Rochdale Metropolitan Borough Council has just announced that it will re-run its procurement procedure for the choice of developer for its 350,000 square feet, £250 million town centre development scheme.
Wilson Bowden was appointed preferred developer in May, but the council faced a challenge to the evaluation process from Sultan Properties. Sultan Properties is the owner of the Wheatsheaf Shopping Centre in Rochdale and had bid for the new opportunity with Ask Developments.
This is not a case of a development agreement being awarded without competition after the European Court case of Auroux v Commune de Roanne. It is a case where a local authority ran a competition under the EU procurement regime and found its evaluation method open to challenge.
The Public Contract Regulations 2006 allows a contracting authority to award a public contract on the basis of the most economically advantageous offer. In such a case it must publish the weighting it gives to each of the criteria used to make the judgement. This may be in the contract notice or the contract documents or, in the case of the competitive dialogue, in the descriptive document. Weightings may be given a range and have maximum and minimum. If it is not possible to establish objective criteria then the criteria must be listed in descending order of importance.
The most economically advantageous contract basis of award is the normal method of award for development agreements. It is mandatory where the competitive dialogue is used.
In the case of Lianakis, the European Court considered the evaluation procedure under the repealed Services Directive, but the principles are equally applicable to the current directives and the 2006 regulations. The court reaffirmed previous case law to the effect that the award criteria should not include criteria linked to the bidders' ability to perform the contract such as experience, qualifications, manpower and equipment. These criteria belong to the earlier stage of bidder qualification.
The court went on to emphasise that the principle of equal treatment and the obligation of transparency means bidders should be made aware of all the elements which bear on the eventual choice of the successful bidder. It followed that sub-criteria developed from the criteria themselves should also be disclosed along with their weightings. It is not acceptable for criteria to be developed after bids are received or without drawing bidder's attention to them in the tender documents.
In the earlier case of ATI EAC and others the court allowed the non disclosure of sub-criteria weightings where they did not alter the award criteria. The weightings did not contain elements which might have affected the bids and were not discriminatory.
In July, a property management company successfully challenged the award of framework contracts where award criteria and weightings were not sufficiently disclosed and where the criteria which were disclosed had not been applied (Lettings International ltd v Newham Borough Council ).
The lessons are clear. Bidding for development projects under the EU procurement regime is a time consuming and costly process. Contracting authorities owe duties to bidders to comply with the regulations. Disputes about the award procedure are likely to increase as the stakes are then at their highest when there is the most to win and the most to lose.