Devon’s deadline: Perils of e-tendering

In the current climate, securing profitable public sector work can be a lifeline for contractors. Firms will invest in the tendering and procurement process in this knowledge, and if a tenderer is not successful there may be a greater need than usual to challenge the decision on the basis of an alleged irregularity.

Such an issue arose in a dispute between JB Leadbitter & Co and Devon council, and was the subject of a court decision in May. Leadbitter submitted a tender for a four-year framework agreement referred to as the Construction Framework South West (CFSW). Devon council was acting on behalf of the participating bodies as well as managing the procurement and administration of the CFSW. The tender process was detailed and complex. The invitation to tender required documents to be supplied electronically to a secure portal. The extended deadline was 3pm on 26 January 2009. A minimum of four case studies had to be submitted to support a bid.

Leadbitter’s tender was submitted, but at 2.45pm some of its employees realised that the case studies had not been included and tried to submit them as well. However no additions to a tender already submitted to the secure portal was possible, and no case studies in any form were submitted prior to the deadline. They were submitted by email at 3.26pm.

Devon council rejected Leadbitter’s tender on the grounds that a complete version, including the case studies, had not been submitted in time.

Leadbitter sought an interim injunction and a claim for damages. It alleged that there had been a failure to comply with regulation 4(3) of the Public Contracts Regulations 2006 and that the council was in breach of enforceable community obligations to treat tenderers equally. It was incumbent on Devon council to comply with regulation 30 to select only on the basis of the most economically advantageous tender. It was also alleged that in rejecting the tender it had acted disproportionately.

The council argued simply that all procurement processes require a fixed deadline

All of these submissions were rejected by the court. It was accepted that Leadbitter’s failure to append its case studies to the rest of its file was an unintended technical error. The council argued simply that all procurement processes require a deadline that should not be extended. They had a responsibility to treat all of the tenderers fairly, equally and with a degree of transparency.

In responding to the issue of proportionality, the court noted that the error was on the part of Leadbitter. Also if Devon council possessed discretion it could not be compelled to exercise it.

This appears to be a harsh decision. Leadbitter will no doubt have spent much time in the preparation of its tender, and it also missed the opportunity of procuring work at a difficult time. Its disappointment was all the more understandable when it is considered that it discovered its error in time, but could not despatch the missing case studies to the secure portal, which required tenders to be supplied on a once-and-for-all basis.This, looked at objectively, must be a flaw in the procurement system.

It should have been possible for the omitted documents, belatedly, to be dispatched, so long as the deadline had not passed. Leadbitter was not the only contractor that encountered difficulty with the submission of a tender. Of the total number of 22 tenders that were submitted, another was incomplete. A third firm, Apollo, encountered difficulties with a power failure that led to Devon council’s agreement to extend the deadline by three hours. Another, Midas, which was unsure whether its case studies had been correctly uploaded sent them in hard copy as well after a telephone conversation with one of the council’s officers. In the event Midas’ case studies had been correctly loaded and the envelope containing the hard copies was never opened. These facts demonstrate that it is easier to submit a non-compliant bid electronically than if they were to be dispatched in hard copy. Any electronic procurement process must be prepared with this in mind.

The council was prejudiced by its inability to consider Leadbitter’s and the other contractor’s bid. As for the tenderers, they must be particularly vigilant to ensure that there is strict compliance.