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Disclosure in public procurement challenges

An aggrieved tenderer will always want to find out as much as possible about what happened during a procurement process in order to fully understand why its bid failed. For most procurements (other than those either under threshold or for Part B services), the Public Contracts Regulations 2006 (SI 2006/5) (and as amended) (Regulations) contain their own mechanism (under regulation 32) for the communication of relevant comparative information to the tenderer about its bid and that of the winner, to enable it to gain that understanding.

However, it is also the case that the level of information that the contracting authority is willing to provide at that stage can be extremely varied. Sometimes it will provide the barest possible information, leading to the inevitable challenge that regulation 32 has not been complied with, and the standstill period has therefore not been engaged. On other occasions, significant information will be supplied, which may in turn open up avenues of enquiry for the losing tenderer to ask extra questions, or to request further information or documents.

In view of the strict timescales within which a challenge can be brought (30 days following the 2011 legislation), tenderers will often issue proceedings with little knowledge of how to properly articulate an alleged breach of the Regulations. It is common for statements of case to be prepared on the basis of a mere suspicion of irregularity, or on the basis of information supplied by a third party (and sometimes even a “mole” from the contracting authority itself). In those circumstances, the claimant-tenderer may face applications for strike out or summary judgment, which, in turn, are defended on the grounds that the authority has not made documents or information available so as to enable the claimant’s case to be properly investigated or pleaded.

Disclosure principles develop

The net (and possibly inevitable) result is applications for disclosure of documents which, since Alstom v Eurostar [2010] EWHC B32 (Ch), have been essentially approached by the courts as a “blended” application taking into account principles from the rules in relation to pre-action disclosure and specific disclosure.

Since Alstom, there have been several helpful TCC judgments, including Roche Diagnostics Ltd v Mid Yorkshire Hospitals NHS Trust and Pearson v Minister for the Cabinet, where the court has grappled with the categories of documents that ought to be disclosed by contracting authorities and the timing of such disclosure.

Coulson J summarised the appropriate principles in Roche (paragraph 20):

“(a) An unsuccessful tenderer who wishes to challenge the evaluation process is in a uniquely difficult position. He knows that he has lost, but the reasons for his failure are within the peculiar knowledge of the public authority. In general terms, therefore, and always subject to issues of proportionality and confidentiality, the challenger ought to be provided promptly with the essential information and documentation relating to the evaluation process actually carried out, so that an informed view can be taken of its fairness and legality.

(b) That this should be the general approach is confirmed by the short time limits imposed by the Regulations on those who wish to challenge the award of public contracts. The start of the relevant period is triggered by the knowledge which the claimant has (or should have) of the potential infringement. As Ramsey J said in Mears Ltd v Leeds City Council [2011] EWHC 40 (QB), “the requirement of knowledge is based on the principle that a tenderer should be in a position to make an informed view as to whether there has been an infringement for which it is appropriate to bring proceedings”.

(c) However, notwithstanding that general approach, the court must always consider applications for specific disclosure in procurement cases on their individual merits. In particular, a clear distinction may often be made between those cases where a prima facie case has been made out by the claimant (but further information or documentation is required), and those cases where the unsuccessful tenderer is aggrieved at the result but appears to have little or no grounds for disputing it.

(d) In addition, any request for specific disclosure must be tightly drawn and properly focused. The information/documentation likely to be the subject of a successful application for early specific disclosure in procurement cases is that which demonstrates how the evaluation was actually performed, and therefore why the claiming party lost. Other material, even if caught by the test of standard disclosure, is unlikely to be so fundamental that it should form the subject of a separate and early disclosure exercise.

(e) Ultimately, applications such as this must be decided by balancing, on the one hand, the claiming party’s lack of knowledge of what actually happened (and thus the importance of the prompt provision of all relevant information and documentation relating to that process) with, on the other, the need to guard against such an application being used simply as a fishing exercise, designed to shore up a weak claim, which will put the defendant to needless and unnecessary cost.”

What is of particular interest to me is principle (a) above and, specifically, what might be said to be the genesis of a “general rule” in relation to disclosure to be expected of a contracting authority.

It is a fundamental principle of the procurement process that competitions are conducted in a fair and transparent manner. One obvious way of determining whether this is the case is by seeing, at the very least, full details of the evaluation process and the winning bid (usually in a confidentiality ring), so that the would-be claimant can determine whether the tenderers have been treated equally. Reviewing the evaluation might also reveal other irregularities that would otherwise go undetected.

But is this really justified?

Provided that the regulation 32 information is sufficient, then why should a contracting authority be interrogated in relation to the procurement in general terms so that a claimant can see whether the process was fairly conducted away from areas of specific complaint?

