Woods Building Services v Milton Keynes Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Coulson |
| Judgment Date | 14 July 2015 |
| Neutral Citation | [2015] EWHC 2011 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2015-000058 |
| Date | 14 July 2015 |
[2015] EWHC 2011 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Coulson
Case No: HT-2015-000058
Mr Joseph Barrett (instructed by Salvus Law Ltd) for the Claimant
Ms Ligia Osepciu (instructed by Freeths LLP) for the Defendant
Hearing Dates: 16, 17, 18 June 2015
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.
INTRODUCTION
This is a procurement dispute arising out of a tender process undertaken by the defendant ("the Council") for the award of a framework agreement for asbestos removal. A contractor was sought to provide asbestos removal and re-instatement services pursuant to an £8 million, 4 year, single-supplier contract. The claimant ("Woods") currently provides asbestos-removal services to the Council. Of the five submitted tenders, Woods' was the cheapest. However, they lost out to European Asbestos Services ("EAS") as a result of the Council's evaluation of the quality criteria in the tenders. Given that the scoring was weighted 60/40 in favour of price over quality, this meant that, on the Council's evaluation, EAS significantly out-scored Woods on the quality aspects of their respective tenders.
Woods say that the tender evaluation process was unfair. They point to the unusual way in which it was carried out, and the almost complete absence of any contemporaneous records arising out of the Council's evaluation process. They also complain that, because the EAS tender was prepared by a former employee of Woods, the EAS tender included passages which had been lifted directly from the Woods library of tender responses.
At root, however, this is really a claim about the specific scores awarded to EAS and Woods during that tender evaluation process. Woods submit that the evidence demonstrates a lack of transparency and a failure to treat the tenderers equally. In addition, they say that manifest errors are apparent in the scores awarded. They say that, in consequence of these defaults, the tender evaluation was fundamentally flawed and that, had it been properly carried out, it would have been their tender that would have been accepted.
I deal with the relevant law in Section 2. Thereafter I set out the background facts in Section 3. I identify the issues in Section 4. Then in Section 5 I set out my general observations before, in Section 6 dealing, one by one, with the tender evaluation of the answers provided by EAS and Woods to the twelve relevant questions. I deal with the separate issue of plagiarism in Section 7. In Section 8 I address briefly the issue as to whether, given my findings, a different score would have eventuated. There is a summary of my conclusions in Section 9. I am grateful to both counsel for their assistance.
THE LAW
Transparency
In this case, the duty of transparency focused on the award criteria. It is trite law that "the award criteria must be formulated, in the contract documents or the contract notice, in such a way as to allow all reasonably well-informed and diligent tenderers to interpret them in the same way": see SIAC Construction Ltd v County Council of the County of Mayo [2001] ECR1–7725, at paragraph 41.
The award criteria must be drawn up "in a clear, precise and unequivocal manner in the notice or contract documents so that first, all reasonably informed tenderers exercising care can understand their exact significance and interpret them in the same way and, secondly, the contracting authority is able to ascertain whether the tenders submitted satisfy that criteria applying to the relevant contract": see Commission v The Netherlands [2013] All ER(EC) 804 at paragraph 109.
The true meaning and effect of the published award criteria is a matter of law for the court: see Clinton (t/a Aureal Training Services) v Department of Employment and Learning and Another [2012] NICA 48 at paragraph 33. A failure to comply with the criteria is a breach of the duty of transparency: see Easycoach Ltd v Department for Regional Development [2012] NIQB10.
Unlike other allegations commonly made during procurement disputes, such as whether or not a manifest error has been made in the evaluation, a breach of the transparency obligation does not allow for any "margin of appreciation": see paragraph 36 of the judgment of Morgan J in Lion Apparel Systems v Firebuy Ltd [2007] EWHC 2179 (Ch).
Equal Treatment
The duty of equal treatment requires that the contracting authority must treat both parties in the same way. Thus "comparable situations must not be treated differently" and "different situations must not be treated in the same way unless such treatment is objectively justified": see Fabricon v Belgium [2005] ECR1–01559 at paragraph 27. Thus the contracting authority must adopt the same approach to similar bids unless there is an objective justification for a difference in approach.
