract; and the combined contract.  Taking the 20 January 2014 letters as an example, one of them gave the pursuers a summary of the reasons why they were unsuccessful in the knee products competition.  Reading that together with the other letter, which indicated that Stryker had been successful in the competition for the hip products contract, the pursuers will have known that they were unsuccessful in the combined bid.  But that is all they knew.  They were not given any reason why they failed in the combined bid.  That could easily have been done.  If it was the defenders’ position that a combination of the award to Stryker of the hip products contract and the award to the defenders of the knee products contract would produce the most economically advantageous outcome, they could have said so, even if, as Mr Currie maintained, that was or ought to have been obvious to the pursuers.  But, by leaving it to the pursuers to infer that their combined bid was not the most economically advantageous bid, the defenders failed to give the pursuers a summary of the reasons why the combined bid was not considered to be the most economically advantageous.

[76]      In the case of the failed hip products bid, as has been seen, one of the reasons given was that the Stryker bid achieved a higher score than the pursuers’ bid, and the pursuers were provided with a comparison of the two scores.  The pursuers could, and, in my opinion, should, have been given a similar comparison showing the score achieved by their combined bid and the score achieved by combining the Stryker hip products bid score and the pursuers’ knee products bid score.  As a result of the defenders’ failure to give a summary of their reasons why the pursuers were unsuccessful in the combined bid, the defenders were in breach of the obligation placed on them by regulation 32(2)(b). 

[77]      It follows that paragraph 47(9) and, therefore, sub‑paragraph (7)(a)(i) of the regulations do not apply to the circumstances of this case.  Consequently, the pursuers had six months, from the date of the Stryker contract being entered into, to bring proceedings.  The contract could not have been entered into before 4 July 2014, when the defenders wrote to the pursuers announcing their decision to do so.  These proceedings were, therefore, timeously commenced insofar as the pursuers seek an ineffectiveness order.

[78]      The pursuers contend that time did not begin to run against them in respect of regulation 47(7)(b), the three months requirement, until August 2014, when they received the scores spreadsheet.  At the same time, the defenders sent the pursuers copies of the scoring books of each member of the evaluation panel.  I reject Mr Currie’s submission that time started to run against the pursuers when they received the letter of 9 October 2013, by which they were informed that they had lost the knee products contract to Stryker, and were given the scores.  There was nothing contained within that letter or its enclosures to alert the pursuers to the possibility that mistakes had been made in the scoring process.  They were entitled to proceed on the belief that it had been carried out properly.  Having regard to the authorities which were cited during the course of argument, I am satisfied that it cannot be said that, on receipt of the letter of 9 October, the pursuers could have come to an informed view that there had been an infringement of the applicable provisions and that it was appropriate to bring proceedings.  If the pursuers’ article 18 case is well‑founded, the pursuers neither knew, nor ought to have known before early August 2014, that there were manifest errors in the scoring of their tender.  Consequently the pursuers’ article 18 case is not time‑barred.

 

Disposal
[79]      I shall repel the defenders’ first plea-in-law and allow the parties a proof before answer of their respective averments in articles 16, 17, 18, 19 and 20 of the condescendence and corresponding answers, to be held on 27 September 2016 and the three succeeding days.  I shall appoint the cause to call by order to discuss further procedure, and I shall meantime reserve all questions of expenses.