A cautionary note has been sounded in the High Court following the failure by a contracting authority (in this case the Environment Agency) to record and document properly its evaluation and scoring of bids.

Background

The background to the case (Geodesign Barriers Ltd v The Environment Agency [2015] EWHC 1121) was a procurement by the Environment Agency (the "Agency") for temporary flood barriers which took place between October and December 2014. The decision by the Agency to award the contract to Inero AB ("Inero") was subsequently challenged by the incumbent, Geodesign Barriers Ltd ("Geodesign"). The principal ground of challenge was that the Inero bid not comply with the Agency's mandatory performance specification.

Geodesign's challenge, however, faced two significant hurdles. First, it had to demonstrate that the Agency had made a manifest error in accepting Inero's detailed design, without realising that this design did not comply with the Agency's own performance specification. As the judge, Mr Justice Coulson, put it "just how likely is it that the Agency, with all its experience and technical expertise, would accept a tender that did not comply with its own mandatory performance specification?"  Secondly, Geodesign had been ranked sixth out of the eight tenders. Even if Geodesign therefore succeeded in knocking out the Inero bid it would still lose unless it could show that the other bids ranked above it were also non-compliant or should be rejected for other reasons, something the judge described as being"a tall order".

The Agency could therefore be confident that the prospects of Geodesign succeeding in its challenge were not high. However the way that the Agency had documented (or in this case failed to document) its evaluation of bids gave rise to problems that it had not anticipated.

Short comings in the tender evaluation

While the Agency had provided Geodesign with debrief information following the announcement of the award of the contract to Inero, including summary score sheets, Geodesign complained that it had not been provided with information about the evaluation process including Inero's compliance, or otherwise, with the mandatory specification. Geodesign therefore issued an application against the Agency for the specific disclosure of certain categories of documents including all evaluation, technical or other reports prepared by, or on behalf of, the Agency on the outcome of the evaluation of bids and the tender process as a whole. Specific disclosure applications are not uncommon in procurement disputes and the courts have been willing to order disclosure to ensure that bidders are "in a position to make an informed view as to whether there has been an infringement for which it is appropriate to bring proceedings".

The judge's expectation was that the Agency should be able to demonstrate relatively quickly that its evaluation had considered the points raised by Geodesign and how and why the Agency concluded that Inero's tender was compliant. However this did not prove to be the case because of the Agency's tender evaluation material which was described by the judge as "most unsatisfactory".

In particular, no contemporaneous evaluation reports had been prepared by the Agency something the judge found to be "extraordinary" not least because in the judge's experience contracting authorities routinely produce evaluation reports to aid and support the decision making process. Moreover, the absence of such reports gave rise to "a significant question mark as to the transparency and clarity of the procurement exercise"including whether there had been a fair and transparent process. From being in a relatively strong position, the merits of the Agency's case was now less clear. As the judge noted "the fact that (Geodesign's) claim cannot be described as strong on the face of the pleadings is balanced out by the fact that the evaluation process on the documents looks, to put it neutrally, questionable."

Comment

We will have to wait a while to see what view the court comes to on the substantive merits of the dispute as the case is still at a relatively early stage. However, the Agency cannot look forward to the trial with as much confidence as it might otherwise have done given that it must now demonstrate that there was no manifest error in the evaluators' marking of the bids without contemporaneous documents to help evidence and support the decision making process.

The case highlights the importance for contracting authorities to ensure that a clear contemporaneous record exists which documents the decisions taken by evaluators when marking bids including initial assessments of mandatory pass/fail requirements that are often a precursor to more detailed scoring evaluations. A failure to do so could well put the contracting authority at a significant disadvantage if the award decision is subsequently challenged. The provision of information prepared by the contracting authority after the evaluation, and provided to bidders for the purposes of the debrief exercise, is unlikely to be sufficient.

There is one final point for contracting authorities to bear in mind if they face an application for specific disclosure which is that someone at the contracting authority (often the in-house lawyer) will have to give a witness statement to the court explaining what documents exist. While the court will rarely go behind such evidence, the person giving the statement has to be very confident that it accurately reflects the position. If, in the future, documents are discovered which demonstrate that the assurances given were untrue then, as the judge commented, "significant consequences would flow from that". Such consequences could include not just adverse costs orders but, in cases where the court might have been deliberately or recklessly misled, contempt proceedings.