Unsuccessful bidders face the challenge of deciding on limited information whether to bring a procurement claim under time pressure. Specific disclosure may not be the answer. 

Extending time for service of particulars of claim

Unsuccessful bidders in procurement cases have a very short period not only to decide to challenge an award and issue a claim, but also to follow up that claim with fuller particulars of the breaches alleged. In most cases those particulars need to be produced within seven days.

As bidders inevitably have only the information about the award that the purchaser has provided it can be difficult to express a case fully in that time. Normally bidders nonetheless do their best, often expressly stating that they will wish later to amend/expand the claim when more information becomes available.

In Cemex UK Operations Limited v Network Rail Infrastructure Limited [2017] EWHC 2392, Cemex took the approach one step further stating that it was unable to put forward its particulars at all in the timescales and asking for an extension until after further documents had been disclosed to it. The judge considered that Cemex requesting an extension without seeking to put forward its particulars was “embarking on a risky course.”

Cemex also refused to accept delivery of some of the documents it had requested from Network Rail because Network Rail required them to be seen by lawyers only (i.e. not the client’s technical team). In the judge’s view, the lawyers could have accepted the documents and reviewed them. If they had been unable to understand the technical detail they could then have asked for reasonable access for client specialists. The judge considered that refusal to accept such documents and refusal to put forward particulars of the claim seemed to "smack of arrogance."

The short point from this is that any bidder challenging an award will be taking a high risk in not doing its best to put forward particulars of claim within the short timescales. Realistically, such claims may later need to be amended however that is not likely to be a good reason to delay a first attempt. In this case Network Rail agreed to allow Cemex to have three days to file its particulars after the hearing. If it had not done so, it seems entirely possible that the court would not have allowed Cemex’s case to proceed.

Abnormally low tenders

Part of Cemex’s case was based on the difficulty specifically of bringing claims based on a winning bidders’ solution being an “abnormally low tender.” Cemex alleged that the winning bidder's bid was (in its view) impossibly low but was unable to give detailed reasons for the bid being undeliverable at that level without sight of the terms of the winning bid itself. Cemex alleged that this was a particular catch-22 situation because the knowledge of the reasons for breach depended entirely on another party’s bid and consequently were uniquely unavailable to a challenger. Coulson J did not accept this. He recognised the difficulties for challengers in procurement cases in general (due to asymmetry of information) but did not consider that cases of this sort are different from other procurement challenges.

This leaves a practical question open of how much a bidder will ever be able to plead in relation to abnormally low tenders. Without sight of the winning bidder's justifications for its price, there may be an element of losing bidders needing to bring claims without full visibility of their chances of success. In such circumstances bidders will presumably need to be ready to withdraw claims at a later date if good explanations become available. This does however remain true for all procurement claims – not just those based on abnormally low tenders.

Early disclosure, confidentiality and the role of winning bidders

The case also dealt with matters of document disclosure, confidentiality and the role of winning bidders.

Following the TCC procurement guide issued in 2017, it is now largely accepted that a winning bidder can (and in some cases should) seek to participate in court hearings as an interested party. This case confirms that arrangement which can now be taken as available to a winning bidder if it wishes to take it.

The case law on scope and timings of disclosure has also developed significantly recently. It appears clear that the courts will allow early disclosure of documents which are necessary for a party to advance its case but will be astute about preventing the scope of such disclosure expanding to a point where it amounts to ‘fishing.’

Relevant evaluation documents are likely to be available, but not wholesale suites of bid material (particularly where it is confidential). Clearly, as in this case, disclosure will only be available in respect of breaches which have been raised and not more generally as a way of reviewing everything which has happened. In most cases it appears to be fact-specific precisely what scope of documents will be ordered to be disclosed early.

Many such disclosure exercises will touch on confidential information – often principally concerning the winning bidder’s solution. In this case, the request for disclosure included the winning bidder’s confidential technical bid. These documents would normally be disclosed into a confidentiality ring, limiting who could see the documents. However, Cemex was not happy that the proposed confidentiality ring into which the documents would be disclosed was lawyer-only. Instead, Cemex wanted the documents disclosed to two consultants who had not agreed to sign undertakings limiting their future involvement in similar procurement competitions.

Coulson J noted that the make-up of a confidentiality ring is a matter for the parties to agree. However, he did not consider it was reasonable for Cemex to refuse to accept service of the documents on the basis that the confidentiality ring was lawyers-only.

Overall, this is a reminder that the recipient does not have a right to demand that individuals be given rights of access to confidential information. The court will exercise a protective role to balance fairness of access and, clearly, will take note of the submissions of interested parties (winning bidders) about the commercial effect of confidential information being provided in disclosure.