The Importance of Being Transparent in Procurement.

A recent case highlights the need for procurement processes to be carried out in accordance with published criteria and principles of transparency.

The High Court found that the Nuclear Decommissioning Authority (NDA) breached the Public Contracts Regulations 2006 (PCR) when obtaining a contract for the decommissioning of nuclear facilities in the United Kingdom.

EnergySolutions EU Limited v Nuclear Decommissioning Authority [2016] EWHC 1988 considered the procurement of a contract for the decommissioning of nuclear facilities. EnergySolutions (ES) was part of a consortium (RSS) that bid for the contract, but was unsuccessful. ES challenged the award on the basis that there had been ‘manifest errors’ in the evaluation process, and that it should have been awarded the contract. ES did not issue proceedings within the statutory ‘standstill period’. ES was left having to claim damages, rather than seeking to have the tender exercise re-run.

The NDA argued that a failure by ES to issue its claim during the standstill period deprived it of the ability to pursue a claim for damages. The NDA also claimed that, even if the bidder could show that it had suffered loss as a result of a contracting authority’s breaches of duty, damages should be discretionary. The Court of Appeal’s rejection of these arguments is an important decision for unsuccessful bidders thinking of bringing a public procurement challenge.

The bids were evaluated by 3 Subject Matter Experts (SMEs). The court found that there had been manifest errors by those evaluating the bid, and had the bids been evaluated properly, the winning bidder would have been disqualified, under the NDA’s own evaluation criteria. It emerged that NDA personal had discussed the bids which led to score changes after the SMEs had reached their decision. No records of these conversations had been kept.

The key findings of the court showed that;

• The NDA personnel kept no records of the dialogue, and it was difficult to see how consistency was achieved in circumstances where no records were kept of important dialogue which lasted several months.

• One version of the training pack for evaluators stated “As a matter of policy… all other notes pertaining to evaluation must be destroyed … any hard copy notes will be shredded at the end of evaluation.”

• It was found that after the results were adjusted to correct mistakes made by the NDA, the claimant consortium’s score was higher and was therefore the most economically advantageous tender; and that the winning bidder should have been disqualified from the competition.

Key findings:

• Evaluators should be given adequate time to carry out evaluations and sufficient resource should be built into the process.
• Contemporaneous notes should be kept.
• Changes to scores need to be recorded contemporaneously, accurately and explained. Limiting the documentary trail of the process is very unlikely to assist in the defense of a claim.
• Tender requirements should aim not to automatically disqualify bidders for failure to reach certain thresholds.
• Obligations of transparency and equal treatment should be considered at all stages of the process.

The judgment deals only with liability. A hearing to determine quantum of damages is to be heard in November 2017.

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