Morgan J's observation in Lion Apparel, noted above, is equally applicable to the duty of equality: again, when considering whether there has been compliance, there is no scope for any 'margin of appreciation' on the part of the contracting authority.
Manifest Error
The relevant regulation of the Public Contracts Regulations 2006 allows redress where the contracting authority has made a manifest error in its evaluation. As Morgan J makes plain in paragraph 37 of his Judgment in Lion Apparel, this is a matter of judgment or assessment, so in this respect the contracting authority does have a margin of appreciation. The court can only disturb the authority's decision in circumstances where it has committed a manifest error. Morgan J went on at paragraph 38 to say:
"When referring to a 'manifest' error, the word 'manifest' does not require any exaggerated description of obviousness. A case of 'manifest error' is a case where an error has clearly been made."
The first (and still best-known) case in which a judge worked through a tender evaluation process to see whether or not manifest errors had been made was Letting International Ltd v London Borough of Newham [2008] EWHC 158 (QB). There, Silber J followed the approach of Morgan J in Lion Apparel as to the law, and went on to say:
"115. Third, I agree with Mr Anderson that it is not my task merely to embark on a remarking exercise and to substitute my own view but to ascertain if there is a manifest error, which is not established merely because on mature reflection a different mark might have been awarded. Fourth, the issue for me is to determine if the combination of manifest errors made by Newham in marking the tenders would have led to a different result."
On the facts, Silber J altered just two of the individual scores, in circumstances where the errors were either admitted or incapable of rational explanation.
The only real issue of principle was the extent to which 'manifest error' broadly equated with the concept in UK law of Wednesbury unreasonableness. Ms Osepciu said that it did; Mr Barrett submitted that the bar for 'manifest error' was not as high as that.
In my view there is a broad equivalence between the two concepts. I set out my reasons for that conclusion, together with the relevant authorities, in BY Development Ltd and Others v Covent Garden Market Authority [2012] EWHC 2546 (TCC). I note that subsequently, in the Court of Appeal decision in Smyth v Secretary of State for Communities and Local Gvernement and Others [2015] EWCA (Civ) 174, Sales LJ said, when dealing with the review of a planning dispute on environmental grounds, that "the relevant standard of review is the Wednesbury standard which is substantially the same as the relevant standard of review of 'manifest error of assessment' applied by the CJEU in equivalent contexts…".
By contrast, no authority was cited to me which suggests that this broad equivalence is incorrect. I note that my judgment in BY Developments was cited and followed in Wilmott Dixon Partnership Ltd v London Borough of Hammersmith and Fulham [2014] EWHC 3191 (TCC). Moreover, in my view there is nothing in the SIAC or the Easycoach cases to suggest any different approach, despite Mr Barrett's submissions to that effect. The highest he could put it was by reference to paragraph 53 of the opinion of Advocate General Jacobs in SIAC, but it is clear to me that this was simply a comment on the possibly exaggerated way in which the Wednesbury test had been expressed at first instance in that case, rather than an exposition of a point of principle, let alone one of such importance. Had it been otherwise, some citation by the Advocate General of at least some authority for this approach might be thought to have been the minimum required. There is none.
Finally I should mention the recent case of Gibraltar Gaming and Betting Association Ltd v The Secretary of State for Culture, Media and Sport & Others [2014] EWHC3236 (Admin). In that case Green J was dealing with a challenge to the legality of an Act of Parliament. The relevant test was whether or not it was 'manifestly inappropriate'. He dealt with that issue at paragraph 100 of his Judgment in these terms:
"In neither EU nor domestic law is there an articulation of what is understood by "manifest". The phrase is defined in dictionaries as something which is: readily perceived, clear, evident, clearly apparent, obvious or plain. The etymology is from the Latin " manifestus"— palpable or manifest. These definitions are helpful only to a degree. What has to be " manifest" is the inappropriateness of a measure. There are two...
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