Deane Public Works Ltd v Northern Ireland Water Ltd [2009] NICh 8

NIW sought tenders for a sewer replacement project. The prequalification questionnaire (“PQQ”) asked bidders to provide details of projects from within the past 5 years that best demonstrated their ability to undertake the works. When Deane submitted its bid on 27 August 2007, one of the projects it identified related to a project in Enniskillen carried out between November 2001 and April 2002.

NIW told Deane that it had been unsuccessful. In a debrief session, NIW further told Deane that, although it had scored highly on all other sections of the PQQ, it had not received any marks for the Enniskillen project because it fell outside the five year period. Had Dean received marks for this then it would have been successful. In response, Deane said that it had been mistaken and that the final works were not completed until October 2002 and the final account was not paid until October 2003. Therefore the project fell within the five year period. Deane claimed that it had been unfairly excluded from the tender process. This was especially as NIW had sought and obtained clarification from two other companies, who reached the short list.

Given the value of the contract, being £2.5million, the Utilities Contracts Regulations 2006 did not apply. However, NIW said that the tender process was conducted in accordance with public procurement principles. It was also conducted in accordance with guiding principles of the “Government Accounting Northern Ireland” procedures, which include transparency and treating suppliers fairly and with consistency.

The court noted that NIW had put in place “highly formal” arrangement for the tender process. Further Morgan LCJ also held that a contractual relationship had come into existence between NIW and all those who responded to the tender by way of submitting a PQQ. The court therefore considered the nature of the implied contractual obligations to which this relationship gave rise. In short the court concluded that it was appropriate to imply obligations of non-discrimination and equal treatment.

Morgan LCJ then considered the terms of the PQQ. He held that the term “within the last five years” was straightforward and identified a period of five years exactly. Therefore, any project which was completed prior to 29 August 2002 would not count. The key word was completed. In the context, it could not refer to contractual periods where a contractor was no longer on site nor to the defects period. NIW had said that the works were completed when the contractor has finished its work on the site and handed the project back to a client. Indeed, as the court pointed out, this was the approach Deane had taken at the time when the PQQ was compiled. Therefore, the Enniskillen project was completed outside the five year period and NIW had been justified in their decision to exclude any consideration of it.

The court did consider the circumstances of the clarification sought by NIW from the other two contractors. In one case it was clear that the answer given was incorrect (values of £0 had been provided for costs) and the bidder had misunderstood the question. In the second, the bidder had failed to provide a health and safety policy, although it clearly had one. These situations were different from that where the bidder had provided information on an out-of-date project and so there was no unequal treatment of Deane.

There was a difference between cases where the principle of good administration required an employer to exercise its power to obtain clarification (i.e. where clarification was clearly both practically possible and necessary) and the position of Deane here.