Word Perfect Translation Services Ltd v The Minister for Public Expenditure and Reform
| Jurisdiction | Ireland |
| Judge | Mr. Justice Twomey |
| Judgment Date | 02 February 2022 |
| Neutral Citation | [2022] IEHC 54 |
| Docket Number | [2021/556JR] |
| Year | 2022 |
| Court | High Court |
[2022] IEHC 54
[2021/556JR]
THE HIGH COURT
COMMERCIAL
JUDGMENT OF Mr. Justice Twomey delivered on the 2nd day of February, 2022
This is a case in which the applicant, a supplier of Irish translation services (“Word Perfect”), challenges the legality of a State tender whereby the suppliers are obliged not to sell below a certain price for those translations (11 cents per word). Word Perfect also claims that a turnover requirement for tenderers should be raised rather than lowered.
It may seem surprising that a supplier would object to a minimum price below which it cannot sell its services and that it would object to a turnover being too low (since the more usual objection is that a high threshold requirement prevents smaller suppliers from tendering). However, Word Perfect relies on competition law to claim that if a group of suppliers sought to fix a minimum price it would be regarded as a breach of the EU general principle of free competition and that it is also anti-competitive for a purchaser to fix a minimum price below which he will not pay, in buying the services.
As regards the turnover requirement, Word Perfect, which is the leading supplier of Irish translation services to the State, claims that it is unlawful that smaller suppliers (with turnovers of just €40,000 or above) should be able to compete, in this tender for contracts with an annualised value of €23,000, with other more financially robust suppliers like Word Perfect (which has a turnover of €867,000), as this, it says, breaches the EU general principle of proportionality. Word Perfect also claims that the method of allocating the contracts (i.e. by rotation) to suppliers who are accepted onto the framework breaches the general principle of equality.
The State claims that it inserted these terms in the tender to increase participation by small and medium sized enterprises (‘SMEs’) in the tender process and to increase the quality of the Irish translation services.
However, a preliminary issue was raised regarding the eligibility of Word Perfect to challenge the legality of the tender in the first place. In this regard, it is not disputed that for an applicant to be entitled to challenge an award of a contract under a public procurement process, it must, save in exceptional circumstances, have submitted a tender for that contract. However, the question at issue here is whether the same pre-condition applies where a challenge is made to the legality of the tender documents, as distinct from a challenge to an award of a contract.
The background to this issue is that public bodies are obliged by the Official Languages Act 2003 to ensure that various public communications are translated into Irish. These services had been previously provided pursuant to the public procurement process under the 2016 Framework Agreement for the provision of those services (the “2016 Framework”), which framework expired on 3rd July, 2021.
The replacement framework for the public procurement of Irish language translation services (the “2021 Framework”) is worth €10 million over its four-year term, and it is being challenged in these proceedings by Word Perfect.
This challenge (Record No. 2021/556JR) by Word Perfect to the 2016 Framework seeking tenders for Irish language translation services was heard by this Court during the week beginning 18th January, 2022.
A separate challenge, on different grounds, by Word Perfect to the framework seeking tenders for interpretation services (for foreign languages) was heard by this Court during the week beginning 11th January, 2022 ( Word Perfect v. Minister for Public Expenditure and Reform, Record No. 2020/432JR). This other challenge was referenced by Word Perfect in these proceedings, in the context of its defence to the claim that it is not eligible to bring this challenge.
In those other proceedings, Word Perfect claims, inter alia, that the tender for interpretation services for foreign languages is also unlawful. One of the grounds that it relies upon is that the State is discriminating against it on the basis that it is too litigious. In this regard, that State has submitted that the Word Perfect has brought at least five challenges to other State tenders in recent years, in addition to the two current challenges to the Irish language translation services tender and the foreign language interpretation tender. As noted below, Word Perfect claims that the State has not challenged its eligibility to challenge the tender for interpretation services of foreign languages, and it claims that this fact supports its argument that the State should not be entitled to challenge its eligibility in these proceedings.
Word Perfect challenges the Request for Tenders dated 12/05/2021 to establish a Multi Supplier Framework Agreement for the Provision of Irish Language Translation Services which was published on 15th May, 2021. This Request for Tender seeks tenders in respect of the translation of three lots, Lot 1 (Standard Text), Lot 2 (Technical Text), and Lot 3 (Legal Text).
The respondent is the Minister for Public Expenditure and Reform as the tender was issued by the Office of Government Procurement (“OGP”), which operates under the Minister. The tender is being issued for the benefit of numerous public bodies (e.g. an Garda Síochána, the Courts Service, the HSE, etc.) who are expected to utilise the 2021 Framework Agreement for obtaining Irish language translation services. In these circumstances, it is proposed to refer to the respondent to the proceedings as the “State”.
There is a very significant difference between a challenge to the legality of the public procurement process and a challenge to most other decisions by a State body.
First there is no requirement that a judicial review of a public procurement process must first obtain the leave of the court, which is the usual requirement for challenging the actions of a State body.
Secondly and more significantly, unlike most other challenges to the actions of the State, once proceedings are instituted to challenge a public procurement process, regardless of the merits of the challenge, the consequences are hugely significant. This is because the whole tender process is effectively stalled since there is an automatic suspension on any contracts being signed pursuant to Regulation 8(2) of the S.I. No. 130 of 2010 European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010 (the “Remedies Regulations”).
Thus, once Word Perfect instituted these proceedings, on the 11th June, 2021, to challenge the Request for Tenders in this case, the tender process for Irish language translations effectively came to a halt. In this case of course, what is being stalled is the statutorily mandated (under the Official Languages Act 2003) translation of documents into Irish, bearing in mind the status of the Irish language under the Constitution (Article 8.1). An example of the importance of what is at stake is illustrated by the fact that Acts of the Oireachtas must be printed and published in both Irish and English simultaneously. As noted below, this adds a degree of significance and urgency to this case.
The grounds for challenge can be summarised as follows:
First, Word Perfect claims that the terms of this Request for Tender are unlawful because they provide for contracts, which are worth between €25,000 and €100,000 and fall within Lot 1 (Standard Text), to be awarded by rotation to the suppliers who are admitted to the Framework.
This arises because under the 2021 Framework, the first contract in time to be awarded is awarded to the supplier who obtained first place in the competition to be admitted to the Framework, with the second contract in time to the next in line, and so on. If say there were 11 contracts and 10 suppliers admitted to the Framework, then the first placed supplier would get the 11th contract as the process repeats itself once the first round of contracts is complete.
In this regard, Word Perfect claims that if there were say ten suppliers admitted to the Framework and say 55 contracts awarded over the four-year period of the 2021 Framework Agreement, the supplier with the most marks would get 6 contracts of random value, while the second placed, third placed, fourth placed and fifth placed suppliers would also get 6 contracts of random value. As there are only 55 contracts, it would mean that the sixth to tenth placed suppliers would get 5 contracts of random value.
Word Perfect points out that there is no guarantee that the supplier in first place will get the highest value contracts. This is because, while the contracts are allocated to the suppliers in order of merit, in the sense that the first placed supplier will get the first contract to be awarded (and when the process is repeated it will always get the first contract on the second and subsequent rounds), nonetheless the value of each contract is random (save that they will be worth between €25,000 and €100,000).
On this basis, Word Perfect claims, inter alia, that the Request for Tender breaches the general principle of EU law of equal treatment, since it claims that a successful tenderer who is lower ranked in the competition could end up with contracts which are higher in value than those of a higher ranked tenderer, thereby unlawfully treating tenderers in different situations the same.
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