RPS Consulting Engineers Ltd v Kildare County Council

JurisdictionIreland
JudgeMr. Justice Richard Humphreys
Judgment Date15 February 2016
Neutral Citation[2016] IEHC 113
CourtHigh Court
Docket Number[2015 No. 226 JR],[2015 No. 226 J.R.]
Date15 February 2016

IN THE MATTER OF DIRECTIVE 2004/18/EC AND

IN THE MATTER OF COUNCIL DIRECTIVE 89/665/EEC, AS AMENDED BY DIRECTIVE 2007/66/EC AND

IN THE MATTER OF THE EUROPEAN COMMUNITIES (AWARD OF PUBLIC AUTHORITIES' CONTRACTS) REGULATIONS 2006 (S.I. NO. 392 OF 2006) AND

IN THE MATTER OF THE EUROPEAN COMMUNITIES (PUBLIC AUTHORITIES' CONTRACTS) (REVIEW PROCEDURES) REGULATIONS 2010 (S.I. NO. 130 OF 2010) AND

IN THE MATTER OF ORDER 84A OF THE RULES OF THE SUPERIOR COURTS 1986

BETWEEN
RPS CONSULTING ENGINEERS LIMITED
APPLICANT
AND
KILDARE COUNTY COUNCIL
RESPONDENT
AND
ROUGHAN AND O'DONOVAN LIMITED (ROD AECOM) AND AECOM LIMITED
NOTICE PARTIES

[2016] IEHC 113

Humphreys J.

[2015 No. 226 J.R.]

THE HIGH COURT

Public procurement – The European Communities (Award of Public Authorities' Contracts) Regulations 2006 – The European Communities (Public Authorities' Contract) (Review Procedures) Regulations 2010 – Council Directive 89/665/EC – Directive 2004/18/ECDirective 2007/66/ECDirective 2014/24/EU – Reasoned decisions

Facts: The applicant being the unsuccessful tenderer sought various reliefs against the respondent, the prominent of which was that the respondent must give sufficient reasons for awarding the contract to the preferred tenderer under an entirely new point system. The applicant contended that the notification of decision communicated by the respondent failed to disclose the reasons for selecting the preferred tenderer ignoring the fact that the applicant's tender was more competitive on price than the successful tenderer.

Mr. Justice Richard Humphreys granted an order of certiorari and thereby quashed the letters of refusal to provide further reasons to the applicant. The Court granted a declaration that the respondent had contravened the rights of the applicant under the European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010 and Directive 2004/18/EC. The Court granted an order requiring the respondent to provide a letter of reasons to the applicant including characteristic and relative advantages derived from the successful tenderer and a statement in that letter to the effect that all relevant facts and material had been considered. The Court granted adjournment in the present matter for the purpose of resolving any matter that could arise for the implementation of the present judgment. The Court held that the reasons provided by the respondent were vague, inadequate and could not help the Court to assess the validity of the decision. The Court found that the reasons failed to promote transparency required under recital 3 of the Council Directive 89/665/EC. The Court opined that where the procurement awards were given on quantitative criteria, it was sufficient to give scores alone; however, where the qualitative criteria were adopted, there was a heightened duty to give detailed reasons outlining the shortcomings of the failed tenderer and advantages of the preferred tender. The Court in consonance with various EU Directives, which imposed an obligation to give a summary of reasons in order to achieve transparency and non-discrimination, held that for an effective administrative decision-making, reasons played an important role.

JUDGMENT of Mr. Justice Richard Humphreys delivered on the 15th day of February, 2016
1

When a public authority awards a contract, it is required by Irish and EU law to give the unsuccessful tenderers the reasons for its decision. But what level of reasons is required? Given that the number of contracts awarded by Irish public authorities probably runs into the thousands annually, it is interesting to note that the question of level of reasons required does not appear to have been fully addressed in previous Irish decisions. There is some European authority on the question, not all of it appearing to be entirely consistent, and I will attempt to synthesise it later in this judgment.

