UK: Disclosure in Public Procurement Challenges

Last Updated: 9 October 2013
Article by Calum Lamont

For most procurements (other than those either under threshold or for Part B services), the Public Contracts Regulations contain their own mechanism (under Regulation 32) for the communication of relevant comparative information to the tenderer about his bid and that of the winner, to enable him to gain that understanding.

However, it is also the case that the level of information that the contracting authority is willing to provide at that stage (if any) can be extremely varied.

Sometimes it will provide the barest possible minimum of information, leading to the inevitable challenge on the basis that Regulation 32 has not been complied with, and the standstill period has therefore not been engaged. On other occasions, significant information will be supplied, which may in turn open up avenues of enquiry for the losing bidder to ask extra questions, or to request further information or documents.

In view of the strict timescales within which a challenge can be brought (30 days following the 2011 legislation), tenderers will often issue proceedings with little knowledge of how to articulate properly an alleged breach of the Regulations. It is not uncommon for statements of case to be prepared on the basis of a mere suspicion of irregularity, or on the basis of information supplied by a third party (and sometimes even a 'mole' from within the contracting authority itself). In those circumstances, that contractor may face applications for strike out or summary judgment, which, in turn, are defended on the grounds that the authority has not made documents or information available so as to enable the claimant's case to be properly investigated or pleaded.

The net result (and possibly the inevitable result) of the above is applications for disclosure of documents, which since Alstom v Eurostar [2010] EWHC B32 (Ch) have been essentially approached by the Courts in procurement cases as a 'blended' application taking into account principles from the rules in relation to (i) pre-action disclosure and (ii) specific disclosure.

Since Alstom there have been several helpful judgments in the TCC, including Roche Diagnostics Limited v Mid Yorkshire Hospitals NHS Trust [2013] EWHC 933 (TCC) (Coulson J) and Pearson v Minister for the Cabinet [2013] ERWHC 2082 (TCC) (Akenhead J), in which the Court has grappled with both categories of documents that ought to be disclosed by contracting authorities, and the timing of such disclosure. The appropriate principles, which appear now to be generally settled, are summarised by Coulson J in Roche at paragraph 20:

  1. An unsuccessful tenderer who wishes to challenge the evaluation process is in a uniquely difficult position. He knows that he has lost, but the reasons for his failure are within the peculiar knowledge of the public authority. In general terms, therefore, and always subject to issues of proportionality and confidentiality, the challenger ought to be provided promptly with the essential information and documentation relating to the evaluation process actually carried out, so that an informed view can be taken of its fairness and legality.
  2. That this should be the general approach is confirmed by the short time limits imposed by the Regulations on those who wish to challenge the award of public contracts. The start of the relevant period is triggered by the knowledge that the claimant has (or should have) of the potential infringement. As Ramsey J said in Mears Ltd v Leeds City Council [2011] EWHC 40 (QB), "the requirement of knowledge is based on the principle that a tenderer should be in a position to make an informed view as to whether there has been an infringement for which it is appropriate to bring proceedings".
  3. However, notwithstanding that general approach, the court must always consider applications for specific disclosure in procurement cases on their individual merits. In particular, a clear distinction may often be made between those cases where a prima facie case has been made out by the claimant (but further information or documentation is required), and those cases where the unsuccessful tenderer is aggrieved at the result but appears to have little or no grounds for disputing it.
  4. In addition, any request for specific disclosure must be tightly drawn and properly focused. The information/ documentation likely to be the subject of a successful application for early specific disclosure in procurement cases is that which demonstrates how the evaluation was actually performed, and therefore why the claiming party lost. Other material, even if caught by the test of standard disclosure, is unlikely to be so fundamental that it should form the subject of a separate and early disclosure exercise.
  5. Ultimately, applications such as this must be decided by balancing, on the one hand, the claiming party's lack of knowledge of what actually happened (and thus the importance of the prompt provision of all relevant information and documentation relating to that process) with, on the other hand, the need to guard against such an application being used simply as a fishing exercise, designed to shore up a weak claim, which will put the defendant to needless and unnecessary cost.

What is of particular interest to me is principle (a) above, and specifically what might be said to be the genesis of a 'general rule' in relation to disclosure to be expected of a contracting authority, namely: "essential information and documentation relating to the evaluation process actually carried out, so that an informed view can be taken of its fairness and legality".

It is a fundamental principle of the procurement process that competitions are conducted in a fair and transparent manner. One obvious way of determining whether this is the case is by seeing, at the very least, full details of the evaluation process and the winning bid (usually in a confidentiality ring), so that the would-be challenger can determine whether or not the tenderers have been treated equally.

Reviewing the evaluation might also reveal other irregularities that would otherwise go undetected.

But is this really justified? Provided that the Regulation 32 information is sufficient, then why should an authority be interrogated in relation to the procurement in general terms so that a claimant can see whether the process was fairly conducted away from areas of specific complaint?

Further, it is not always the case that a complaining tenderer actually needs to see evaluation documentation or a winning tenderer's bid.

For example, where a decision to disqualify a bid early in the procurement phase is challenged, a review of the winning tender (i.e. post disqualification) is not required.

