Veolia Water UK Plc and Others v Fingal County Council, Respondent (No. 1)

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice Clarke
Judgment Date30 June 2006
Neutral Citation[2006] IEHC 137,[2006] IEHC 240
Docket Number[2006 No. 83 JR],[2006 No. 83 JR & 2006 No. 16 COM]
Date30 June 2006

[2006] IEHC 137

THE HIGH COURT

[No. 83 JR/2006]
VEOLIA WATER UK PLC & ORS v FINGAL CO COUNCIL
IN THE MATTER OF COUNCIL DIRECTIVE 92/13/EC AND IN THE MATTER OF THE
EUROPEAN COMMUNITIES (REVIEW PROCEDURES FOR THE AWARD OF
CONTRACTS BY ENTITIES OPERATING IN THE (WATER, ENERGY, TRANSPORT AND
TELECOMMUNICATIONS SECTORS) REGULATIONS 1993 (S.I. No. 104 of 1993)

BETWEEN

VEOLIA WATER UK PLC, BOWEN WATER TECHNOLOGY LIMITED, SOUTH MIDLAND CONSTRUCTION LIMITED AND CLG DEVELOPMENTS LIMITED, TRADING AS THE VEOLIA WATER CONSORTIUM
APPLICANTS

AND

FINGAL COUNTY COUNCIL
RESPONDENT

EEC DIR 92/13

EUROPEAN COMMUNITIES (REVIEW PROCEDURES FOR THE AWARD OF CONTRACTS BY ENTITIES OPERATING IN THE WATER ENERGY TRANSPORT & TELECOMMUNICATIONS SECTOR & PUBLIC WORKS CONTRACTS) REGS 1993 SI 104/1993

RSC O.84(A) r4

MATRA COMMUNICATIONS SAS v HOME OFFICE 1999 3 AER 562

JOBSIN CO UK PLC v DEPARTMENT OF HEALTH 2002 1 CMLR 44

HOLLERAN v SEVERN TRENT WATER LTD 2004 WEHC 2508

EUROPEMBALLAGE CORPORATION & CONTINENTAL CAN CO INC v EC COMMISSION 1973 ECR 215

OLBRECHT v COMMISSION 1989 ECR 2643

COMMISSION v SOCURTE 1997 ECR 1

SANTEX SPA v USSL 2003 ECR 1877

RSC O.84(A)

WHITE v DUBLIN CITY COUNCIL 2004 1 IR 545

LOCAL GOVT (PLANNING & DEVELOPMENT) ACT 1963 S82(3B)(A)(I)

PLANNING & DEVELOPMENT ACT 2000

DEKRA EIREANN TEORANTA v MIN FOR ENVIRONMENT & SGS (IRL) LTD 2003 2 IR 270 2003 2 ILRM 210

PRACTICE AND PROCEDURE

Judicial review

Public procurement - Contract - Tender -Preliminary issue - Delay - Whether good reason for extending time period - Relevant date - State of knowledge - European Union law - Rules of the Superior Courts 1986 (SI15/1986), O 84(A), r 4 - Extension of time granted (2006/83JR - Clarke J - 2/5/2006)[2006] IEHC 137, [2007] 1 IR 690, [2007] 1 ILRM 216 Veolia Water Consortium v Fingal County Council

The applicant was the unsuccessful tenderer for the award of a contract and sought to challenge the award on three grounds as to (a) the exclusion of provisional items in the ranking process (b) the requirement for a price for upgrade and (c) upgradeability of the successful tender. Trial on a preliminary issue was directed as to whether the applicant had complied with RSC O. 84(A)r. 4 and if not, whether good reason existed to extend such period.

Held by Clarke J. that it was not appropriate to extend time as to the first issue as the applicant bore responsibility for the failure to act promptly. Time would be extended in respect of the second ground as the respondent had failed to answer in a transparent fashion questions that would have assisted the applicant and no breach of the obligation to act expeditiously had occurred there. No reasonable grounds had been made out to extend time under the third category and submissions of counsel would be heard further in this respect.

Reporter: E.F.

1

JUDGMENT of Mr. Justice Clarke delivered 2nd May, 2006.

1. Introduction
2

2 1.1 This judgment concerns a preliminary issue which arises in substantive proceedings brought by the plaintiff consortium ("Veolia") against the defendant ("Fingal") arising out of the award of a contract for the survey, design and installation of a water metering system for non-domestic water for the four Dublin local authority areas ("the contract"). Fingal acted as the lead authority in relation to the award process. Veolia was an unsuccessful tenderer and seeks, in the substantive proceedings, to challenge the award on a number of grounds. However it is contended by Fingal that Veolia are out of time for bringing the challenge.