Facts
2

On 21st October, 2014, Kildare County Council published a contract notice seeking tenders for engineering consultancy services in relation to the design and delivery of the new Athy southern distributor road. The invitation to tender set out a methodology for the assessment of tenders, and criteria on which the tenders would be scored. These criteria also appear verbatim in the notification from the council to the applicant following the conclusion of the tendering process. Mr. Eoin McCullough, S.C., who appeared (with Ms. Catherine Donnelly, B.L.) for the respondent, described the criteria in the invitation to tender as ' extremely detailed'. While it is possible to say that the criteria may provide more detail than some of the other tender criteria which have been put before the court in relation to processes carried out by other authorities, to describe them as 'extremely detailed' seems to me to be a considerable overstatement.

3

The deadline for receipt of requests to participate was 28th November, 2014. The applicant company, which is a provider of such consultancy services to entities including public authorities, made a submission to the council to participate in the process.

4

On 9th December, 2014, the applicant received a letter from the respondent dated 5th December, 2014, notifying it that its application had been successful in qualifying for stage 2 of the competition which was a ' request for tender'. The applicant was also notified that the overall score received in relation to its request to participate was one hundred marks out of a maximum of one hundred. The deadline for submission of completed tenders was 11th March, 2015. The applicant complied with this deadline.

5

At some point during the process, a date as to which Mr. McCullough had not received instructions, but obviously prior to the announcement of the scores, the council decided, without any basis in the invitation to tender, to change the marking scheme without any apparent notice to the tenderers prior to the submission of their tenders, and substitute a completely different marking scheme. The original scheme envisaged that the winner under a particular criterion would be given 100% under that criterion and runners-up would receive a commensurate score in proportion to their score relative to the winner under that heading. This system painted with a narrow brush and allowed for quite a degree of fine distinction between particular tenderers in relation to any given criterion. The new marking scheme was a much more crude one whereby scores in each criterion were simply marked as excellent, very good, or good and so on, attracting marks of 100%, 80%, 60% and so on respectively. Clearly the new, cruder, scheme created much more subjectivity and a much greater potential for a clear gap to be created between a preferred tenderer and a runner-up. Instead of gradual gradations of loss of marks, a runner-up could experience a sudden drop in scores in increments of 20%. The council's lack of entitlement to change the marking scheme has not been pressed in argument as a ground to quash the competition result, presumably because this action was only commenced after the contract was signed. In principle, such a radical departure from the published scheme would be fatal to the award in a case where the challenge was initiated during the standstill period. In the present case, what is in issue is rather the extent of the reasons, but the fact that the scores announced departed so markedly from the published scoring system is a factor that I can take into account in assessing the adequacy of the reasons actually given.

6

The respondent then assessed and, using the new, unpublished and apparently uncommunicated, system, scored the four tenders that were received for the final stage, of which the notice parties were the successful tenderer (by way of a joint venture), and the applicant one of the three unsuccessful tenderers. Of importance in the case is the fact that the applicant's tender was more competitive on price than the successful tenderer, by a significant margin. Thus as far as the applicant was concerned, the decision turned on qualitative rather than quantitative assessment.

7

The respondent issued a ' notification of award decision' by letter dated 2nd April, 2015, to the applicant. This notification informed the applicant that it was unsuccessful in the competition, identified the successful tenderer and the marking scores, under the new marking system, and purported to set out reasons. The reasons were a combination of a repetition of the criteria, a repetition of the scores but phrased in terms of ' good', 'very good', and so on, and a handful of additional words, 16 in total, which contained a vague and general reference to the manner in which the preferred tenderer was superior in qualitative terms to the applicant. Despite being ahead on price, the applicant was held to be behind on quality by a relatively narrow margin.

8

The applicant has helpfully also made available to the court (not exhibited, but admitted by agreement of the parties) copies of the notification letters sent to the other two unsuccessful tenderers. A comparison of the three notification letters is instructive.

9

The applicant, which was in second place in the competition, scored lower than the preferred tenderer on criterion A1. The 'reasons' were that ' Your response to this criterion was of a good standard however compared to the successful tenderer it lacked sufficient specific detail on new studies and reports that would be required going forward.'

10

The third placed tenderer received a letter with precisely the same formula except with the words ' very good' instead of ' good'. The fourth placed tenderer received an identical formula to the applicant.

11

On criterion A2, the applicant was told: ' Your response to this criterion was of a very good standard however the successful tenderer provided more...

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