Fresenius Medical Care (Ireland) Ltd v Health Service Executive

• Jurisdiction: Ireland
• Judge: Mr Justice Michael Peart
• Judgment Date: 16 July 2013
• Neutral Citation: [2013] IEHC 414
• Court: High Court
• Date: 16 July 2013

[2013] IEHC 414

THE HIGH COURT

Record Number: No. 232 JR/2012

Fresenius Medical Care (Irl) Ltd v Health Service Executive & Beacon Medical Group

IN THE MATTER OF COUNCIL DIRECTIVE 18/2004/EC

AND IN THE MATTER OF THE EUROPEAN COMMUNITIES (AWARD OF PUBLIC AUTHORITIES' CONTRACTS) REGULATIONS, 2006 (S.I. 329/2006)

AND IN THE MATTER OF THE EUROPEAN COMMUNITIES (PUBLIC AUTHORITIES CONTRACTS REVIEW PROCEDURES) REGULATIONS, 2010 (S.I. 130/2010)

AND IN THE MATTER OF ORDER 84A OF THE RULES OF THE SUPERIOR COURTS, AS AMENDED

BETWEEN:

FRESENIUS MEDICAL CARE (IRELAND) LIMITED

APPLICANT

AND

HEALTH SERVICE EXECUTIVE

RESPONDENT

AND

BEACON MEDICAL GROUP

NOTICE PARTY

EEC DIR 2004/18 ART 23

EEC DIR 2004/18 ART 35(4)

P (A) v DPP 2011 1 IR 729

RSC O.84

DEKRA EIREANN TEO v MIN FOR ENVIRONMENT 2003 2 IR 270

CMSN v IRELAND 2009 ECR 1-225

RSC O.84A

EUROPEAN COMMUNITIES (PUBLIC AUTHORITIES CONTRACTS)(REVIEW PROCEDURES) REGS 2010 SI 130/2010 REG 7(2)

EEC DIR 2004/18 ART 21

EEC DIR 2004/18 ART 35(4)

EEC DIR 2004/18 ART 41

EEC DIR 2004/18 ART 36(2)

CMSN v DENMARK 1993 ECR 1-3535

CMSN v BELGIUM 1996 ECR I-2043

SIAC CONSTRUCTION LTD v MAYO CO COUNCIL 2001 ECR I-7725

RELEASE SPEECH THERAPY LTD v HSE UNREP MCMAHON 18.2.2011 2011/44/12526 2011 IEHC 57

CMSN v IRELAND C-226/09 UNREP ECJ 18.11.2010

STRONG SEGURANCA SA v MUNICIPIO DE SINATRA C-95/10 UNREP ECJ 17.3.2011

TELAUSTRIA VERLAGS GMBH v TELEKOM AUSTRIA 2000 ECR 1-10745

ARROWSMITH LAW OF PUBLIC UTILITIES PROCUREMENT 2ED 2005 194

CLARE CIVIL ENGINEERING LTD v MAYO CO COUNCIL UNREP O'NEILL 9.7.2004 2004/7/1517 2004 IEHC 135

PUBLIC PROCUREMENT

Tender

Contract for provision of services - Award criteria - Transparency - Equal treatment - European Union law - Whether distinction between treatment of Annex IIA and Annex IIB tenders in European Directive - Standard of review - Margin of appreciation - Manifest or clear error - Whether principles of transparency and equal treatment under European Union law applicable to impugned tender process - Whether manifest of clear error in scoring of award criteria - Whether respondent entitled to score tender in manner done - Whether breach of principles of transparency and equal treatment - Clare Civil Engineering Ltd v Mayo County Council [2004] IEHC 135 (Unrep, Ó Néill J, 9/7/2004) approved - AP v DPP [2011] IESC 2, [2011] 1 IR 729; Dekra Éireann Teoranta v Minister for Environment [2003] 2 IR 270, Commission v Ireland [2009] ECR I-225; Commission v Ireland [2010] ECR I-11807; Commission v Denmark [1993] ECR I-3353; Commission v Belgium [1996] ECR I-2043; Release Speech Therapy Ltd v HSE [2011] IEHC 47, (Unrep, McMahon J, 18/2/2011); Strong Seguranca SA v Municipio de Sintra (Case C-95/10) [2011] ECR I-1865 and Telaustria Verlags GmbH v Telekom Austria [2001] ECR I-10745 considered - SIAC Construction v Mayo County Council [2001] ECR I-7725 distinguished in part - Rules of the Superior Courts 1986 (SI 15/1986), O 84 & 84A - European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010 (SI 130/2010), reg 7 - Directive 89/665/EEC - Directive 2004/18/EC on Consolidated Public Procurement, arts 23, 35 and Annex II - Proceedings dismissed (2012/232JR - Peart J - 16/7/2013) [2013] IEHC 414

Fresenius Medical Care (Ireland) Ltd v Health Service Executive

Facts The applicant had entered into a tendering competition regarding the provision of renal haemodialysis satellite units. In the main the applicant was unsuccessful and was unhappy with some of the procedures adopted. Legal proceedings were instituted and the applicant contended that the HSE (the respondent) had failed to mark bids in a manner that ensured equal treatment to all tenderers. It was submitted that criteria had been used in the marking system which had not been made known in the invitation to tender or in any supplemental clarifications and that the general principles of transparency and equal treatment of tenderer had been breached.

