Ireland: RPS Consulting Engineers Limited v Kildare County Council – Adequacy Of Reasons In Standstill Letters

Last Updated: 6 March 2016
Article by Aaron Boyle

This case involved a challenge by RPS about the adequacy of the reasons given by Kildare County Council (the "Council") in the standstill letter provided to RPS notifying it that it had been unsuccessful in a tender process. In his judgment, Mr Justice Humphreys has drawn a number of fundamental conclusions in relation to the requirements set out in the Procurement Regulations regarding the obligation to give reasons to unsuccessful bidders. This judgment is likely to have a significant impact on the information which contracting authorities are obliged to provide in standstill letters and indeed in response to requests for further information and may impact on when time is deemed to run for the purpose of both valid standstill periods and time limits for procurement challenges more generally. In this respect, this judgment is likely to have far reaching practical consequences for both public authorities and bidders. It would not be surprising if there is an appeal to the Court of Appeal.

RPS Consulting Engineering Limited ("RPS") instituted proceedings against the Council complaining about the inadequacy of the reasons provided by the Council to RPS where RPS was unsuccessful in a tender process. RPS was significantly cheaper than the preferred tenderer but lost out on the qualitative criteria.

In order to understand the judgment, it is useful to get a sense of the reasons that were provided by the Council to RPS in the standstill letter:

  • In response to criterion A1, the reasons provided were as follows "your response to this criterion was of a good standard. However, compared to the successful tenderer, it lacked sufficient specific detail on new studies and reports that would be required going forward."
  • In respect of criterion A2, RPS was told "Your response to this criterion was of a very good standard. However, the successful tenderer provided more relevant and specific experience/lessons learned in recent public works contracts."
  • On Criterion A3, RPS was told "Your response to this criterion was of a good standard. However, the successful tenderer offered a more comprehensive approach to ABP oral hearings and measures to maximise the chance of a successful outcome."
  • The balance of the comments followed in a similar vein, namely that RPS were told whether their response was good, very good or excellent which reflected a scoring methodology which the Council applied to the marking of tenders (this methodology was not disclosed to tenderers as part of the tender documents) and then some reference to why the preferred bidder's tender was considered better than the tender from RPS.

The Court noted that similar commentaries had been provided to the third and fourth placed unsuccessful bidders in this tender process. The Judge was critical of the information provided, describing it variously as "largely content free platitudes" and as "a flimsy and threadbare attempt to explain the decision" and the application of a "bland, anodyne, bureaucratic, uninformative formula".

Mr Justice Humphreys set out the standard to be applied regarding feedback to unsuccessful tender processes as follows:

  • Where the award turns on quantitative criteria such as price, it may be sufficient to give the scores alone in relation to such quantitative criteria.
  • Where the award turns on qualitative criteria, there is a heightened obligation to give reasons, particularly where the unsuccessful tenderer offers a more competitive price. In such situations, scores are not sufficient reasons.
  • Contracting authorities must give reasons as to the relative advantages of the preferred tenderer. That involves a comparison between the preferred tender and the particular unsuccessful tender. There is a legal requirement for a bespoke statement of reasons.
  • While brief statements or succinct comments may be sufficient in particular circumstances, it does not follow that because a statement is succinct it will therefore be sufficient.
  • The contracting authority's comments must be sufficiently precise to enable unsuccessful tenderers to ascertain the matters of fact and law on the basis of which the contracting authority rejected their tender and accepted that of another bidder.
  • In order to set out the characteristics and relative advantages of the successful tender, the contracting authority must at least mention the matters which should have been included in the applicant's tender or the matters contained in the successful tender. The statement of reasons must therefore be sufficiently detailed to explain how the preferred tender was advantageous by reference to particular matters, respects, examples or facts supporting a general assertion of relative advantage.

This is a very useful summation of the standard which contracting authorities are now required to observe in providing feedback to tenderers. In order to satisfy the above test, it would appear that specific facts or examples of where the preferred bidder was better than the unsuccessful bidder will need to be included in all circumstances in standstill letters. Given the level of specificity which the Judge considers is required, this will undoubtedly create an administrative burden for public authorities who are not currently providing this level of information.

Even more fundamentally than affecting the standard or quality of information which must be provided to unsuccessful bidders in a tender process in standstill letters, Mr Justice Humphreys held that contracting authorities are obliged, as a matter of EU law, to respond to requests for additional information from unsuccessful tenderers notwithstanding a valid standstill letter has been issued.

This is a significant departure from current practice where generally the view has been taken that the obligation to provide information up-front in standstill letters as required by Article 2a(2) of the Remedies Directive (89/665/EC and 2007/66/EC) has generally been considered to satisfy also the obligation to provide additional information on request as set out in Article 41(2) of the Procurement Directive (2004/18/EC). It is not clear, based on the judgment, what additional information is required to be provided in circumstances where contracting authorities have already disclosed all relevant information in the standstill letter.

The Judge in this case noted that the Council had not offered to provide a debrief even after the applicable statutory time limit of 30 days had passed. When asked by the Judge why it had not done so, Counsel for the Council stated that there was concern that providing a debrief meeting may have resulted in "restarting the clock" for the applicable statutory time limits. The Judge fundamentally disagreed with this view. The Judge stated that the 30 day limitation period runs from the date of the notification and not from the date of any subsequent dialogue or provision of information to a tenderer.

Similarly, the Judge also stated that the standstill period runs from the date the notification is issued, even if the notification does not include the required level of detail. This may give rise to uncertainty, both from the point of view of an aggrieved bidder and the contracting authorities. The judgment does not consider a defective standstill notice in the context of the 30 day statutory time limit for the issue of proceedings. However, if one follows the logic that a standstill period commences on the date of issue of the notification, then there is some risk that the 30 day statutory time limit may also run from that date.

Finally, the Judge made some obiter comments in relation to suggestions which might be considered by the legislature for amending legislation as follows:

  • that the provisions of scores alone may suffice only where it relates to quantitative matters and not qualitative matters; and

including the obligation to consider specific requests for further information and amending the standstill period so that the standstill period does not commence until after a reasonable time is given to a tenderer to compose a request for further reasons plus the 15 day period to respond to that request plus a further short period to enable an application to the Court. The suggestion is that the standstill period should coincide with the limitation period and both should be set at 30 days.

Comment

This judgment is of critical importance to public authorities and bidders in a number of respects:

  • It sets out a standard of information which contracting authorities are required to provide to unsuccessful tenderers. The level of detail/quality of information required appears to be of a high standard.
  • Stating that contracting authorities are obliged to respond to requests for additional information (even where a valid standstill letter has issued) represents a fundamental change to the manner in which contracting authorities currently conduct tender processes.

Stating that a standstill period runs from the date of notification to an unsuccessful tenderer even where that notification is defective if applied in the context of the 30 day time limit is likely to have a significant impact on unsuccessful bidders and the quality of the information which is available to them when being obliged to institute proceedings within applicable statutory time limits.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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