Matrix-SCM Ltd v London Borough of Newham
| Jurisdiction | England & Wales |
| Judge | Ms Susan Prevezer |
| Judgment Date | 27 September 2011 |
| Neutral Citation | [2011] EWHC 2414 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC11C00051 |
| Date | 27 September 2011 |
[2011] EWHC 2414 (Ch)
Ms Susan Prevezer QC, sitting as a Deputy High Court Judge
Case No: HC11C00051
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Fergus Randolph QC and Oliver Jones (instructed by Nabarro LLP) for the Claimant
Nigel Giffin QC and Ewan West (instructed by Trowers & Hamlins LLP) for the Defendant
Hearing dates: 27 and 28 July 2011
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Ms Susan Prevezer QC, SITTING AS A DEPUTY HIGH COURT JUDGE
Ms Susan Prevezer QC:
Introduction
This is an application by the London Borough of Newham ("Newham") to strike out proceedings issued against it on 11 January 2011 by Matrix-SCM Limited ("Matrix") on the footing that the claims made by Matrix are either time barred or bound to fail in any event. The application is made pursuant to CPR Rule 24.2, alternatively pursuant to CPR 3.4.
The proceedings concern the procurement by Newham of a contract for vendor neutral managed services ("the Contract") that was ultimately awarded to a competitor of Matrix, a company known as Beeline International ("Beeline").
The facts are set out in the Witness Statements of Mr Rashid Patel (the Assistant Head of Human Resources at Newham), Sir Robin Andrew Wales (the Mayor of Newham) and Mr Julian Young (the Chief Executive of Matrix) and can be shortly stated as follows:
a. On 15 December 2009, Newham commenced the procurement of a 5—year contract (with an optional 2-year extension) for the provision of vendor neutral managed services ("the Procurement"). The Procurement was conducted in accordance with the "restricted procedure" pursuant to the Public Contract Regulations 2006 ("the Regulations"), with the Contract to be awarded to the "most economically advantageous tender" (Regulations 4(3) and/or 16 and 47(1) of the Regulations). This involved identifying a range of factors and evaluating the value of the bid by reference to the criteria chosen. The criteria had to be made public and the "most economically advantageous tender" was not simply the lowest bid. The procurement procedure commenced by advertising the procedure on Newham's Electronic Contract and Tendering Resource ("NECTR") and Newham's website, which allowed all bidders to have access to the same tender information, documents and relevant communications at the same time. As at 15 December 2009, Beeline was the incumbent supplier.
b. Bidders for the Contract were required to submit pre-qualification questionnaires ("PQQ") to Newham for assessment by 21 January 2010 and Matrix submitted its PQQ accordingly.
c. On 18 March 2010, bidders that had successfully prequalified, including Matrix and Beeline, were given access to an Invitation to Tender (the "ITT"). The ITT, which was also uploaded onto NECTR, included an Evaluation Model ("the Evaluation Model") that set out the criteria on which Newham would base its decision to award the Contract. In summary, 70% of the marks were to be awarded based on an assessment of quality ("the Quality Element"); 25% of the marks were to be awarded based on price ("the Pricing Element") and 5% of the marks were to be awarded based on savings ("the Savings Element"). The Pricing Element and the Savings Element were separate elements, but formed part of a 30% weighting for price, and the tests in relation to the Pricing and Savings Elements were set out in Section 13.1 of the ITT and Sections 4.1 and 4.2 of the Evaluation Model, which included an example, in tabular form, setting out how three hypothetical bids would be scored in relation to both the Pricing Element and the Savings Element ("the Table"). The covering letter to bidders, sent with the ITT, emphasised that "full details" of the scoring and evaluation methods were contained in the Evaluation Model.
d. Matrix downloaded the tender documentation on 25 and 26 March 2010 and reviewed Section 13 of the ITT, the Pricing Schedule and the Evaluation Model, giving, according to Mr Young, "very close attention" to these documents. (Mr Young's understanding of the documents, which is relevant to the present application, is set out in more detail below).
e. Bids were initially required to be submitted by noon on 26 April 2010. This deadline was subsequently extended to 6 May 2010, following which bidders were then interviewed by Newham. Matrix was interviewed by Newham's Procurement team in mid June 2010.
f. Following a process of evaluation, a decision was made to recommend the award of the Contract to Beeline, and this recommendation was approved by the Council's Mayor on 16 September 2010.
