Whelan Group (Ennis) Ltd v Clare County Council
| Jurisdiction | Ireland |
| Judge | Mr. Justice Kelly |
| Judgment Date | 09 March 2001 |
| Neutral Citation | [2001] IEHC 33 |
| Docket Number | [2000 No. 79 MCA] |
| Court | High Court |
| Date | 09 March 2001 |
[2001] IEHC 33
THE HIGH COURT
BETWEEN
AND
Local Government - Public procurement - Award of contract - Road improvement works - Selection criteria - Whether method of selection by local authority fair - Whether local authority infringed European law.
The applicant challenged the method by which the respondent had selected candidates for the award of a roads improvement contract. The applicant alleged the method involved was discriminatory. Kelly J held that the criteria employed by the respondent were not discriminatory and dismissed the proceedings.
JUDGMENT of Mr. Justice Kelly delivered the 9th day of March, 2001
Major road improvement works are planned for the Newmarket-on-Fergus area of County Clare. These improvements will involve the construction of 9 kilometres of dual carriageway, 3 kilometres of single carriageway, 5 bridges and 3 underpasses. The value of these works is estimated at £25 million and the work will take 28 months to complete.
In these proceedings, the applicant (Whelan Group) challenges the manner in which the respondent (the County Council) has implemented the provisions of E.U. Directive 93/37 (the Directive) concerning these proposed works.
It is common case that the County Council opted to operate the restricted procedure provided for in the Directive. No complaint is made in respect of that decision. However, Whelan Group says that certain of the technical specifications of the preselection criteria in the restricted procedure as operated contain discriminatory requirements. In particular, they contend that the requirement that a contractor shall, as a minimum, have satisfactorily completed an individual road works project to the value of £10 million, excluding VAT, within the period 1995–1999 is discriminatory. This requirement, it is said, has the effect of insuring that only the largest construction undertakings within the European Union or the State could compete for this work. This, it is said, infringes principles of E.U. Public Procurement Law and in particular those which prohibit discrimination, inequality of treatment, lack of transparency and lack of proportionality.
In due course I will examine these contentions but first it is necessary to set out the background to the matter in some detail.
In February, 2000, the County Council published in the Official Journal and in the Irish Independent a contract notice in respect of the proposed works. That notice made it clear that the County Council was adopting the restricted procedure for the award of the contract.
Paragraph 10 of the notice, which dealt with qualifications, read as follows:-
"The suitability of contractors, not excluded under Article 24 of Council Directive 93/37/EEC, shall be determined in accordance with the criteria referred to in Articles 26–28 of Council Directive 93/37/EEC. Applicants will be required to complete the prequalification questionnaire, which is available from the address stated in 6(b). The questionnaire sets out the minimum level of technical and economic capacities required for those wishing to participate. Information required concerning the contractor's financial and economic standing and technical knowledge and ability will be given in the prequalification questionnaire."
The contract notice also made it clear that not less than five applicants would be invited to tender, following the pre-qualification process. Whelan Group obtained the pre-qualification questionnaire from the County Council's consulting engineers and, having completed it, returned it to the County Council.
The pre-qualification questionnaire gave the reason for adopting the restricted procedure by reference to the financial scale and technical complexity of the project. It was said that the use of the restricted procedure was to ensure that all tenderers invited to tender would be of adequate financial and economic standing and have the technical capability of carrying out the works. Detailed evidence is contained in the affidavits as to the background to the adoption of the restricted procedure. It is not necessary for me to explore this aspect of the matter further since Whelan Group makes no complaint in this application as to the use of the restricted procedure.
The County Council has, in conjunction with the National Roads Authority, been involved in the design and construction of roads in Co. Clare in accordance with the National Plan for Roads. In co-operation with a number of other local authorities in the region, a regional design office was set up in Co. Limerick. The idea behind this was to establish a group of professionals to assist in work relating to national primary roads. A steering committee was established once a particular project was identified. The committee involved in the project in suit was comprised of a representative of the consulting engineers, a regional manager from the National Roads Authority, a representative from the Regional Design Office and a senior engineer from the County Council. This committee recommended the adoption of the restricted procedure. But it went further. It recommended the adoption of a minimum criterion relating to the value of other projects carried out by potential tenderers. This gave rise to the adoption of a condition that a contractor would be required, as a minimum, to have satisfactorily completed an individual road works project to the value of £10 million pounds within the period 1995–1999. In this regard it is to be noted that the advice which had been received from the consulting engineers was to the effect that a potential tenderer ought to have completed at least one road works project with a value exceeding £15 million pounds. This advice was not accepted. In adopting the requirement which is contested in these proceedings a number of matters were taken into account. They were that
(a) the scheme was similar in value and scale to the Limerick South Ring Road Phase I contract which contained similar criteria
(b) the custom and practise of the National Roads Authority was to apply a factor of ½ to 1/3 to the estimated value of the project and
(c) it was considered that a contractor who had not carried out works to the specified value could have such difficulty in obtaining a bond that the project might be delayed.
Having decided to apply the stipulation in question the County Council prepared a pre-qualification questionnaire which had to be answered by all potential tenderers. In the introduction to it, it pointed out that because of the financial scale and technical complexity of the project the invitation to tender was by means of the restricted procedure so as to ensure "that all tenderers invited to tender shall be of adequate financial and economic standing and have the technical capacity of carrying out the works".
The questionnaire also drew attention to the fact that any contractor who did not comply with the specified minimum pre-qualification criteria would be excluded from further consideration.
Under the legend "Works Carried Out" the questionnaire provided as follows:-
"The minimum relevant experience shall be judged on the Contractor's record during the period 1995 to 1999 inclusive. Evidence of that record shall be furnished, with the attached pre-qualification questionnaire. The Contractor shall, as a minimum, have satisfactorily completed:
Roadworks project, value exceeding IR£10,000,000, excl. VAT for any one individual project".
Section D(1) of the questionnaire asked the contractor to "give details of the Candidates experience on up to five Road and Bridge civil engineering contracts, similar in type to this Project, which the Candidate has directly carried out in the years 1995 to 1999 inclusive".
In response to that question the Applicant answered as follows:-
"Project Title: Road and Bridge Works
Description of Contract: to the value of IR£11,900,000
Date Contract Awarded: in 1999"
In section D 2 the contractor was asked:-
"Has the Candidate undertaken building and civil engineering project or projects, within the years 1995 to 1999 inclusive comprising of:
Roadworks project of value not less than IR£10,000,000 exclusive of VAT on an individual project?"
Whelan Group answered yes to that question and indicated that the work consisted of road and bridge works for the County Councils of Cork, Limerick and Offaly to the value of IR£11,900,000.
On examination of the questionnaire, however, it was discovered that this was an incorrect answer because Whelan Group had not carried out an individual project to the value of not less than £10,000,000. The largest contract value of works carried out had a tender price of £3.9 million pounds (exclusive of V.A.T.). Because of this, the County Council took the view that the minimum criteria specified in the questionnaire had not been met and consequently did not invite Whelan Group to submit a tender. It is because of that that these proceedings have been brought.
Whelan Group in its amended statement grounding the application specified the following grounds:-
"The Respondent has applied the criteria complained of in an arbitrary and discriminatory manner and has breached the principle of equality of treatment underlying the Directive.
The exclusion of the Applicant from the list of contractors deemed to have the technical capability to...
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