A recent decision of the Irish High Court has brought debriefing obligations into the spotlight and provided guidance on the scope and extent of a contracting authority’s legal obligations in this important area of procurement.

Background

RPS Consulting Engineers Limited (“RPS”) submitted a tender to Kildare County Council (“KCC”) for abovethreshold engineering consultancy services in relation to the design and delivery of the new Athy southern distributor road.

KCC subsequently notified RPS that they were unsuccessful and provided the name of the successful tenderer, the scores and the purported reasons.

RPS were more competitive than the successful tenderer on price and therefore lost on the qualitative aspects of their bid. The reasons furnished consisted of a repetition of the scores (phrased in terms of “good”, “very good” etc.), and the award criteria and another 16 words, which the Court considered were vague and only made general reference to the manner in which the preferred tender was “more relevant” or “more comprehensive” than RPS.

The Court also reviewed the debriefing letters sent to the other unsuccessful tenderers and noted that the same generic reasons were provided to each of these.

Decision

The Court was extremely critical of the approach taken by KCC to the debriefing exercise and refused to accept that there had been lengthy and detailed consideration of the formulation of the reasons, stating that “given the substantially identical nature of the reasons as between the losing candidates and the elusively vague and slippery, even obfuscatory, nature of the linguistic barricade erected between the reader and an understanding of what specifically was motivating the decision-maker, this seems unlikely, but if it is correct it does not say much for those composing the reasons”. The Court also criticised the uniform and generic nature of the letters that issued to all unsuccessful tenderers and KCC’s refusal to engage with RPS in any meaningful way.

The Court considered the relevant European Directives and the implementing Irish Regulations and determined that the law envisages a “dialogue” between the contracting authority and an

unsuccessful tenderer, which cannot simply be “shut down” by the authority’s determination that its standstill letter is sufficient.

The Court also had regard to:

  • the public policy objective of better administrative decision making and provision of adequate reasons for decisions
  • the European legal principle of transparency
  • the desirability of debriefing as referred to in the Department of Public Expenditure and Reform Circular 10/14: Initiatives to assist SMEs in Public Procurement (16 April 2014)

The Court summarised the legal position as follows:

  1. Where the award turns on quantitative criteria such as price, it may be sufficient to give the scores alone.
  2. Where the award turns on qualitative criteria, there is a heightened obligation to give reasons, especially where the unsuccessful tenderer offered a more competitive price.
  3. The authority must give reasons as to the relative advantages of the preferred tenderer. This requires a comparison of the parties’ tenders and “bespoke” reasons to be given.
  4. A statement of reasons which is succinct may well be sufficient in some circumstances, but not in others. 
  5. The authority’s explanation must be sufficiently precise to enable a tenderer to ascertain the matters of fact and law on the basis of which the contracting authority rejected one offer and accepted another.
  6. When setting out the characteristics and relative advantages of the successful tender, the authority must at least mention the matters which should have been included in the unsuccessful tender or the matters contained in the successful tenders. Thus, the statement of reasons must be sufficiently detailed to explain how the preferred tender was advantageous by reference to particular matters of fact.
  7. An unsuccessful tenderer may request additional information about the reasons for their rejection in writing. That request must be responded to positively unless specific listed exceptions apply.
  8. The Court decided that generic statements that a tender is “good” or ”very good” or which merely repeat the award criteria or scoring indicators are simply not sufficient.

Debrief meetings

The Court did not accept KCC’s reasons for not offering a debrief meeting after the expiry of the 30-day limitation period for initiating legal proceedings. KCC were fearful that any such meeting could re-start the 30-day limitation period again, thus giving the applicant a new right of challenge. The Court did not accept this approach and stated that “hunkering down and saying nothing lest it be used against one” was not an acceptable stance and was contrary to Department of Public Expenditure and Reform guidance (Circular 10/14).

Defective standstill period

Although the Court firmly rejected the adequacy of the standstill letter, it also rejected RPS’ argument that the standstill period could not have expired. The Court held that, on the basis of the need for legal certainty, the standstill period runs even if the notification is non-compliant as to reasons, (save where the notification is quashed, which the Court said would normally only arise if a challenge is initiated within the standstill period itself).

Observations

The requirement to give bespoke reasons to an unsuccessful tenderer builds on the jurisprudence of the European Courts, which establishes the necessity to furnish reasoning in a “clear and unequivocal fashion”. Bland and generic statements which tell unsuccessful tenderers nothing about the merits of the successful tender will not be accepted by the Courts.

The decision casts doubt on what has been a common understanding that a compliant standstill letter is sufficient to discharge a contracting authority’s debriefing obligations. An obligation to enter into a “dialogue”, including potentially a debrief meeting, with an unsuccessful tenderer will be considered by many authorities as an unwelcome development. Authorities may now find it difficult to ascertain when they are legally entitled to draw the line on their dialogue with disgruntled tenderers. It may be difficult to reconcile the Court’s comments on the debrief meeting and on the 30 day limitation period not re-starting with the wording of the Remedies Regulations which state that the limitation period commences when the applicant “knew or ought to have known” of the alleged infringement, particularly when new information only comes to the attention of a tenderer at such a meeting.

The Court was clearly unimpressed with what it considered to be an ”officious and dismissive” approach adopted by KCC in its dealings with RPS. The clear message from the judgment is that contracting authorities have to pay careful attention to the content of standstill letters to ensure they are meaningful for unsuccessful tenderers and following the issue of letters, they will have to carefully manage any further “dialogue” that is requested by tenderers.

Unsuccessful tenderers now have a clearer understanding of what they should expect from a debriefing exercise. However, given the comments regarding the standstill period commencing even when the standstill letter is defective, the need for swift action is now present more than ever.

Please click here for the judgment.