Limits on Transparency obligations for Part B Service Contract - Release Speech Therapy Limited v Health Service Executive
On 18 February 2011, the High Court (McMahon J) dismissed a challenge from an unsuccessful tenderer in relation to a tender competition organised by the Health Service Executive (HSE) for the provision of early intervention diagnostic and treatment speech and language therapy services. The case centred on three issues, namely:-
- whether a failure to specifically state that only providers who were capable of providing group and individual therapy would be considered for the contract constituted a breach of the principle of transparency;
- whether a failure to award marks under the cost criterion in the absence of meeting minimum marks under the technical criteria constituted a breach of the principle of transparency; and
- whether a failure to state the minimum scoring thresholds applicable to the weighted criteria constituted a breach of the principle of transparency.
Speech and language therapy services constitute "health and social services" which fall within Part B of the European Communities (Award of Public Authorities' Contracts) Regulations 2006 (SI No. 329 of 2006). Part B services are not considered to have the same potential for cross-border trade as other types of services and are therefore not subject to the full rigours of the procurement Regulations. Nevertheless, case law from the Court of Justice of the European Union has held that the award of Part B service contracts is subject to fundamental principles including equal treatment and transparency.
The Court noted that the unsuccessful tenderer only provided group therapy services. Expert evidence submitted on behalf of the HSE indicated that the tender documentation clearly specified that a range of services were required in order to provide the tendered services. The Court considered that a reasonably well informed and normally diligent tenderer would have understood from the tender documentation that a tenderer should be in a position to provide both group and individual therapy services to qualify for the contract. Accordingly, the Court held that in respect of the first issue, the principle of transparency had not been breached in the circumstances.
The Court also considered that a failure to award marks under the cost criterion was not significant particularly given the fact that there was only one tenderer in the process. The Court noted that the failure to award marks under the cost criterion did not mean that cost had not been taken into account in the process. Accordingly, there could be no question of a breach of the principle of transparency for failing to award marks under the cost criterion.
Finally, the Court held that the failure to disclose the scoring methodology (which applied minimum scoring thresholds to the weighted criteria) did not breach the principle of transparency. Given that there was no obligation to disclose weightings in advance for Part B service contracts (as most recently confirmed by the Court of Justice in Commission v. Ireland, Case C-226/09), there could be no obligation to disclose the scoring methodology underlying the criteria. The Court noted that the present case did not involve any allegations of an inconsistent application or amendment to the criteria. Moreover, even if the unsuccessful tenderer had been aware of the minimum scoring thresholds, this would not have affected the preparation of its tender as it had indicated to the HSE that its refusal to provide individual therapy services was "non-negotiable".
Release v. HSE demonstrates that there are limits on the scope of the principle of transparency particularly for Part B service contracts. Of most notable significance from a wider procurement perspective is that the High Court has confirmed that there is no obligation to publish minimum scoring thresholds for Part B contract awards unless this scoring methodology would amount to an inconsistent application or change to the published criteria or unless the methodology would make a significant difference to the preparation of tenders.