Evaluation and Recent Case Law

1. Evaluation and Recent Case Law Procurement Lawyers Association 23 January 2009

2. Evaluation – Recent case law • Significant (70%) increase in case law over past two years (Themis) • Number of domestic and ECJ cases concerned with transparency, disclosure of evaluation criteria, sub-criteria and weightings • Procurement Lawyers Association - a welcome initiative! • Case law (with thanks to Achilles Themis online) includes • Lion Apparel Systems v Firebuy 27 September 2007 (Morgan J) [2007] EWHC 2179 • Lianakis v Dimos Alexandroupolis 24 Jan 2008 C-532/06 • Lettings International Ltd v LB of Newham 7 July 2008 [2008] EWHC 1583 (QB) • McLaughlin & Harvey Ltd v Department of Finance & Personnel (2) [2008] NIQB 91 • Lightways (Contractors) Ltd V North Ayrshire Council [2008] SLT 690

3. Lion Apparel Systems v Firebuy • Interim order sought by Lion to prevent Firebuy entering into contract for supply of uniforms and protective clothing to Fire Authorities • Injunction refused - only one of the points argued re scoring methodology had the potential to succeed, but this point was weak • Obiter - Court indicated that award criteria may be changed under certain conditions: • Is there express provision to amend the award criteria? • Has the authority complied with those express provisions? • The authority must then apply any such amended criteria • Note also the earlier EVN case:- • criteria cannot be changed without giving tenderers the chance to amend their tenders accordingly • does not definitively indicate whether criteria may ever be changed

4. Lianakis v Dimos Alexandroupolis • Case involved procurement of planning and advisory services • Award criteria related to experience of similar projects, workforce issues and ability to complete within timetables • ECJ held these were selection (pre-qualification) criteria rather than award criteria and should not be used at award stage • On the use and disclosure of weightings and sub-criteria when applying evaluation (award) criteria, the ECJ held Authorities cannot apply weightings or sub-criteria which they had not previously brought to tenderers’ attention • Well in advance of preparing their tenders, an Authority should make tenderers aware of all the elements and their relative importance, to be taken into account by the Authority when identifying the most economically advantageous offer • Tenderers should be placed on an equal footing throughout - Authorities should adequately publicise the criteria and conditions governing each contract

5. Lettings International Ltd v LB of Newham • Newham procuring frameworks for property management and maintenance services. Lettings were existing supplier who failed at tender evaluation • 3 high level criteria were stated in tender documents • After tenders were submitted, it was disclosed that 50% of the assessment was linked to five method statements, allocated scores of between 5%-17%. • To score highest marks, bidders had to exceed rather than meet the requirements • Lettings challenged Newham for non-compliance with transparency principle • The Court held that Newham failed to sufficiently disclose the award criteria, sub-criteria and weightings in advance to all bidders and failed to properly apply its chosen award criteria • Authorities that wish to use sub-criteria must state them in the notice or documents - otherwise they must simply apply the award criteria in a general discretionary manner, without using specific sub-criteria at all

6. McLaughlin & Harvey Ltd v Department of Finance • Tender under a competitive negotiated procedure for appointment to a Framework Agreement for the provision of construction services • Followed Lianakis and Lettings International, confirming that the Directive states that where tenders are assessed on the basis of ‘most economically advantageous’, then any criteria, sub-criteria and their associated weightings should be disclosed in advance • The Court highlighted that tenderers should be made aware of all these elements if they ‘could’ affect the preparation of tenders and not necessarily ‘would’ affect tender preparation • Authorities must prepare any evaluation guide documents, or similar, prior to receipt of tenders. The Court declined to comment on whether such documentation should also be disclosed pre-tender

7. Lightways (Contractors) Ltd V North Ayrshire Council • Interim application for injunction to prevent award of 2-year lighting contract • Lightways established a prima facie case of breach of the regulations in 3 areas:- • selection criteria (plant and equipment, staffing structures and health and safety issues) were incorrectly used as award criteria • the scoring system • inadequate debriefing • On the selection/award criteria point, the Court rejected Council’s argument to follow earlier Renko case (which took a more liberal view), preferring Lianakis approach • Despite the prima facie case, the Court declined to suspend the award procedure because the balance of convenience favoured the Council:- • the Council would incur significant extra costs if existing arrangements were extended • Lightways could still apply for damages post contract award

8. Clear Conclusions? • Get early, informed, legal advice – crucial, litigious, current issue • To avoid allegations that they are changing the rules to suit the tenders received, authorities must: • disclose all the elements to be taken into account when identifying the most economically advantageous offer, and the relative importance of those elements • Give early, informed consideration to how evaluation will be carried out during procurement and at different stages of process including what information will be required from bidders at each stage • Determine the ‘rules’ of the process well in advance - tell bidders what they are expected to do, what they have to aim for and how criteria will be applied by them. • Treat bidders fairly, equally, transparently • Avoid surprises and avoid unnecessary or foreseeable changes • Keep selection and award criteria separate and distinct - wherever possible, avoid cross fertilisation

11. Area of uncertainty - for discussion • Does Lianakis etc mean authorities can never take account of (e.g.) experience, workforce issues, financial stability, health and safety etc when applying MEAT criteria at the award stage? • Does Lianakis etc mean authorities can never consider relative ability to complete the project as award criteria? – previous case law EVN? • Should evaluation criteria, sub-criteria, weightings etc once disclosed, be set in stone? • Can the authority change headline criteria, sub-criteria and their weightings during process? If so when, how, what are the risks?