- Event date: 17/11/2021
Partnership & Procurement / News Articles
"Don't go off the rails...." - A case law update (Bechtel Limited V High Speed Two (HS2) Limited)Publish date: 10/03/2021
A short summary of some of the key "takeaways" for local authorities from the most recent high profile procurement litigation, this time featuring the HS2 project. To help ensure your procurements don't go off the rails....
You may have seen in the press recently another high profile procurement challenge, this time regarding the HS2 project. This was a project with a target cost of over £1billion, so an understandably complex project (and complex procurement). I will not go into the details for that reason (!), but thought it would be useful to share some of the key "takeaways" for contracting authorities. The challenge failed and the "authority" (i.e. HS2) successfully defended the claim.
Whilst not conducted under the PCR, the case reaffirms a few particular points on procurement law more generally. As such, these may be of interest to our members and your local authorities:
- Litigation in procurement is not an appeal of the outcome, rather the court performs a supervisory function. In the absence of "manifest error" and/or a breach of the procurement principles, the Court should not interfere in an evaluation. Authorities are to be afforded a "margin of discretion", and the court will "recognise the competence" of the evaluators to do their job. Manifest error is a "high hurdle" and broadly similar to the domestic legal concept of "irrationality". It is not for the Court to rescore evaluation scores in a procurement challenge by substituting their own view on the scores.
- Guidance for evaluators: The Judge commented on the authority's training slide for evaluators as being "a helpful summary of what is required in evaluation". The "key messages" on the slide are as follows:
- Apply published evaluation methodology and follow your declared process
- Treat all Tenderers in a consistent manner.
- Keep written records of evaluation process.
- Keep full audit trail of changes in scores and reasons for changes.
- Rationale to include all the reasons for the score.
- Devote sufficient time and resources to the evaluation process to make the above possible.
Abnormally low tenders
- Likewise, in the context of abnormally low tenders, it is not the court's function to substitute its own view for that of the contracting authority as to whether a bid is abnormally low.
Rejecting non-compliant bids
- Authorities are perfectly entitled to reject bidders who have submitted non-compliant bids (in this case, like the Rail Franchising Litigation, the challenger had sought to substantially vary the terms so as to change the commercial position in their favour). The tender documents provided for such a rejection being a possibility.
RWIND tenderer test
- The case confirms this is a hypothetical test. What a particular real life bidder understood the documents to mean is of no relevance.
- Whilst the authority won, the Judge criticised the lack of minutes of a meeting between the parties during the procurement, noting this was a breach of the transparency obligation
This is another welcome decision for contracting authorities. Bidders engage in a high risk game, at their own peril, when submitting non-compliant tenders. Particularly so where these represent a material shift in the commercial position. As in the Rail Franchising Litigation, the authority had set out it reserved the right to reject non-complaint bids, it followed that through, and the Court (rightly) saw no reason to intervene. It would have been clear to a RWIND tenderer the potential consequences of submitting a non-compliant bid.
The comments around record keeping are however a reminder for authorities of the importance of this, throughout the procurement process. The comment regarding evaluation training also offers a useful reminder of the importance of having such training, and indeed what the content might cover.
National Lead Officer
Partnership & Procurement Law
Lawyers in Local Government (LLG)
9 March 2021