Held by Peart J in refusing the relief sought: There was no basis to find that the HSE had committed a manifest error or had been guilty of breaching equal treatment and transparency principles. Nor had there been some lack of transparency as to the criteria applicable. No manifest error had been identified in the marking system adopted or in the weight given to the applicant"s answers.

1 Mr Justice Michael Peart delivered on the 16th day of July 2013:

2 1. The applicant company ("Fresenius") is a leading provider of renal products and renal services not just in this jurisdiction but worldwide.

3 2. On the 27 ^th May 2011 the respondent ("HSE") published an invitation on the E-tenders website inviting interested parties to submit an expression of interest document in respect of a Contract for the provision of satellite haemodialysis units for Dublin North East and Dublin Mid-Leinster, and sought tenders for the Contract by no later than 23 ^rd June 2011. It appears from the documents that in line with international trends, the National Renal Office has projected an increase in the number of patients requiring dialysis. The HSE wishes to expand its capacity to deal with these projected numbers, as well as to provide services closer to patients' homes, improve in-patient centred care, and expand and support the National Renal Transplant Programme.

4 3. The expressions of interest sought were in respect of four lots:

5 (i) Lot 1: Renal Satellite Unit for Dublin North East (along the M1 corridor)

6 (ii) Lot 2: Renal Satellite Unit for Dublin North East (North of River Liffey)

7 (iii) Lot 3: Renal Satellite Unit for Dublin Mid Leinster (South of River Liffey, East of River Dodder)

8 (iv) Lot 4: Renal Satellite Unit for Dublin Mid Leinster (North of River Liffey, West of River Dodder).

9 4. The document stated that no single tenderer would be awarded all lots. The view of the HSE, as evidenced in the later Tender Response document which formed part of the Invitation to Tender, was that 'the optimum service will require a minimum of two service providers, thereby preventing the development of a monopoly relationship with the HSE, ensuring sustainable service provision and market stability and maximising value for money, quality of service and service support for the HSE".

10 5. Five companies submitted expressions of interest within the prescribed time, including Fresenius, which expressed interest in Lots 1, 2 and 4 only. Fresenius was already the incumbent service provider in respect of Lot 2 (Dublin North East - North of River Liffey). All five expressions of interest were evaluated on the 15 ^th July 2011 against, firstly, the Mandatory Exclusion Criteria, and, secondly, against the Qualitative Selection Criteria. All were considered to have passed.

11 6. The procurement process being adopted by the HSE was a four-stage process - expression of interest, tender proposals, dialogue on proposals, and award.

12 7. Having informed each of the five bidders that they had been successful in that first phase of the process, HSE moved to the second stage, and by email dated 29 ^th July 2011 furnished to each the Initial Invitation to Tender. The Invitation to Tender informed the bidder that the required services the subject of the tender are Annex II B services and that, accordingly, only Articles 23 and 35(4) of the Consolidated Public Procurement Directive 2004/18/EC for the award of public service contracts, as amended, would apply to the award of any contract arising from this tender process. It also informed bidders that the closing date for proposals was 12 noon on 9 ^th September 2011.

13 8. Clause 2.1 of the Invitation to Tender stated that tenders which achieved the minimum requirements set out in the qualitative selection criteria would then be evaluated to determine which presented the most economically advantageous tender, and that tenders would be evaluated using the criteria and associated weightings as outlined in the Invitation to Tender document. The document specified main criteria of quality and cost-effectiveness with weightings of 35% and 65% respectively. Sub-criteria within the main criteria of quality were listed as Model of Care, Patient Experience (including location and accessibility), Facility (including equipment and layout), Patient Management Systems and Audit, and finally a Value Add Option.

14 9. Each bidder submitted its tender proposals by the prescribed closing date. The applicant submitted initial tender proposals in respect of Lots 1, 2 and 4, while the Notice Party, Beacon, submitted initial tender proposals for each of the four lots. On the 21 ^st September 2011 a sub-group of the Procurement Evaluation Group (PEG) met to discuss certain commercial aspects of the tender, and met again on the 27 ^th September 2011 to discuss those commercial aspects as well as technical elements of the tender. Following these meetings, the PEG set up sub-committees to review two aspects of the tender, namely location and ICT requirements.

15 10. Thereafter, and prior to the submission of final tenders by the bidders, the third phase of the tender process took place, namely the dialogue phase. This provided an opportunity for the HSE to provide some feedback in relation to the initial tender proposals submitted in order to assist the preparation of the final bid proposals. Members of the HSE visited the sites proposed by each tenderer in respect of each Lot. These visits took place on the 7 ^th October 2011 in relation to Lots 1 and 2, and on the 13 ^th October 2011 in respect of Lots 3 and 4.

16 11. According to the replying affidavit of Martin Quinlivan of HSE sworn 1 ^st May 2012, HSE representatives held dialogue meetings with representatives of the five bidders on the 18 ^th October 2011, after which HSE issued Supplementary Clarifications on the...