Local Government News - Public Procurement

Spring 2018

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Disclosing the implications of failing to meet criteria

A recent case has shown the importance of contracting authorities making clear the criteria they apply to procurement exercises and the implications of failing to meet any of these.

In the case of MLS (Overseas) Limited v Secretary of State for Defence [4], which was conducted under the Defence and Security Public Contracts Regulations 2011, the Ministry of Defence had sought to procure services for the Royal Navy. The invitation to tender included a question about safe working culture in tenderers’ own organisations and in their supply chains. This question was a pass/fail question. The claimant was considered to have provided inadequate information about how it would pass on health and safety obligations to its contractors and so was marked as having failed this question. Therefore, although the claimant had in other respects provided the most economically advantageous tender, its tender was excluded as non-compliant. The claimant challenged this decision, arguing that the invitation to tender had not been clear about the implications of failing that particular question and that therefore the Ministry of Defence did not have the right to exclude its tender for failing one question. In respect of five other questions, the invitation to tender had provided an example evaluation table and had stated that failure to meet a specified minimum standard for any of those questions would result in rejection of a tender. The Ministry of Defence had not included an express statement to say that failing that particular question would lead to exclusion of a tender but it argued that it would have been apparent to a reasonably well-informed and normally diligent tenderer that failing the question would result in automatic or discretionary rejection of the tender.

The court found that the Ministry of Defence had acted unlawfully by failing to comply with its obligation to act transparently in procurement. The court did not accept the Ministry of Defence’s argument that a tenderer should have understood that a fail score on a particular health and safety question would lead to automatic rejection of a tenderer. It found instead that a tenderer would assume that there would be difference between that question and the five questions in respect of which the invitation to tender had explained that failure to meet a specified minimum standard would lead to rejection. Therefore the challenge against the Ministry of Defence’s decision succeeded.

This case related to the Defence and Security Public Contracts Regulations 2011 but the principles could apply equally to procurements under the Public Contracts Regulations 2015. It reminds contracting authorities of the importance of being transparent about their selection and evaluation criteria and the implications of failing to meet standards in respect of any of these. Any deficiency by a contracting authority in this respect will make its procurements vulnerable to challenge.

4 [2017] EWHC 3389 (TCC)

If you have any issues or queries regarding the above, please contact a member of our Central, Devolved and Local Government Team.


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