Further, it is not always the case that a claimant actually needs to see evaluation documentation or a winning tenderer’s bid. For example:

  • Where a decision to disqualify a bid early in the procurement phase is challenged, a review of the winning tender (that is, post disqualification) is not required.
  • Where a challenge is brought in relation to a specific element of the evaluation process (like quality), why should disclosure of all matters concerning the evaluation of the financial element of that bid and/or of any other tenderers’ bids (to the extent that unfair treatment/bias is not alleged) be needed?

That would also militate against any kind of “general rule”.

Should there be wider interrogation?

However, there may well be cases where a wider interrogation is indeed merited. Take a scenario where a claimant advances a case in relation to a certain part of a tender (thus falling in the “acceptable” category of applicant in Coulson J’s ground (c) above), which leads it to harbour further concerns over other areas of the evaluation process. The claimant may be unable to articulate a case in relation to those other areas because it is unaware of what has gone on.

It might be said that specific disclosure of a wider category of documents relating to the evaluation process in general (and not simply those relating to identified breaches or complaints) is justified, because the would-be claimant has raised a broader concern of systemic default or unfairness in the process. Investigating that broader concern is permissible in view of the case advanced with regard to a specific part of the process. In such circumstances, it might be fair and reasonable for the claimant to have sight of all evaluation documents and to check whether there are any other points which could potentially be taken in the action.

The difficulty, however, is drawing the line. For example, there appears to be nothing to stop a tenderer from pleading breach(es) in the most general of terms in relation to the entire procurement, in order to have sight of all evaluation documents that may (or may not) reveal a potential cause of action.

While Coulson J’s criteria do appear to contain safeguards against this (by identifying the “unacceptable” category of applicant in ground (c), and/or by the anti-fishing sentiments of ground (e)), there does seem to me to be a danger that ground (a) could be abused in an attempt to mount a full scale “audit” of the procurement. An aggrieved tenderer would say this is justified because of a perceived entitlement to reach “an informed view” in relation to the “fairness and legality” of the process. If that were taken to an extreme, then the situation would arise whereby every tenderer could carry out a full scale review of the entire process – which one might think was contrary to policy.

Perhaps these fears are unfounded. Coulson J’s criteria were applied in Pearson and it is arguable that the court adopted a relatively conservative approach. It remains to be seen how the case law develops, but it does seem pretty clear that it will develop incrementally. The idea of a court-sanctioned “shopping list” of documents to be disclosed as a matter of policy by contracting authorities appears to be some way off.

What is reasonable to disclose?

That said, in principle there seems to be little objection to disclosing scoresheets and the winning bid (subject to confidentiality), particularly if unfair or unequal treatment is alleged in relation to marking. It is unlikely that this will require disclosure of rafts of documentation, and those documents should already be to hand, so any objections of cost or inconvenience would appear to be unwarranted. It may well be that these are the “essential” documents that Coulson J had in mind when formulating ground (a).

Any automatic disclosure of wider categories of documents is, in my view, unlikely to be justified at an early stage (although this will of course depend on the facts of the case). At some point, the tenderer has to have the courage of its convictions to plead a case (even if it has to reserve its position pending disclosure), and amend at a later date if required. Substantial one-sided disclosure at an early stage would also lead to an artificial imbalance in favour of the contractor at the subsequent application for injunctive relief or to lift the suspension under regulation 47H. The tenderer would be able to address the court on the questions of serious issue to be tried and balance of convenience armed with the benefit of a substantial amount of the contracting authority’s disclosure, in circumstances where it has not yet had to disclose its own documentation (which may well contain material which is prejudicial to those matters).

Practical considerations

In the meantime, the following practical considerations are suggested:

  • Do not issue scattergun disclosure applications. Prioritise key documents that are truly essential either to enable a case to be pleaded, or to investigate areas of genuine concern.
  • Think hard about automatically refusing disclosure of evaluation documentation and/or the winning bid, and think even harder about redacting those documents. While there may not be a blanket “general rule” in relation to specific early disclosure of these documents, it is likely that they will be disclosable at some point. Holding them back may well serve only to raise suspicions of what are, in reality, fairly innocuous documents.
  • Bear in mind that specific disclosure applications are more often than not contested, yet there may in reality be little or no resistance to the documents sought being handed over by way of standard disclosure. If that is the case, then claimants should consider whether the documents are really needed prior to standard disclosure, and defendants should consider what prejudice will really be suffered in handing over documents slightly sooner than they would otherwise have to. At the end of the day, someone will have to pick up the costs of the application.

Finally, a restrictive approach was recently adopted by Akenhead J in Covanta Energy Ltd v Merseyside Waste Disposal Authority. We also await judgment in BY Developments v Covent Garden Market Authority, to see whether additional guidance will be given.

A version of this article also appears in the KC Construction update, Autumn 2013.

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