Croft House Care Ltd v Durham County Council
| Jurisdiction | England & Wales |
| Judgment Date | 27 April 2010 |
| Neutral Citation | [2010] EWHC 909 (TCC) |
| Date | 27 April 2010 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: 9LS30588,NE90043,NE90063 |
[2010] EWHC 909 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Before: The Hon.mr.justice Ramsey
Case No: 9LS30588,NE90043,NE90063
Eric Owen (instructed by Cohen Cramer) for the First Claimant
Sarah Hannaford QC (instructed by Brian Mackenow & Co) for the Second Claimant
Rhodri Williams (instructed by Evershed LLP) for the Third Claimant
Michael Bowsher QC, and Ewan West (instructed by Colette Longbottom Head of Legal and Democratic Services, Durham County Council) for the Defendant
The Hon. Mr. Justice Ramsey:
Introduction
This judgment deals with issues of disclosure and inspection of disclosed documents in proceedings relating to public procurement. The proceedings arise out of a procurement process by Durham County Council (“the Council”) for the award of contracts for the provision of domestic care services which was subject to the Public Contracts Regulations 2006.
Background
The procurement procedure was commenced by a Contract Notice in the Official Journal in October 2008. The Council initially notified the Claimants of the results of the procurement process by letter dated 26 February 2009. Following a challenge by another tenderer, the Council wrote to the parties on 12 May 2009 to say that it was proceeding on the basis set out in an attached document, “Process for Completion of Tender Award”. This changed the basis of the evaluation of the tenders and provided that the interviews would be re-run.
Following these new interviews the Council notified the tenderers of the revised results of the procurement process by letter dated 21 July 2009. As a result the Claimants, who are three of the tenderers, were awarded contracts for no Demand Zones or for fewer Demand Zones than in the letter dated 26 February 2009.
The Claimants allege that there have been breaches of the Public Contracts Regulations 2006 and European law principles and/or that there has been a breach of an implied or tender contract. They seek the suspension of the tender procedure; the setting aside of the Council's decision of 21 July 2009; an order preventing the Council from entering into any contract; an order for the Council to reconsider re-running the tender procedure and/or damages.
The three Claimants each issued proceedings which were commenced in or transferred to the Technology and Construction Court in the Newcastle District Registry. Because the proceedings raised matters of importance relating to Public Procurement which is a field of expertise in the Technology and Construction Court it was decided that it would be appropriate for these proceedings to be case managed and heard by a High Court judge as provided in paragraph 3.7.5 of the TCC Guide.
At the first case management conference on 11 December 2009 the Council sought an expedited hearing and also particular directions concerning the disclosure and inspection of documents. The Council said that disclosure of certain documents would compromise their legitimate commercial and public interests, in particular its ability to re-run the procurement were that to be necessary. They said that disclosure of some material would also compromise the confidentiality of material provided by or relating to third parties, in particular other tenderers who participated in the procurement. The Council therefore proposed that appropriate arrangements should be put in place now to protect the confidentiality of the interests of the Council and third parties throughout the proceedings.
In a witness statement supporting the application Mr Nicholas Whitton, head of commissioning in Adult Well Being and Health at the Council, dealt with the need for an expedited hearing and developed his concerns in relation to disclosure. At paragraphs 47 to 55 he set out those concerns in relation to certain documents relating to the procurement which included not just materials relating to the evaluation and assessment of the Claimants’ own tenders and also the tenders of their competitors, but also the actual bid material submitted by their competitors.
He said that he had “grave concerns in this regard. While I can appreciate that the legal advisers to the claimants may need to see documents as part of preparing their submissions, I am concerned that if these documents (or the relevant confidential parts of them) are seen by their clients, it will have irreversible adverse consequences for any future re-running of the Procurement, should that be necessary. If any confidential documents (or parts of them) are to be shared with the claimants themselves, it seems to me essential that anybody who sees them must be prevented from participating in the preparation of any future tender for any re-running of the Procurement or otherwise conveying that information to those preparing such a tender. This would entail setting up a confidentiality ring of the type which is becoming increasingly typical in litigation between competitors. Such ring would be established for the purposes of this litigation and the more sensitive documents or the more sensitive parts of those documents can only be seen by those within the ring and who have undertaking the obligations which flow from membership of the ring.”
Mr Whitton said that the reason why he attached importance to maintaining the confidentiality of existing bids and their assessment was that there were only a limited number of ways of distinguishing a good domiciliary service provider from a poor one. His view was that, if the Council had to disclose the model answers for interview questions, the method statements for all tenderers and/or the interview panel's notes for all tenderers to the claimants they would know exactly how the Council judges answers to questions on:
(1) Service provision including organisations structure, philosophy, building capacity whist maintaining quality and ensuring continuity of care.
(2) Human resources including recruitment, selection and training of workforce, communication and management issues.
(3) Services to individuals including individual needs are identified and met, delivery of services identified in care plans, dignity in care, safeguarding processes and procedures.
He said that this knowledge would give them a significant advantage against other providers and the Council would not be able to design a selection process which eliminated that advantage. In addition, his view was that “the Council could not find a further series of legitimate areas for distinguishing between tenderers which did not cover those areas. The ability to ask different questions would not be sufficient to eliminate the advantage enjoyed by the claimants. Furthermore if the claimants were to be shown the interview panel's notes for all tenderers and their method statements they would have information about their competitors which would give them an additional advantage. The only way in which the Council could then redress that imbalance would be to release all that information generally as part of a future procurement.”
In those circumstances, he believed that it would be impossible to design and run a process which could make any sensible, rational and defendable selection that distinguished between competitors. He said that “even if the information released only related to successful tenderers, following the re-run interviews, this would be a considerable body of information encompassing 12 bids. That would allow a near perfect understanding of the Council's requirements in all areas making a design and re-run impossible. This would still be true if the new procurement did not involve an interview because of the comprehensive disclosure of the areas for distinguishing between bids.”
He also said that he anticipated that providers who had scored highly in both assessments would not wish their answers to be disclosed to the claimants who are their competitors not just in this exercise, but potentially in other procurements which may be run by other authorities. He thought it highly unlikely that colleagues running procurements in other authorities would not explore the same areas as those which were part of the Council's exercise.
He said that it was “particularly relevant that our original procurement did not seek to distinguish between bidders on price. We sought to establish a variable hourly rate using market testing at the PQQ stage. After that we took price into account only in the sense that providers were asked to assure the Council that they could provide services at the agreed rate. Those officers who designed the procurement were concerned that if price were taken into account as part of the selection process it would be difficult to eliminate the risk that providers would offer a low price that they could not subsequently deliver. In an exercise of this nature it is essential that incoming providers can recruit and retain a workforce that can take over the packages smoothly and provide continuity of service. The officers were also concerned to ensure that smaller firms could compete with larger ones which is difficult where price is a significant distinguishing factor. The guidance on charging for non-residential social care adds a further complication where hourly rates vary and the introduction of personalisation also makes it difficult to have different hourly rates for the same type of service. I remain convinced that these risks would continue for the future and I would therefore not wish to feature price as a substantial distinguishing factor in any future exercise.”
As a result he said he was concerned that if the Council were ordered to disclose...
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