Somague Engenharia SA & Wills Bros Ltd v Transport Infrastructure Irl

• Jurisdiction: Ireland
• Judge: Ms.Justice Baker
• Judgment Date: 13 October 2015
• Neutral Citation: [2015] IEHC 723
• Court: High Court
• Date: 13 October 2015

Somague Engenharia SA & Wills Bros Ltd v Transport Infrastructure Irl

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

APPLICANT

AND

TRANSPORT INFRASTRUCTURE IRELAND

RESPONDENT

[2015] IEHC 723

[No. 21 J.R./2015]

THE HIGH COURT

Local government – Procurement of contract – Damages & Restitution – Judicial review – Art. 55 of utilities directive 2004/17/EC – The European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010 – Practice & Procedures – O. 40, r. 1 of the Rules of the Superior Courts – Cross examination of witness – Fairness of process

Facts: Following the initiation of the claim for damages by the applicants against the defendants for loss of contract, the applicant now sought an order to cross examine the person involved in the evaluation of tender documentation on the ground that breakdown of sub-criteria into various sub tests and rebundling them was not permissible with respect to the tender criteria themselves.

Ms. Justice Baker granted an order for the cross-examination of the concerned person to the extent of methodology disclosed in working notes, test applied by him in the testing of tender and interplay between his working notes and factors indentified in those notes and how they related to the disclosed competition criteria. The Court observed that cross-examination would be permitted if there were material conflicts of facts, the resolution of which was essential for the final disposal of the case. The Court held that the Court should exercise judicial discretion with procurement cases with utmost caution and the party seeking the relief must cite each and every ground upon which the relief was sought. The Court held that art. 55 of the Utilities Directive 2004/17/EC mandated that there should be transparency while awarding contract and the tenderers should be informed of the criteria and arrangements which would be applied. The Court held that concerned person scores did not reflect in the final score yet the final score of the team was increased two fold, thereby raising questions over the methodology applied by the respondents in making decision to award the contract, and hence it would be appropriate to cross-examine that person but on limited grounds.

1 JUDGMENT of Ms.Justice Baker delivered on the 13th day of October, 2015

2 1. These proceedings concern the tendering process for the contract for the design and construction of the extension of approximately 5.6kms of the Dublin City Luas Light Railway. The applicants contend in this judicial review that the evaluation of the tender documentation in respect of the contract was vitiated by a number of serious errors and breach of the rales 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, and claim inter alia that as their tender was awarded a significantly lower price than that of the winning bidder, that the errors and breach of the procurement rules on the part of the respondent had the effect that they lost the contract.

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

4 3. This judgment relates to an application on the part of the applicants pursuant to 0. 41 r. 1 and/or the inherent jurisdiction of the court to require Marcello Corsi, who was intrinsically involved in the evaluation process and who has sworn a number of affidavits in these proceedings, to attend for cross examination on those affidavits.

5 4. The application to cross examine Mr. Corsi is contested.

Background

6 5. An order was made by me amending the title of the proceedings to reflect the fact that as of 1 ^st August, 2015 the functions, assets and liabilities of the Railway Procurement Agency are transferred to Transport Infrastructure Ireland.

7 6. The applicants tendered for the construction of the 5.6kms of the Luas line and the tendering process involved, as these matters often do, a long period of pretender negotiation and preparation. The respondent opted for a so called "MEAT" (Most Economically Advantageous Tender) type of tender in respect of which points were given, as to 55% of the total marks in respect of the tendered price, and 45% in respect of other qualitative criteria.

8 7. One of the relevant criteria set out in the conditions of tender was "methodology" containing a number of sub-criteria, the relevant sub-criteria being the method proposed for the constructing of the tie-ins of the new Luas cross city line with the existing Red Line at the O'Connell Street and Marlborough Street junctions. This sub-criteria was worth 10 marks out of the 100 total marks available, and it was in respect of this sub-criteria that the applicants scored significantly worse than the winning bidder.

9 8. The applicants have accepted that their application is primarily one for damages and no application has been made that the contract, which has already been awarded to the preferred bidder, be suspended pending the determination of these proceedings.

10 9. The applicants have filed a lengthy statement of grounds but the matters now before me arise from a number of complaints which I now summarise:-

11 a a. that the evaluators applied undisclosed or impermissible criteria,

12 b b. that the evaluators misapplied the stated award criteria,

13 c c. that the evaluators made a manifest error in assessing the Red Line tie-in (RLTI), and

14 d d. that the evaluators in particular considered matters which were not relevant to the evaluation stage of the process.

15 10. Mr. Corsi was one of the evaluators who evaluated the RLTI and his evaluation notes which have been furnished in the course of discovery are to a large extent the focus of this application.

The Directive

16 For the purposes of determining this application I must briefly outline the provisions of the Utilities Directive 2004/17/EC, which was transposed into Irish law by S.I. No. 50/2007, the European Communities (Award of Contracts by Utility Undertakings) Regulations 2007. A number of principles contained in the Directive may come to inform my decision and the extent to which those principles as to the application of the tender process might guide me in my consideration of this application is one that I will return to later.

17 11. The Directive identified a number of general principles with regard to the process leading to the award of public contracts, namely non-discrimination, transparency of competition, proportionality, objectivity and effective judicial protection.

18 12. Article 55 of the Directive sets out a number of objective criteria to ensure 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".

The European aim of genuine competition

19 13. The Utilities Directive is one concrete realisation of the principle of genuine competition between entrepreneurs in member states of the European Union. Transparency, fairness and objectively ascertained criteria are the particular ways in which the Directive mandates that fair competition be achieved in the awarding of public contracts within the Member States. As with many European principles, this objective is required to be protected by the national courts by effective remedies which are equivalent to those that are available in other Member States. Fennelly J. in SIAC v. Mayo County Council [2002] 3 IR 148 took the view that a judicial review in procurement cases might not always call in aid the principles of review of domestic decision makers. As he said at para. 83:

"I do not think, however, that the test of manifest error is to be equated with the test adopted by the learned trial judge, namely that, in order to qualify for quashing, a decision must "plainly and unambiguously fly in the face of fundamental reason and common sense." It cannot be ignored that the Advocate General thought the test should be "rather less extreme." Such a formulation of the test would run the risk of not offering what the Remedies Directive clearly mandates, namely a judicial remedy which will be effective in the protection of the interests of disappointed tenderers."

20 He went on to say at para. 85 that the principles operative in domestic judicial review may be overly narrow to achieve this end:

"The courts must exercise their function of judicial review so as to make the principles of the public procurement directives effective. In the case of clearly established error, they must exercise their powers. The application of these principles may not, in practice, lead to any real difference in result between the judicial review of purely national decisions and of those which require the application of Community law principles."

21 14. Implicit in this decision is a recognition that there can be in judicial review of procurement decisions a standard or test which can differ from that found in O'Keeffe v. An Bord Pleanaacute;la [1993] 1 IR 39, bearing in mind the wide margin of discretion allowed to national courts, and provided the remedy is both effective and equivalent in the light of Community principles.

Order 40, rule 1

22 15. Order 40, rule 1 of the Rules of the Superior Courts permits a party with leave of the court to serve...