UK: Technical Specifications - What İf They Exclude Certain Tenderers?

A recent Scottish case considers complex issues that can arise in relation to the drafting of technical specifications. While this was decided at an interim stage so that the issues were not fully considered, it gives some important insight into the issues that can arise in this respect. 

The Scottish National Health Service ("NHS") invited tenders for the supply, installation, maintenance and training of staff for a range of radiotherapy equipment for five cancer centres within NHS Scotland. Elekta challenged the award of the contract on the basis that the technical specifications of the equipment to be supplied under the tender effectively excluded it from bidding. The technical specification required, in effect, that the new equipment be compatible with existing equipment with which the new equipment would have to work.  Elekta argued that this resulted in a closed shop as only the supplier of the existing equipment was able to fully meet the NHS' requirements in this respect. 

The Scottish Court of Session found for the NHS. It held that: 

  • a public body must be entitled to decide what it wants or, to put it another way, it must be entitled to decide upon the functional requirements it wishes to satisfy;
  • the fact that the criteria (i.e. requirements) included in the tender notice can only be met by one tenderer, or a limited range of tenderers, does not of itself contravene the principle of equality; and
  • the inclusion of these criteria can only be considered discriminatory if they cannot be justified objectively having regard to the characteristics of the contract and the needs of the public body. 

The Court considered that NHS had an objective justification for requiring compatibility between the new and existing equipment. 

This illustrates that a public body is free to set its own functional requirements, even if that may result in limiting the number of tenderers who will be able to meet those requirements.    This is likely to be relevant in many ICT procurements and will provide some comfort in respect of similar issues that can arise regarding compatibility / interface requirements.  However, it does show that a public body must be able to objectively justify any functional requirements. It may be beneficial to carefully create an audit trail of such justification when the original decision is made if there is a concern that it may prove contentious in due course.  In this way, the public body can show that it gave the matter careful and due consideration in the first place. 

Care should be taken in formulating the technical specification to ensure they comply with the other detailed rules set out in the procurement legislation.  The specification should afford equal access for tenderers and not create unjustified obstacles to competition.  Unless necessary, the technical specifications should not refer to specific makes, processes or products etc.  If this proves strictly necessary, any such reference should be accompanied by the words "or equivalent" and any equivalent accepted. 

Elekta Limited v The Common Services Agency [2011] CSOH 107

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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