In a recent judgment, the High Court decided that a contracting entity for the purposes of the public procurement rules was entitled to reject a tender for a framework agreement where part of the tender was submitted 26 minutes late. The Court decided this was neither disproportionate nor was it unequal treatment or discrimination. The judgment gives important guidance on the application of tender rules, particularly timing and also considers the viability of proportionality arguments in procurement challenges.

The tender in question required at least four case studies to be submitted as part of the tender. The invitation to tender (ITT) clearly stated that each tenderer would have only one opportunity to submit documents to the contracting authority's portal (and thereby submit its bid). The tender documentation also clearly stated the remaining tender rules. The claimant submitted its tender before the 15.00h deadline on the relevant date, but before 15.00 it realised it had failed to include the case studies with the rest of its tender. It then attempted to submit the case studies to the portal before 15.00 but was unable to do so as the system only permitted one loading of documents by each tenderer and the claimant was now on its second attempt. The claimant then e-mailed the case studies at 15.26 i.e. 26 minutes after the deadline. The contracting authority (Devon CC) rejected the claimant's tender on the basis that it had not submitted a complete tender by the deadline.

Important points raised by the judgment include:

  • Equal treatment/rectifying errors

    The ITT provided that tenderers would be given an opportunity to rectify errors after the deadline in tenders which were submitted before the deadline and accepted by Devon CC. While the claimant accepted it did not submit its entire tender before the deadline, it argued Devon CC should have waived strict compliance with the ITT and allowed it to correct its error (by submitting the case studies after the deadline so the tender would not be rejected). It argued that not permitting this would constitute unequal treatment and discrimination against it. The Court disagreed. The Court did not find that the failure to include the case studies was an "error" as provided for in the ITT, rather the claimant's tender was substantially incomplete. Its view was that this part of the ITT neither obviated the need to submit a complete tender nor did it provide a means by which tenderers could supply substantial documents or substantial sections of documents after the deadline so as to complete tenders. Devon CC's failure to waive strict compliance with the ITT was applied equally to all tenderers. Indeed, the Court's opinion was that a waiver of terms which are stated as applying without exception carries the very risks of unequal treatment, discrimination and a lack of transparency which the contracting authority is required to avoid.
  • Proportionality

    The claimaint further alleged that as a general principle of European Community law Devon CC owed an obligation to act proportionately in the treatment of the tender and in not doing so it was in breach of this obligation. Proportionality involves an authority (1) acting to suit the purpose of their powers, (2) achieving that purpose by means least burdensome to those affected and (3) imposing burdens that are proportionate to the intended goal.

    The Court found that the principle of proportionality is capable of applying to the implementation of a procurement process (as well as the selection of tender criteria). But the Court made clear that it will not intervene on this point unless the decision is unjustifiable. Authorities have a "margin of appreciation" to act proportionately (unlike for breaches of the equal treatment, non-discrimination and transparency requirements) so that the court will only disturb an authority's decision where it has committed a "manifest error". In this case, the Court found that the ITT could not have been clearer on the requirement for a single upload and submission before the deadline - the implication being that Devon CC's decision to reject the claimant's tender was justifiable and it did not act disproportionately in doing so.
  • Acceptance of late submissions

    The Court noted the lack of clarity in this area. It went on to state that there may be circumstances where proportionality will, exceptionally, require the acceptance of late submission of the whole or significant portions of a tender, most obviously where it results from fault on the part of the procuring authority. But in general, even if there is a discretion to accept late submissions, there is no requirement to do so, particularly where, as in this case, it results from a fault on the part of the tenderer.

Conclusion

Proportionality may provide fertile ground for challenging authorities' selection of tender criteria and their implementation. This is at a time where there are signs of an increasing number of challenges in the UK. This may be a combination of two things. First, short-term financial need outweighing the fear for some of disputing tenders and, second, accelerated public spending on projects that risks breaching procurement rules (although there are reports that this is stuttering in some areas). Expect further cases in this developing area. No one involved in the procurement of public projects can afford to be left behind.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 21/05/2009.