Clare Civil Engineering Ltd v Mayo County Council

• Jurisdiction: Ireland
• Judge: O'Neill J.
• Judgment Date: 09 July 2004
• Neutral Citation: [2004] IEHC 135
• Docket Number: HC 280/04
• Court: High Court
• Date: 09 July 2004

[2004] IEHC 135

THE HIGH COURT

HC 280/04

No. 577 J.R./2000

CLARE CIVIL ENGINEERING LTD v. MAYO CO COUNCIL

In the Matter of Council Directive 89/665/EEC

And in the Matter of the European Communities

(Review Procedures for the Award of Public Supply,

Public Works and Public Service Contracts)

No. 2 (Regulations) 1994 (S.I. 309 of 1994)

Between

Clare Civil Engineering Ltd.

Applicant

And

The County Council of the County of Mayo

Respondent

Citations:

EUROPEAN COMMUNITIES (AWARD OF PUBLIC WORKS CONTRACTS) REGS 1992 SI 36/1992

DIR 93/37/EEC ART 24

DIR 93/37/EEC ART 26

DIR 93/37/EEC ART 27

DIR 93/37/EEC ART 28

DIR 93/37/EEC ART 29

METHOD OF MEASUREMENT FOR FOAD & BRIDGE WORKS HMSO UK 1997

METHOD OF MEASSUREMENT FOR ROADS & BRIDGE WORKS SUPPLEMENT NO 1 HMSO UK 1978

SIAC CONSTRUCTION V MAYO CO COUNCIL 2002 3 IR 148 2002 2 ILRM 401 2002/26/6644

Abstract:

European Union - Public procurement - Review of award of contract - Damages - Whether applicant unlawfully eliminated - EC (Review procedures for the award of public supply, public works and public service contracts) No. 2 (Regulations) 1994 (S.I. 309/ 1994) - Council Directive 93/37/EEC

Facts: The applicant sought review of the award of the contract for the construction of the Knock/Claremorris bypass claiming that the respondents had failed to comply with Council Directive 93/37/EEC in various respects. The primary relief was confined to damages. The applicant claimed that its tender had been unlawfully eliminated and its tender price was substantially below that of the company to whom the contract was awarded.

Held by O’Neill J. in granting the relief claimed that the applicant’s tender was unlawfully eliminated and but for the elimination of its tender the applicant would have been successful in winning the contract and it followed that the respondents were liable to the applicant in damages for whatever recoverable losses had been suffered by the applicant.

Reporter: R.W.

Judgment of

O'Neill J.

1 delivered the 9th of July, 2004.

2 In these proceedings the applicants seeks a review of the award of the contract for the construction of the Knock/Claremorris bypass claiming that the respondents failed to comply with Council Directive 93/37/EEC"the Works Directive" in various respects. The primary relief claimed is confined to damages.

3 On 25^th February, 2000, the respondent published in the Official Journal a contract notice in respect of the award of a contract for the construction of the Knock/Claremorris bypass. The respondent was a contracting authority for the purposes of Council Directive 93/37/EECconcerning the co-ordination of procedures for the award of public works contracts (hereinafter referred to as the "Works Directive"), which directive forms part of Irish Law by virtue of the European Communities (Award of Public Works Contract) Regulations 1992 ( S.I. 36 of 1992 and S.I. 293 of 1994) ("the Works Regulations"). The value of the contract was in excess of IR£7 million. In April, 2000 the applicant tendered for this contract. For the purposes of its tender the applicant was supplied with voluminous contract documentation consisting inter alia of the Specification, the Instructions to Tenderers, the Method of Measurement for Road and Bridge Works, the Preamble to the Bill of Quantity and the Bill of Quantities.

4 The notice published in the Official Journal did not specify the award criteria which were in fact set out in the instructions to tenderers at instruction 5 (b). Although the criteria were expressed to be, that the contract would be awarded to the tenderer it judged to be the most economically advantageous to the respondent, instruction 5 (a) limited the criteria to be used to establish the most economically advantageous, to the Tender Price.

5 On 9^th May, 2000, a meeting took place between Andrew Whelan and Paul Whelan for the applicants and Mr. Patsy Burke the project engineer for the respondents. A few days later by letter dated 11th May, 2000, Mr. Burke wrote seeking further information in relation to the applicant's tender. That letter was in the following terms:

"Re: Knock/Claremorris bypass Phase I Contract No. 5."

Dear Mr. Whelan,

6 On behalf of Mayo Co. Co. I would like to thank yourself, Mr. Andrew Whelan and Mr. Mark Duffy for coming to Claremorris on Thursday 10th inst. to discuss matters relating to your tender for the construction of Contract No. 5 on the Knock/Claremorris bypass with Mr. Richard Glancy and myself.

