The importance of ensuring that the rules of a public procurement tender process are strictly complied with was highlighted in the recent case of J B Leadbitter & Co Limited v Devon County Council  EWHC 930. There, the High Court rejected Leadbitter’s claim that it had wrongly been excluded from the procurement process because it forgot to attach case summaries to its electronic tender, in circumstances in which there was no facility to attach additional material after the original tender had been submitted. The court noted that it was inevitable that the strict application of the rules could result in the exclusion from consideration of a tender that might otherwise have been successful and the relevant issue was whether the rules had been drawn up and applied in ways that were transparent and ensured equal and non-discriminatory treatment that was proportionate. That had occurred and the Council had been entitled to refuse to consider Leadbitter’s incomplete tender. To read the judgment click here.
Leadbitter v DCC: Leadbitter was one of 25 contractors invited to tender for a four-year framework agreement, under which construction projects might be procured by local authorities and other public bodies in the South West. Inclusion in the agreement would not guarantee the award of any contract, nor did it provide exclusivity to the participants, but in practice it was likely to enhance the prospects of business.
The Invitation to Tender (‘ITT’) and related documents made it clear that:
- The fixed and firm deadline for the submission of tenders was 12 noon on 16 January 2009;
- Tenders had to be submitted electronically to a secure portal. There was no other permitted method of submission. All the main elements of the tender were required to be submitted at this time, including a minimum of four completed case studies to be selected from seven detailed case studies provided with the tender;
- The tender had to be complete to be valid;
- Submission of the tender was a once-only option. No provision was made for a tender to be later changed or added to, so that it could not be loaded piecemeal; and
- If absolutely necessary, supplementary information could be sent before the deadline in hard copy form, but this did not extend to ‘the main elements’ of the tender, which included the case studies, nor to any pricing information. Furthermore, this exception provided only for delivery in a correctly addressed package and did not permit submission by open means such as fax or email.
Leadbitter was ready to submit its tender before the deadline – final amendments to the case studies had been made at 10:28am. Because of a power failure, which prevented another tenderer from submitting its tender by noon, the Devon CC extended the deadline for all tenderers by 3 hours to 15:00 on 16 January 2009. Leadbitter decided to use the extra time to make a final check and finally submitted its tender at 12:05. Fifteen minutes before the deadline, a Leadbitter employee, while reviewing the tender that had already been submitted, realised that the case studies had not been submitted and immediately attempted to submit these through the secure portal, but no addition to the tender already submitted was allowed.
Leadbitter telephoned Devon CC’s helpdesk shortly before 15:00 and finally managed to speak to a principal procurement officer with responsibility for the project at 14:59:30 – the telephone call was concluded after 15:00. The Officer advised that the authority would have to assess the tender received so far – he did not commit the authority to accepting the tender as having been properly submitted. Leadbitter then sent the case studies to DCC by email at 15:26. A few days later, Leadbitter was advised by the DCC that their tender was incomplete and would not be considered.
Leadbitter attempted to argue, unsuccessfully, that DCC had acted in breach of its duty of equality and non-discrimination by: (a) relaxing the requirements for two other tenderers (Apollo and Midas Group) but not for them; and (b) allowing an opportunity to rectify errors after the deadline in tenders that were submitted before the deadline and accepted by the authority, but not allowing the same opportunity to a tenderer whose tender was not accepted as properly submitted.
In relation to the first argument, the court noted that Apollo’s inability to submit its tender had been due to a power failure entirely outside its control and resulted in an extension of the deadline for all tenderers. Those circumstances were objectively very different from the circumstances of Leadbitter’s case. Midas, on the other hand, had been unsure whether they had correctly uploaded their case studies and had sought an assurance that they had been received. DCC advised Midas that they could, if they wished, supply a back up copy by sending it to Devon Procurement Services ‘as per the instructions’ in B2.20 of the ITT. This suggestion was NOT in accordance with the instructions in B2.20, but it was unnecessary to consider whether DCC was bound by that advice because Midas had, in fact, correctly submitted a complete tender via the portal and did not need to rely on delivery of hard copy versions.
While B2.25 of the ITT provided an opportunity after the deadline to rectify errors in tenders that had been submitted before the deadline, and accepted by the authority, the fact that no such opportunity was given to a tenderer whose tender was not accepted as properly submitted was held by the court to be irrelevant, because the claimant’s tender could not be described as containing an error. Rather, it was substantially incomplete by reason of the omission of the case studies. Furthermore, the fact that DCC ‘denied itself the opportunity of considering a bid which had at least a serious prospect of meeting the award criteria’ did not mean that the procurement process, which required identification of the most economically advantageous tenderer, was either procedurally unfair or unfair in substance.
The court noted that it was inevitable that the application of the rules of a procurement process may exclude consideration of a tender that might otherwise have been successful. The issue was not whether that result followed, but rather whether the rules were drawn and applied in ways that were transparent, ensured equal and non-discriminatory treatment and were proportionate (the court noted that ‘the principle of proportionality is capable of applying to the implementation of the terms of a procurement process). For reasons of security, DCC could not, on grounds of proportionality or otherwise, have been required to accept the case studies by email before the deadline. It would NOT generally be appropriate to accept a late tender, having regard to the requirements of transparency and equal treatment. There might be exceptions to that, but this case was not one of those exceptions.
Although Leadbitter’s position might be considered stronger than that of many tenderers who were simply late, nevertheless the DCC had been entitled to reject their tender and was not acting disproportionately in doing so. Fairness to all tenderers, as well as equal treatment and transparency, required the key features of this procurement process to be observed.