Somague Engenharia S.A. v Transport Infrastructure Ireland

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 28 June 2016
• Neutral Citation: [2016] IEHC 435
• Court: High Court
• Docket Number: [2015 No. 21 JR]
• Date: 28 June 2016

IN THE MATTER OF THE REVIEW OF THE AWARD OF A PUBLIC CONTRACT PURSUANT TO THE EUROPEAN COMMUNITIES (AWARD OF CONTRACTS BY UTILITY UNDERTAKINGS) (REVIEW PROCEDURES) REGULATIONS 2010

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

BETWEEN

SOMAGUE ENGENHARIA S.A. & WILLS BROS LTD

APPLICANTS

AND

TRANSPORT INFRASTRUCTURE IRELAND

RESPONDENT

[2016] IEHC 435

[2015 No. 21 JR]

THE HIGH COURT

Local government – Award of public contract – European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010 – Directive 2004/17/EC – Evaluation of criteria for award of contract – Judicial review

Facts: The applicants by way of the present judicial review application sought an order for setting aside the decision of the respondent for awarding a public contract for the construction of an extension of Dublin Light Railway to the successful tenderer. The applicants argued that the respondent breached certain Regulations and Directives relating to the procurement process as the criteria adopted by the respondent for the assessment of tender submission was flawed.

Ms. Justice Baker refused to grant the desired reliefs to the applicants. The Court held that while reviewing the procurement decision, it must ascertain whether there was an application of an impressible criterion by the public authority or failure to apply the identified criterion in the evaluation procedure. The Court found that there was no manifest error in the decision to award contract to the successful tenderer as it satisfied the conditions of tendering being the most economically advantageous tender. The Court held that there was full and detailed engagement of each component of evaluation system by the respondent and thus the respondent had acted in accordance with the principles of equality, non-discrimination and transparency as enshrined under art. 10 of the Directive 2004/17/EC. The Court found that since the conditions of tendering required each tenderer to submit a document describing their proposed method for construction the tie-in of the new cross -city line with the existing line, the reasonable tenderer for that purposes would be a tenderer with knowledge, expertise and sufficient information in relation to railway design. The Court observed that since the assessment procedure was a qualitative assessment, it could not be said that the named member of the evaluation team applied an undisclosed sub-criteria when that member further fragmented the particular element of each tenderer for his intellectual engagement with the material.

JUDGMENT of Ms. Justice Baker delivered on the 28th day of June 2016.

1 These proceedings concern the tendering process for the contract for the construction of an extension of approximately 5.6kms to the Dublin Light Railway, Luas. The applicants contend that the tender competition in respect of the contract was vitiated by a number of serious errors and breach of the rules relating to public procurement. The applicants are a joint venture established for the purposes of tendering for the contract, and came second in the competition.

2 The successful tenderer was Sisk Steconfer J.V., ('SSJV'), a joint venture formed by the Irish construction company, John Sisk and Son Limited and Steconfer S.A., a Portuguese based railway construction company.

3 The applicants claim inter alia that their tender had a significantly lower price than that of the winning bidder, and that the errors and breach of the rules on the part of the respondent had the effect that they lost the contract. The parties agreed that I would first try the substantive question and stand over issues of remedies and/or damages, if any.

4 The application is fully contested and is brought pursuant to the provisions of O. 84 A of the Rules of the Superior Court as amended.

5 This judgment deals with the substantive claim in the judicial review. I already delivered judgment on the 13th October, 2015 in relation to an application by the applicants to cross-examine the deponent of an affidavit sworn on behalf of the respondent: Somague Engenharia S.A. & Wills Bros. Ltd. v. Transport Infrastructure Ireland [2015] IEHC 723.