7 We agreed following discussion that you would submit the following information by Tuesday 18th May;

8 1. A statement setting out your company, profile and management [organisational structure and listing the personnel that you propose to commit to the Knock/Claremorris bypass contract.

9 2. A description of the source and the location of the stone and bituminous materials which you propose to use. I require a letter from your proposed supplier confirming his agreement to supply you with the various grades and types of stone, bitumen macadam and asphalt required to complete the contract in accordance with your tendered price.

10 3. A list of your proposed subcontractors and their relevant experience.

11 4. A statement from your bankers that Clare Civil Engineering Limited is financially capable of undertaking a project of this size at this time. We also require a statement from the bankers of the Clare Civil Engineering Limited turnover on construction works for the last three financial years.

12 5. A preliminary works programme and method statement for the construction of the works.

13 6. A complete schedule of basic prices.

14 7. A completed form of undertaking.

15 The above information is required to enable us to proceed with the detailed assessment of the tender received from Clare Civil Engineering Limited and would help determine the suitability of Clare Civil Engineering limited to carry out the contract.

16 Yours sincerely.

P. Burke Project Resident Engineer."

17 Although the applicants were of the view that the respondents were not entitled to seek much of the information sought in this letter the applicants decided to respond to it fully in the hope of winning the contract. The information sought in the respondent's letter was delivered by the applicant to the respondents on 18th May, 2000.

18 Late in June, 2000 the applicants heard informally that the respondent's decision on the applicant's tender would not be favourable, even though the applicant's tender was the lowest by a margin of some IR£300,000.

19 Being concerned at this state of affairs the applicants engaged the well known consultant Mr. Max Abrahamson who wrote to the respondents by letter dated 6th July, 2000 in the following terms;

"Dear Sir,"

20 I advise Clare Civil Engineering Ltd. My clients have been given to understand that their tender for the Knock/Claremorris bypass Phase I Contract No. 5 has been passed over. As you are aware they have a right to know the reasons for this decision and I shall be glad to receive particulars as a matter or urgency.

Yours faithfully."

21 By letter dated 11th July, 2000, the respondents replied to the letter of 6th July, simply saying that Mr. Abrahamson's letter was receiving attention.

22 By a letter dated the 25th July, 2000, the respondents wrote to the applicant giving its reasons for the rejection of the applicant's tender. This letter was the first formal intimation to the applicants that its tender had been rejected and is as follows:

"Re: Knock/Claremorris bypass — Contract No. 5 Tender of Clare Civil Engineering Limited."

Dear Mr. Abrahamson,

23 I refer to your letter of 6th July, 2000 in the above matter.

24 The Instructions to the Tenderers, as provided for in Condoc V2.10; 10th February, 1998 set out clearly the criteria for the award of the contract and set out the method in which the contractor was required to tender and it is the failure of the contractor to comply with the terms of the Instructions to Tenderers which resulted in the rejection of the Tender.

25 The following specific non-compliance was identified and warranted the exclusion of Clare Civil Engineering from further consideration."

26 Article 14 (a) (iv) states that:

27 “The use of negative rates or prices, the omission of rates, the use of zero or nil rates, the use of the term included or the insertion of a dash in the rate column is prohibited (this includes rates arising from the implementation of Instruction 13 (a).”

28 This requirement was not complied with in that the tenderer did not enter a rate for Item 20 or for Item 21 on page 2 of the Bill of Quantities.

29 I trust that this clarifies the situation for you.

Yours sincerely"

30 Mr. Abrahamson responded to this letter by letter of 31st July, 2000 in which he took issue with the approach taken by the respondents as follows:

"Re: Knock/Claremorris bypass Contract No. 5 Clare Civil Engineering Limited."

Dear Sir,

31 Thank you for your letter of 25th July, 2000.

32 I must draw your attention to features of the instruction to Tenderers/Condoc (emphasis added) —

33 “1. …non-compliance may, and in stated circumstances shall, invalidate (a) Tender.

5 (b) …

34 The contract if awarded, will be awarded on the basis of the criteria set out below to the tenderer who has submitted a Tenderin compliance with these Instructions and whose tender is judged to be the most economically advantageous to the employer.

35 The criteria are:

…

36 (b) the Tender Price (that is) the Tender Total as corrected in accordance with Instruction 13 below.”

37 You rightly do not allege non- compliance with Article 8 headed “Requirements for a compliant tender (which in paragraph f applies only to material…alternations or additions …to the tender...