Section 198 of the Local Government Regulation 2012
(Qld) requires local governments to prepare and adopt a procurement
policy for purchases of goods and services. Among other things,
this policy must include sound contracting principles,
value for money;
open and effective competition;
the development of competitive local business and
environmental protection; and
However, what does "open and effective
competition" mean? What consequences arise when Council
disregards these values when evaluating tenders?
This issue was explored in the UK case of Woods
Building Services v Milton Keynes Council  EWHC 2011 (TCC).
In that case the United Kingdom High Court determined that manifest
errors in the tender evaluation process resulted in the wrong
tender being accepted.
The Milton Keynes Council conducted a tender process to
undertake asbestos removal and site remediation services. Five
Council's method of evaluating the tenders was to rate them
based upon their compliance with the criteria and overall outcomes.
Although the plaintiff Woods Building Services submitted the
cheapest bid, the bid was only scored 88. In contrast, the ultimate
winner of the project was strongly evaluated on quality aspects and
received a score of 104.
The Court ultimately found that the Council's evaluation
processes were flawed, and awarded damages in favour of Woods
Building Services. Although the Court was reluctant to order
Council to choose WBS as a contractor, it was strongly suggested
that Council redo the procurement process correctly.
What went wrong?
The Court expressed concern with the way the Council applied its
own scoring system in disregard of its procurement policy.
Transparency was a key element in the Council's procurement
policy. Despite this, Council could not provide any notes or
documentation produced during the tender evaluation process. It was
apparent that the decision-makers did not record the reasons behind
Conflicts of Interest
At all times, the Council was aware that one of the persons
involved in the assessment of the tender was a former employee of
the plaintiff. The Court suggested this person should not have been
involved in the evaluation due to a reasonable apprehension of
The Council's procurement policy called for the fair,
equitable and non-discriminatory treatment of tenderers throughout
the tender process. Nonetheless, Council's assessment
demonstrated an apparent preference for the winning bid over that
of WBS, despite being objectively inferior.
The Court was also critical of Council's failure to disclose
all of the assessable criteria in the Request for Tender
documentation. As the tenderers had not been made aware of the
criteria, they could not adequately respond to the procurement
This case provides a number of illustrations of the practical
operation of "sound contracting principles". The purpose
of a procurement policy is to maintain the integrity of the process
and ensure that the public have confidence in Council's
decision making. Although the tender evaluation process will not
always be subject to review in the Courts, Council's reputation
for acting honestly, ethically and fairly is hard won and easily
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The revised Commonwealth Procurement Rules (CPRs) will impact on how Commonwealth agencies manage procurement processes.
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