Amey Highways Ltd v West Sussex County Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Stuart-Smith |
| Judgment Date | 30 July 2018 |
| Neutral Citation | [2018] EWHC 1976 (TCC) |
| Date | 30 July 2018 |
| Docket Number | Case No: HT-2018-000078 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2018] EWHC 1976 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
THE HONOURABLE Mr Justice Stuart-Smith
Case No: HT-2018-000078
Mr Parishil Patel QC (instructed by Trowers & Hamlin LLP) for the Claimants
Mr Jason Coppel QC and Mr Joseph Barrett (instructed by Acuity Legal Ltd) for the Defendant
Judgment Approved
Introduction
The Claimant [“Amey”] has brought these proceedings against the Defendant [“the Council”] alleging failures in the Council's procurement of a contract known as “Highways Term Service Contract 2018–2028” [“the Contract”]. The procurement was governed by the Public Contract Regulations 2015 [“the 2015 Regulations”]. The Council decided to award the Contract to Ringway Infrastructure Services Ltd [“Ringway”]. Amey's overall score was assessed to be 85.48, which Ringway bettered by just 0.03. Amey alleges that its score should have been higher than Ringway's and that it should have been awarded the Contract.
Amey's case may be subdivided into two broad categories of attack:
i) Amey alleges that instructions given by the Council on 19 January and/or 2 February 2018 about how it should structure its presentation of certain staff costs were unlawful. It is not in dispute that implementation of the instructions had the effect of reducing the score that Amey's tender would receive in respect of price. I shall describe this category generically as “the Instruction Claims”;
ii) Amey alleges manifest error in the scoring of two criteria and that it should have been awarded a higher score for those criteria. I shall describe this category generically as “the Manifest Error Claims”.
By its Defence, which was served on 30 April 2018, the Council:
i) Alleged that the Instruction Claims are time-barred, but did not otherwise plead a substantive defence: it merely pleaded a bare denial of the substance of the complaints;
ii) Pleaded substantive grounds of defence to the Manifest Error Claims.
The Parties then took the following steps to raise the issues that now fall for resolution:
i) On 9 May 2018 the Council issued an application to strike out those paragraphs of the Particulars of Claim that particularise the Instruction Claims and the Manifest Error Claims. Alternatively the application was for summary judgment on the basis that the Particulars of Claim discloses no reasonable cause of action and/or that Amey has no reasonable prospects of success;
ii) On 23 May 2018 Amey responded by issuing an application for summary judgment on the basis that the Council has no real prospect of defending the claim;
iii) On 8 June 2018 Amey served a document called “Grounds for an Extension of Time” which addressed the Council's contention that the Instruction Claims were time barred;
iv) On 6 July 2018, less than a week before the hearing of these applications on 12 July 2018, the Council issued a further application, this time for permission to amend its Defence to plead substantive defences to the Instruction Claims in place of the bare denials that currently exist.
I shall deal with these issues in the following order:
i) Should the Instruction Claims be struck out because they are time-barred? This issue takes into account Amey's request for an extension of time;
ii) Should summary Judgment be entered for Amey on some or all of the Claims on the basis that the Council has no reasonable prospects of successfully defending them? This issue takes into account the Council's application to amend its Defence.
iii) Should the Manifest Error Claims be struck out or summary judgment entered in respect of them on the basis that they disclose no reasonable grounds for bringing them and/or that the Amey has no reasonable prospects of succeeding in the claims?
Should the Instruction Claims be Struck Out Because they are Time-barred? Or Should Summary Judgment be Entered in Amey's Favour on the Instruction Claims?
The Factual Background
The factual background appears from the documents and is largely non-contentious. The summary below draws heavily on the terms of the Particulars of Claim. It is neither necessary nor possible to resolve any factual disputes on the material that is now available, and I do not attempt to do so.
The Procurement was subject to a competitive dialogue process, involving three stages: first, an Invitation to Submit Outline Solutions; second, a Competitive Dialogue and; third, a Call for Final Tenders [“CFT”].
The Invitation to Tender [“ITT”] divided the tender submission into two sections, quality and cost. The quality submission was worth 40% of the overall score with the cost submission being worth 60%. The ITT set out a table in conventional form that established the marks that were to be awarded for the quality submission, ranging from a score of 0, which was classified as “No response (complete non-compliance)” as defined, to 10, which was classified as “Outstanding Response” as defined.