g. On 30 September 2010, Matrix was informed by Newham of the results of the competition and received a letter setting out the scores received by it and its competitors. The letter revealed that Beeline had beaten Matrix by only 0.39%. On 6 October 2010, Matrix received a further letter from Newham stating that there had been a clerical error in the marks awarded to Beeline and that Beeline had in fact won by only 0.14%.
h. On 8 October 2010 Matrix attended a de-briefing session with Newham, and Matrix was provided with a document containing the raw price and savings figures submitted by both Beeline and Matrix ("the Tender Evaluation").
i. On 14 October 2010, Matrix wrote to Newham challenging its decision to award the Contract to Beeline. The initial basis of that challenge was not as is now advanced by Matrix in its Particulars of Claim, and it was not until 26 October 2010 that all the grounds of challenge upon which Matrix now relies were put forward.
j. The parties then engaged in extensive correspondence culminating in an unsuccessful mediation. During this period, Newham agreed not to take any point on limitation from 27 October 2010, reserving its right to contend (as it now does) that Matrix's claim was time barred prior to that date.
k. On 11 January 2011, Matrix issued its claim and its Particulars of Claim were served on 25 January 2011.
l. Newham served its Defence on 21 February 2011, and on 8 April 2011, Newham issued its application to strike out and/or for summary judgment on Matrix's Claim.
Summary of the Parties' Arguments
Matrix's claims against Newham fall, broadly, into three categories:
a. Firstly, it is alleged that Newham failed properly to apply the Pricing Element in the ITT, and used a methodology to calculate the Pricing Element inconsistent with the test set out in the ITT (Paragraphs 56(a) and 62 of Particulars of Claim) ("Ground 1").
b. Secondly, it is alleged that Newham adopted and applied a criterion—the Savings Element—independently of the Pricing Element, which meant that Newham failed to award the Contract to the most economically advantageous tender (Paragraphs 56(b) and 63–64 of the Particulars of Claim) ("Ground 2").
c. Thirdly, it is alleged that Newham gave illegitimate preference to Beeline, as the incumbent supplier, in making its decision to award the Contract to Beeline and therefore failed to assess each tenderer's submission objectively and equally (Paragraphs 56(e) and 69 of the Particulars of Claim) ("Ground 3").
Matrix also claims that the failures identified in (a) and (b) mean that Newham acted inconsistently and failed to act transparently (Paragraphs 65–67 of the Particulars of Claim), and that the manner in which the Pricing Element and Savings Element were to be calculated was not sufficiently clear at the time Matrix submitted its tender, and Newham therefore acted with a lack of clarity and failed to act transparently (Paragraph 68 of the Particulars of Claim). These further claims are in essence alternative legal arguments arising on the same facts relied upon to support Grounds 1 and 2.
Matrix contends that Newham's alleged breach concerning the calculation of the marks for the price factor in the Tender, did not arise until the decision to award the Contract to Beeline was made. In relation to the other breaches (and the price calculation breach if, contrary to Matrix's primary case, it did not arise until the award decision was made), Matrix contends that a reasonable tenderer in Matrix's position could not have known of Newham's infringements at the time the tender documents were provided to Matrix. Those infringements, Matrix alleges, only became reasonably clear once Newham had disclosed the relevant data contained in the Tender Evaluation on 8 October 2010, and Matrix had an opportunity to consider that document. If however it is wrong in this regard, then Matrix contends that the Court should grant an extension of time pursuant to Regulation 47(7)(b) of the Regulations and that as the Application is for summary judgment/strike out, the question for the Court is only whether Matrix has a real prospect of successfully establishing that it is entitled to such an extension. In relation to Ground 3, Matrix's position, in summary, is that documents recently disclosed by Newham make clear that additional benefits that could be achieved by awarding the Contract to Beeline were wrongly taken into account by Newham during the Procurement, and it can not be said, based on untested bare assertions, that Matrix's claim in this regard is hopeless. Accordingly summary judgment should not be given.
Newham denies any unlawfulness on its part in relation to each and all of the claims. However, for the purposes of the present application, Newham's argument is that even if there were any such unlawfulness as alleged, the claims under Grounds 1 and 2 should be struck out on the footing that they are time barred under Regulation 47(7)(b) of the Regulations. Newham contends that any claims...
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