Background

6 The applicants are limited liability companies, the first applicant having its registered offices in Portugal, and the second in Foxford, County Mayo. Both applicants are involved in the business of civil construction and engineering contracting. The applicants formed a joint venture for the purpose of tendering for the contract the subject matter of this judicial review. The respondent contracting authority was the Railway Procurement Agency ('RPA'), the functions, assets and liabilities of which were transferred to Transport Infrastructure Ireland Limited on the 1st August, 2015. The respondent is a body corporate established pursuant to the Transport (Railway Infrastructure) Act, 2011 and has inter alia the function of providing or securing the provision of light railway and metro railway infrastructure in Ireland. The respondent is a contracting entity for the purposes of S.I. No. 50 of 2007 The European Communities (Award of Contracts by Utility Undertakings) Regulations 2007 ('The 2007 Regulations') and is listed as a contracting entity in Annex IV of Directive 2004/17/EC (The Utilities Directive) which co-ordinates the procurement procedures of entities operating in the water, energy, transport and postal services. I refer to the contracting authority as the respondent in this judgment, unless for reasons of sense I require to refer to the RPA.

7 By public contract notice published in the Official Journal of the European Union on or about the 28th September, 2013, the RPA invited tenders for the design and construction of a light railway extension of Dublin's Luas light railway system of approximately 5.6 km in length. The new railway lines were to run through the city centre and inner city and were to link with the existing Luas Red and Luas Green lines. The estimated value of the contract was in the region of a hundred million euro. Interested parties were invited to complete a questionnaire to qualify for invitation to tender.

8 Further to the contract notice the RPA issued the Conditions of Tendering in or around the 3rd April, 2014.

9 Five candidates completed questionnaires in response to the OJEU notice. All were joint ventures between Irish companies and either Spanish or Portuguese companies. As all satisfied the prequalification criteria, all were invited to tender. The tenders were invited in accordance with the documents made available by way of an e-data room, which was opened to the tenderers on the 3rd April 2014. The documents provided to the tenderers incorporated by reference the Conditions of Tendering, the Works Requirements, and the Public Works Contract applicable to public building contracts of the relevant type.

10 The applicants submitted a tender for the contract in accordance with the competition rules on the 18th September, 2014.

11 The evaluation team comprised 11 people, each having experience and expertise in the areas relevant to the criteria under review. The evaluation process was done in some cases initially by sub groups of specialist assessors. The details of the individuals, their qualifications and expertise are set out in the affidavit of Tony Redmond, sworn on the 10th April, 2015.

12 The applicants were formally notified of the result of the competition by letter dated the 17th December, 2014 ('the debrief letter'). The applicants sought a de-brief meeting with the RPA and two meetings were held, on the 23rd December, 2014 and a more formal meeting on the 7th January, 2015.

13 The reasons for the marks are to be ascertained from the letter and the reasons given at these meetings.

14 The applicants plead that the respondent breached certain Regulations and Directives relevant to the procurement process, including the, Utilities Regulations, S.I. No. 50/2007, Directive 2004/17, Directive 92/13EC (The Remedies Directive), European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010 ( S.I. No. 131 of 2010), and the general principles of European law and national public law.

15 Because of the complexity of the facts, it is more convenient if I now outline the applicable legal principles in a procurement law judicial review.

The Directives

16 The principles of equality, non-discrimination and transparency are central to the philosophy of the Directives of encouraging open competition between citizens of, or companies registered in, Member States. The requirement of transparency is to ensure that persons engaging in a tender process know the evaluation criteria in advance of submitting a tender for a public works or utilities contract, and know how these criteria were applied by an evaluation team to an individual tender.

17 The Utilities Directive was transposed into Irish law by the Utilities Regulations.

18 Article 55 of that Directive sets out a number of objective criteria aimed at ensuring compliance with these principles in the process of the award of a contract, inter alia with a view to ensuring 'the necessary transparency to enable all tenderers to be reasonably informed of the criteria and arrangements which will be applied', and a means by which the tenders may be 'compared and assessed objectively'. Equality and transparency is required so as to enable a tenderer to formulate a proposal, and to ensure that the assessment of a proposal by the contracting authority was fairly and transparently done.

19 The Utilities Directive is one concrete realisation of the principle of genuine competition between entrepreneurs in Member States of the European Union. As with many European principles, this objective is required to be protected by the national courts by effective...