Or, where a challenge is brought in relation to a specific element of the evaluation process, e.g. quality, why should disclosure of all matters concerning the evaluation of the financial element of that bid and/or of any other tenderers' bids (to the extent that unfair treatment/bias is not alleged) be needed? That would also militate against any kind of 'general rule'.

However, there may well be cases where a wider interrogation is indeed merited. Postulate a scenario where a tenderer advances a prima facie case in relation to a certain part of a tender (thus falling in the apparently 'acceptable' category of applicant identified by Coulson J in ground (c) above), which leads it to harbour further concerns over other areas of the evaluation process.

Such an applicant is unable to articulate a case in relation to those other areas because it is unaware of what has gone on.

It might be said that specific disclosure of a wider category of documents relating to the evaluation process in general (and not simply those relating to identified breaches or complaints) is justified, because the would-be claimant has raised a broader concern of systemic default or unfairness in the process, and investigating that broader concern is permissible in view of the prima facie case advanced with regard to a specific part of the process.

In such circumstances, it might be said to be fair and reasonable for the economic operator to have sight of all evaluation documents and to check whether or not there are any other points that could potentially be taken in the action.

However, the difficulty is in drawing the line. For example, there appears to be nothing to stop a tenderer from pleading breach(es) in the most general of terms in relation to the entire procurement, in order to have sight of all evaluation documents that may or may not reveal a potential cause of action.

Whilst Coulson J's criteria do appear to contain safeguards against this (e.g. by identifying the 'unacceptable' category of applicant in ground (c), and/or by the anti-fishing sentiments of ground (e)), there does seem to me to be a danger that ground (a) above could be abused in an attempt to mount a full scale 'audit' of the procurement, which an aggrieved bidder would say is justified because of a perceived entitlement to reach "an informed view" in relation to the "fairness and legality" of the process.

If that were taken to an extreme, then the situation would arise whereby every tenderer could carry out a full-scale review of the entire process – which one might think was contrary to policy.

Perhaps these fears are unfounded: Coulson J's criteria were applied in Pearson and in that case, it is arguable that a relatively conservative approach was adopted by the Court.

It remains to be seen how the case law develops, but it does seem pretty clear that it will develop incrementally, and contractors' wishes for a court-sanctioned 'shopping list' of documents to be disclosed as a matter of policy by contracting authorities appear to be some way off.

That said, there does seem to be little sustainable objection in principle in disclosing at the very least (i) scoresheets and (ii) the winning bid (subject to confidentiality), particularly if unfair or unequal treatment is alleged in relation to marking.

It is unlikely that this will require disclosure of rafts of documentation, and those documents should already be to hand, so any objections of cost or inconvenience would not appear to be warranted. It may well be that these are the "essential" documents that Coulson J had in mind when formulating ground (a) above.

Any automatic disclosure of wider categories of documents is, in my view at least, unlikely to be justified at an early stage (although this will of course depend on the facts of the case).

At some point, the contractor has to have the courage of his convictions to plead a case (even if it has to reserve its position pending disclosure), and amend at a later date if required.

Substantial one-sided disclosure at an early stage would also lead to an artificial imbalance in favour of the contracting authority at the subsequent application for injunctive relief or to lift the suspension under Regulation 47H, as the contractor would be able to address the Court on the questions of serious issue to be tried and balance of convenience armed with the benefit of a substantial amount of the authority's disclosure, in circumstances where it has not yet had to disclose its own documentation (which may well contain material that is prejudicial to those matters).

In the meantime, the following practical considerations are suggested:

  1. Do not issue scattergun disclosure applications. Prioritise key documents that are truly essential either to enable a case to be pleaded, or to investigate areas of genuine concern;
  2. Think hard about automatically refusing disclosure of evaluation documentation and/or the winning bid, and think even harder about redacting those documents. Whilst there may not be a blanket 'general rule' in relation to specific early disclosure of these documents, it is likely that they will be disclosable at some point, and holding them back may well serve only to raise suspicions of what are, in reality, fairly innocuous documents;
  3. Bear in mind that specific disclosure applications are more often than not contested, yet there may in reality be little or no resistance to the documents sought being handed over by way of standard disclosure.

If that is the case, then claimants should consider whether the documents are really needed prior to standard disclosure, and defendants should consider what prejudice will really be suffered in handing over documents slightly sooner than they would otherwise have to.

At the end of the day, someone will have to pick up the costs of the application.

Finally, there are two further cases to watch out for that I expect will provide additional guidance on the topic of disclosure: Covanta v MWDC (Akenhead J, 2013) and BY Developments v Covent Garden Market Authority (Ramsey J, 2012), both of which concern massive procurement competitions in Merseyside and London respectively.

At the time of writing those judgments are awaiting formal handing down, and readers will of course be updated in the appropriate future edition of KC Construction Update.

www.keatingchambers.com

The articles and papers published by Keating Chambers are for the purpose of raising general awareness of issues and stimulating discussion. The contents must not be relied upon or applied in any given situation. There is no substitute for taking appropriate professional advice.

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