Healthcare at Home Ltd v The Common Services Agency

[2014] UKSC 49

Typically in a procurement challenge, a court has to determine whether the invitation to tender is sufficiently clear to enable tenderers to interpret it in the same way, so ensuring equality of treatment. The application of this standard involves the making of a factual assessment, taking account of all the circumstances of the particular case. In the Irish case of SIAC Construction Ltd v Mayo, where there was a disagreement the court noted that:

...the principle of equal treatment implies an obligation of transparency...More specifically, this means that the award criteria must be formulated, in the contract documents or the contract notice, in such a way as to allow all reasonably well-informed and normally diligent tenderers to interpret them in the same way.”

Here the Supreme Court had to consider a tendering process in respect of the provision of medical services to health authorities. HaH was the existing supplier of the services, but was unsuccessful in a tender for a replacement contract. HaH challenged that decision, saying that the criteria in the invitation to tender were insufficiently clear, and that the reasons given to it for the rejection of its tender were unclear and lacking in detail. HaH said that the evidence of witnesses from an actual tenderer as to their understanding of the tender criteria, far from being irrelevant, helped to establish what the reasonable tenderers would actually have understood, unless it were shown that the witnesses were not reasonably themselves well-informed or normally diligent.

The Supreme Court disagreed. It was unrealistic to require a contracting authority to frame its invitation to tender in such detail that two reasonable people could not reach different views on its interpretation. It was of considerable importance that decisions of the courts on the validity of a tendering process were taken promptly, so that the parties could know, without delay, whether or not the contract was going to proceed. Unless there was a strong reason to suppose that it would cause injustice, such decisions ought to be capable of being taken without oral evidence. A court should approach such cases by placing itself in the position of the reasonably informed tenderer, looking at the matter objectively, not through hearing evidence of what such  a hypothetical tenderer might think. The question of what a reasonably well-informed and normally diligent tenderer might anticipate requires an objective answer. Evidence as to what the tenderers themselves thought the criteria required is, essentially, irrelevant.