The cost submission score was subdivided in accordance with a Cost Matrix that is set out below:
Explanatory notes by reference to the stars in the Matrix included: “*Total Costs – i.e. costs plus overheads and profit (including Contracted Savings Cards).”
| Part Weighting | Area Assessed | Evaluation | Max score |
| 60% | |||
| Total Revenue Costs for Years 1 to 2* (including Contracted Savings Cards) | Proportional away from lowest price** | 35 | |
| Total Revenue Costs for Years 3 to 7* (including Contracted Savings Cards) | Proportional away from lowest price** | 25 | |
| Total Capital Costs for Years 1 to 7* (including Contracted Savings Cards) | Proportional away from lowest price** | 25 | |
| Local Office Overheads | Proportional away from lowest price** | 10 | |
| Fee Percentage Cost | Proportional away from lowest price** | 3 | |
| Compensation Event Cost*** | Proportional away from lowest price** | 2 |
Other relevant provisions of the ITT for present purposes were:
i) Paragraph 6.1.1.12 of Schedule 6 (“Notes and Instructions in respect of the Costs Model”) provided:
“All the Costs Models of Schedule 6 must be completed to show all People, Plant and Equipment, Charges and Subcontractor build-ups as well as overhead and profits. The purpose of these documents is to identify specific costs for the contract from a strategic level through to site level.”
ii) Paragraph 11 of Schedule 6 provided:
“ Contractor's Local Office Management Overhead (Turquoise) Tab
The costs related to the local office costs should be shown in the blue cells. People costs should be only those as defined in the Schedule of Cost Components. Please insert the number of people required for each role in the appropriate blue box and provide the broken down cost elements of each line, the rest should self calculate. Only Head Office related staff should be priced in the Fee and all other staff, where the majority of their time is spent on the West Sussex contract is priced within the LMO.”
iii) Paragraph 6.1.3 of the Schedule of Cost Components defined “Contractor” as “the Contractor and not his subcontractors”;
iv) Annex 1 of Schedule 6.1 Costing Data provided that subcontractor costs were not to be paid in the Contractor's Local Office Overhead but instead to be treated as a defined cost;
v) Cells B108 and B210 in the Cost Model (in respect of the discount option in cells C107 and C209) provided that:
“Note – if all works carried out in the local office are on behalf of the Contract then 100% should be entered. If the Tenderer wishes to use the Local Office for other contracts then the Local Office Overheads should be apportioned according to antic …”. (At the hearing it was assumed that the provision would have concluded by referring to the anticipated split between works carried out on behalf of the Contract and for other contracts respectively).
The following points arise:
i) It can immediately be seen that if Local Office Overheads [“LMO”] also fell to be included in either Total Revenue Costs or Total Capital Costs for any of years 1–7, the structure of the ITT's costing model would mean that such costs were brought into the tenderer's submitted pricing twice. There was therefore an incentive for tenderers not to include sums appearing in their Total Costs in the LMO as well. On the documentary evidence it appears that Amey was conscious of the possibility that other tenderers might gain an unfair advantage by wrongly excluding costs from LMO that should have been included there;
ii) The Revenue and Capital Costs in the first three areas were expressly to include actual costs to the tenderer which it wished to pass on to the Council, plus overheads and profit. LMO were not defined in the Matrix as being or including “Total Costs” and were therefore not subject to the same express provision;
iii) The reference to Savings Cards is a reference to the manner in which a tenderer could indicate potential savings from the tendered price. Those savings could be described as “indicative” or, if sufficiently certain that the tenderer was prepared to build them into the Contract price as options for the Council to take up if it wished to do so, “contractualised”.
Amey submitted its final tender on 15 December 2017. Two categories of costs that might otherwise have fallen within the area of LMO were excluded from it. First, Amey claims that the equivalent of 4 full time staff were excluded from LMO and included in the defined Total Costs sections of the tender because they were subcontractor's costs. Second, Amey claims that the equivalent of 4.25 full time employees were not included as costs at all because Amey proposed to cover their costs by...
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