The Irish High Court has ruled in the case of BAM PPP v National Treasury Management Agency & Minister for Education and Skills [2015 No 176 JR] that the acceptance of a number of tender documents, submitted by a bidder after the deadline for submissions had passed, was lawful.
The NTMA, on behalf of the Minister for Education and Skills, conducted a competition to select a contractor to design, finance, build and maintain new academic buildings for Dublin Institute of Technology on the Grangegorman campus in Dublin. This was a complex tender process, involving the submission of hundreds of tender documents via an electronic portal system. Three bidders participated in the process, including BAM and a consortium known as ‘Eriugena’.
The tender submission deadline was 5pm on 28 November 2014. Two of the bidders, including Eriugena, did not submit all of their documents on time, whereas BAM did. Eriugena submitted 8 (out of 280) documents between 5pm and 6.13pm. The NTMA considered that it had a discretion to accept the late documents and it did accept them. Following evaluation, Eriugena was selected as the preferred tenderer and this was notified to the other bidders. BAM objected to the NTMA accepting Eriugena’s late documents and commenced legal proceedings to have the decision to select Eriugena as the preferred tenderer set aside and seek a declaration that BAM should be the preferred tenderer as it had submitted the only compliant tender.
BAM argued that the contracting authority had no entitlement to accept the late documents and that Eriugena ought to have been eliminated from the competition. BAM’s principal contentions were that the NTMA had misdirected itself and made a manifest error by exercising a discretion that it did not have, and, in the alternative, that any discretion could only be exercised in exceptional circumstances which, BAM claimed, did not exist.
The NTMA argued that it had a clear discretion to accept late documents, including by virtue of the provisions of the Invitation to Negotiate (ITN) and general principles of European procurement law. Having investigated the delay in uploading the documents the NTMA had found that there were technical problems uploading the larger files but that none of the late documents had been modified materially after the 5pm deadline. All but one of the documents contained information that had already been submitted in other documents uploaded prior to the deadline.
The High Court found against BAM on all grounds and its application was dismissed. It was held that the NTMA had a discretion to accept the late tender documents, both according to the terms of the ITN and in ‘exceptional circumstances’ as a matter of law, even where there is no express or implied discretionary power given in the tender documents.
What constitutes ‘exceptional circumstances’ is for the contracting authority to decide and in this it has a wide margin for appreciation. ‘Exceptional circumstances’ would clearly encompass situations of force majeure or power failure, but also other circumstances ‘when viewed objectively, particularly from a tenderer’s perspective’. In this regard the Court considered that the NTMA was entitled to take into account the context of an expensive 31 week tender process and the public interest in progressing the project rather than risking its abandonment (which the NTMA considered a possibility because two of three bidders had submitted late).
It was also held that the NTMA exercised its discretion properly in deciding to accept the documents. The Court considered that the reasons relied upon by the NTMA for exercising its discretion in favour of accepting the late documents were based on relevant considerations and on evidence that was before the NTMA’s decision-makers. It found that the late documents had not been modified after the tender deadline, that the difficulties in submitting on time were not wholly within Erigena’s control and that the authority had conducted appropriate investigations and taken legal advice. The Court also found that the decision to accept the late documents did not infringe the general principles of non-discrimination, equal treatment, transparency and proportionality. In fact the Court remarked that the principle of proportionality may impose a duty on the contracting authority to exercise a discretion to allow late filing or to seek clarification where there is ambiguity.
Nothing in the Procurement Directive 2004/18 or the Procurement Regulations 2006 prohibits a contracting authority from including in the tender documents terms which confer a discretion to waive a deadline and accept late tenders or excludes the existence of such a power under general law. There is no authority for the view that a tender deadline is immutable or can never be extended; rather the case law of the EU indicates that authorities must apply the general principles of procurement when considering whether to accept late or omitted documents or when availing of any similar discretion afforded to it by the tender rules.
On whether fault on the part of the tenderer has any bearing on the issue, the Court found that provided there is no clear or identifiable fault on the part of a tenderer, the authority is entitled to exercise its discretion in favour of the tenderer if it is satisfied that there are ‘decisive elements’ which were outside of its control. The Court found that fault could not be attributed to the NTMA or Erigena in this case.
This is a significant case and the first in Ireland to consider in any detail the issue of late tenders. It underlines for contracting authorities the importance of having robust tender documentation and having discretion to waive procedural requirements in certain circumstances. It also highlights the need to carry out appropriate investigations, consider all available evidence and take legal advice before exercising any discretion and documenting key decisions made during the process.