3

3 1.2 In that context by order of the 27th February, 2005, Kelly J. directed the trial of a preliminary issue in these proceedings in the following terms:-

4

2 "(1) As to whether the applicant has complied with the requirements of

5

O. 84(A) r. 4 of the Rules of the Superior Courts by making this application at the earliest opportunity, and in any event within three months from the date when the grounds for the application first arose;

6

(2) If not whether the applicant has demonstrated that there is good reason for extending such period."

7

This judgment is directed towards those issues. However, for reasons which will become apparent, it is necessary, in resolving those issues, to address, at least in general terms, the issues which arise in the substantive proceedings and in that context it is necessary to turn, firstly, to the background to those proceedings.

2. Background
8

2 2.1 The contract is designed to insure compliance with Ireland's obligations under E.U. law and the government's water pricing policy framework which, in accordance with E.U. law, and the "polluter pays" principle enshrined in that regime, requires charges to be levied in respect of the supply of water in certain circumstances. Thus local authorities are required to charge non-domestic customers for water and waste water services and to recover the full costs of providing such services to those customers. Local authorities are, therefore, required to achieve metering of the water supply in the non-domestic sector by 31st December, 2006.

9

3 2.2 The contract is concerned with implementing that obligation in respect of the four Dublin local authorities. The contract is of a very considerable value with the successful tender being at a price just under €50 million.

10

4 2.3 The relevant tender documentation required tenderers to price their tenders for a mix of what are described as "drive-by" and "fully fixed" meter reading technologies. In simple terms it would appear that it was anticipated that drive by technology (which involves the use of vehicles driving in the vicinity of the water user concerned and being in a position to pick up meter readings in that fashion) was likely to be less costly in terms of initial capital investment but might well involve higher running costs. There were, apparently, other perceived advantages and disadvantages of both the "drive-by" and "fully fixed" technologies. The principal perceived advantage of a fully fixed system was that it would allow more frequent meter reading without the need for the drive by of the location concerned. In those circumstances tenderers were required to submit what, in their view, amounted to the optimal mix of technologies. However the tender documents also required the submission of a price in respect of what were termed "provisional items" which included a requirement to put a price on the additional costs that would be involved for upgrading the optimal mix tendered on behalf of the tenderer concerned to a fully fixed solution.

11

5 2.4 Tenderers were to be evaluated on the basis of the most economically advantageous tender. Furthermore, and of relevance to the substantive proceedings, the tender documents entitled a tenderer who has submitted a compliant bid (that is to say a bid which was fully compliant with the requirements of the tender documentation) to also submit what was termed an alternative tender. In general terms it would appear that the purpose of permitting an alternative tender was that the tenderer could propose a solution which, at least to some extent, went outside certain of the compliance requirements of the tender documentation. It is, however clear, that, at a minimum, an alternative tender was required to meet the minimum performance requirements specified in the tender documents.

12

6 2.5 It would appear that only two tenderers (the successful tenderer and Veolia) submitted tenders. It would seem that both tenderers submitted a principal tender and two alternative tenders each so that there were three tenders each submitted by both groups. The Veolia tenders were submitted on 17th May, 2005. On 19th May, 2005, Veolia received a list of the total sums in respect of all tenders which specified that there were two compliant tenders (the Veolia tender in the sum of €56,659,877.35 and a competitor tender in the sum of €76,585,403.17.

13

7 2.6 It should be noted that at this time, as part of the tender evaluation process, a document was produced within the Fingal team conducting the evaluation which was called the "Tender Evaluation Procedures" document. This document was produced before the tenders were opened (which appears to have occurred on the 13th May). The document was internal to those involved in the evaluation process and was not made available to the tenderers. No complaint is, understandably, made about this fact in itself. However it should be noted that it was in the Tender Evaluation Procedures document that the decision not to include provisional items in the ranking process was first recorded.

14

8 2.7 The relevant letter also specified the amounts of four alternative tenders being the two additional tenders submitted on behalf of Veolia and two other additional tenders, one in the sum of €49,990,950.68 and the second in the sum of €78,871,911.02.

15

Having regard to the requirement that a party could only submit an alternative tender when that party had also submitted a compliant tender it is common case that the only reasonable inference to be drawn from the above communication was that there were, in substance, only two tenderers who had each submitted a compliant tender and two alternative tenders.

16

2 2.8 On the 6th September, Veolia received a letter from Fingal which informed Veolia that its tender had not been successful and that Fingal proposed awarding the contract to another tenderer. The relevant letter contained a table which set out what were described as the marks awarded against each of the award criteria in relation to both the Veolia tender and the successful tender. That table was in the following form:

Award Criteria

Maximum marks available

Marks awarded to your tender

Marks awarded to successful tenderer...

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