The recent decision in Bromcom Computers PLC v (1) United Learning Trust and (2) United Church Schools Trust [2022] EWHC 3262 (TCC) provides useful guidance and clarity on correct procedure during procurement process in the UK.
In December 2022, the King's Bench Division (a division of the High Court of Justice in England) held that the United Learning Trust (the "Trust") breached the Public Contracts Regulations 2015 (the "Regulations") during a procurement process. These Regulations implement the Public Service Procurement Directive 2014/23/EU which sets out rules for procurement of goods, services and works meeting certain thresholds by public authorities.
This case involved the procurement process for awarding a contract to supply a management information system ("MIS") to facilitate the Trust's 'Shift to the Cloud' strategy. The contract value was approximately £2 million. The Trust is a group of state-funded schools and fee-paying independent schools in England and falls within the definition of 'contracting authority' under the Regulations. Bromcom Computers PLC ("Bromcom") provides schools and colleges with MISs. In 2019, Bromcom was an unsuccessful tender participant in a competitive dialogue procedure for the award of a 5-year contract to supply a MIS to 57 of the trust's academies. BromCom sought damages from the Trust for various breaches of the Regulations, claiming that had the Regulations been complied with during the procurement process, Bromcom would have won the contract. The court ultimately held in favour of Bromcom.
Scoring/Bid Evaluation
In appraising the bids received from Bromcom and the ultimate winner of the procurement process, Arbor, the Trust had the two bids scored on a number of elements, by 13 evaluators. The methodology used was aggregating and averaging the scores which each evaluator awarded. The court found that this was unlawful as the average scores were calculated prior to the moderation meeting. This meant that the consensus scores were not accompanied by reasons (as simple average computational occurred) and the moderation meeting did not include any debate of the evaluators in reaching a consensus on the score. Instead, during the meeting it was decided to adopt the average scores. While averaging is not outlawed by the Regulations, a contracting authority is required to provide reasons for its scores and where more than one evaluator is involved, the contracting authority must show evidence of moderated discussion leading to consensus scores. The court noted that the Regulations requires a contracting authority to give reasons for its scores and where it use several evaluators, there had to be some form of moderated discussion leading to reasoned agreements on the overall scores. The court held the view that the use of averaging is a breach of the Trust's obligation to act transparently, which requires the provision of reasons for the scores awarded.
Form of Submission
The court noted that all documents related to the procurement process must be sent to the contracting authority by an electronic means which facilitates exact time and date of receipt to be identified and allows only certain authorised personnel to access the data submitted (Regulation 22(16)). Arbor delivered submissions for procurement process by providing a link in an email to DropBox, for the contracting authority to access. The court considered Bromcom's claim that Arbor's bid should have been rejected as a result. The court held that the Trust's infringement of the regulation (in accepting the submissions via DropBox) 'go nowhere…because in any counterfactual… [the Trust] putatively would have told Arbor immediately that its method of providing its tender documents was non-compliant and that it should send them as attachments'. However, this serves as a reminder to contracting authorities and tenderers alike to ensure full compliance with the form of submissions obligations of the Regulations.
Arbor also submitted some further documents after the submission deadline had passed. The court noted that the Trust was entitled to accept documents submitted after the submission deadline, where the missing documents was not one of the mandatory tender documents. However the court noted that the Trust, as contracting authority should have informed Bromcom that a late document had been accepted, to comply with duty of transparency and equal treatment. The court held that Bromcom's challenge on this basis was not successful as the court felt it was unlikely that a different outcome would have flowed from rejection of late submissions.
Incumbent Advantage
Arbor was the incumbent provider of the MIS to a number of the Trust's academies. These academies did not form part of the procurement. The court held that while the Trust was not under an obligation to neutralise the incumbent's advantages, it should neturalise advantages where it is straightforward to do so. For example, the court found that the Trust should not have allowed Arbor (the incumbent) to include the discount in its tender documents, which was connected to a rebate on fees charged under the existing contract, in the event Arbor's tender was successful. This rebate infringed Regulation 67 of the Regulations.
Limitation Period
In raising the limitation defence, the Trust sought to argue that the proceedings were statute-barred. Regulation 92(2) of the Regulations requires that proceedings challenging the procurement process are commenced within 30 days of the tenderer first knowing or ought to knowing that they had grounds for a claim. The court held that the limitation period did not commence until a replacement standstill letter was issued by the Trust to Bromcom, a couple of weeks after the debrief occurred. In this letter, the Trust referred to Regulation 86 which requires reasoning for selection of successful tenderer and identify the standstill period (during which the contracting authority must not enter into contract with the successful tendered). The court found that Bromcom was entitled to receive clear and well-structured information regarding the procurement process (rather than informal phone-calls), in order to challenge it.
Key takeaways
An assessment of the quantum of damages is due to follow the court's judgment. The court's findings highlight a number of important points, including that a contracting authority must decide scores following a moderation process. Average scoring and methods that do not involve the evaluators agreeing on a consensus score and reasons, are unlikely to meet the transparency obligations, and therefore may be unlawful. The judgment provides good guidance on various other aspects of the procurement process including methods of submission and acceptance of documents post-deadlines, along with dealing with incumbent advantage and limitation issues.