Inquiries into bidding processes have a time limit. Fair play, right? Not if you get held up in the rules and regulations

Mr Justice Akenhead thought of football. I thought of cricket. In football supporters’ terms it is no more than a cry of: “We was robbed”. For me it is more of Henry Newbolt’s: “Honour a name, Play up! Play up! And play the game!” Mermec UK thinks that its bid was stopped from succeeding by some sort of skulduggery. The firm challenged the tender bidding process in court using the rigmarole called “utilities contracts regulations 2006 as amended”. Let’s call it the “I cry foul!” rules.

Network Rail is making great strides on detecting rail defects. It sought tenders from operators for the train-mounted gizmo technology on a utilities-style contract. The snag is that these folk are in the public procurement rules camp and have to be seen to be playing a straight bat. Easy, really; all you need is to know how a weighted scoring matrix via commercial evaluation criteria and strategic fit and architecture and the usual sub-sub requirements work - rather like the rules for cricket of course.

These regulations are a lawyer’s rich seam of gold. they go on and on and there are traps. It was one such googly that caught mermec’s batsman. Tucked away in the regulations is a time limit

The firms competed. Eventually Mermec was politely told the name of the firm that scored best. It wasn’t them. The winner scored 72.06. Mermec scored 71.7. Mind you the winner had the “best value whole life costs” at 80 while Mermec notched 62.7. Mermec’s solicitors wrote to Network Rail saying how surprised and disappointed they were at not being awarded the contract. They called for a better explanation as to why they came second. They pointed to the duty on the public utility in the European Directive: the utility shall (a) treat economic operators (the contractors) equally and in a non-discriminatory way, and (b) act in a transparent way. Adding firmly, if you don’t cough up the info we will sue you - or words to that effect.

A meeting note included the remark by Mermec: “It was fairly obvious that Network Rail made significant efforts to ’arrange’ the technical scoring so that we could not win the bid”. Another note said: “It was clear that Network Rail had no intention of changing its decision and felt very comfortable in its position”. A month later Network Rail said: “It would not be appropriate to provide any further information to you regarding the tender evaluation process”. Two months later Mermec sued. Apart from the wasted costs of tendering at £200,000, they nodded towards the potential lost earnings from the now lost contract. The claim form of the court was issued on 22 December. Then Christmas pudding got in the way, so Network Rail was served the court form on 30 December.

To allow longer for a challenge undermines the tender process and public interest in confirming who is going to be the supplier

Now then, these regulations are a lawyer’s rich seam of gold. They go on and on and there are traps. It was one such googly that caught Mermec’s batsman. Tucked away in the regulations is a time limit. The complainant has three months to begin proceedings, beginning with the date when “grounds” for starting proceedings first arose. Those words caused an argument in court. The deadline became 23 December. Mermec was out of time by a few days. The issue for these competitions and a challenge to the bid process is identifying the moment when there is enough knowledge to give the “grounds” to begin proceedings. But first, isn’t three months a tad stingy? No. To allow any longer for a challenge undermines the tender process and public interest in confirming who is going to be the supplier. A balance is struck between confirming the contract and having enough time for the disappointed party to take advice and make waves with the public body. True, it wasn’t until mid-October that a meeting was held between Network Rail and Mermec, but enough was known by Mermec on 23 September to be confident about beginning an action.

But doesn’t the judge have discretion to allow a very small time breach? Yes, “if there is a good reason to do so.” He couldn’t find any.

Ok, ok. Network Rail still ought to look closely at this incident; find out if there is any substance in Mermec’s skulduggery concerns. When a train driver goes through a red light there is a no blame inquiry, they just have to find out why. This bid process deserves a red light independent inquiry. Relying on a technicality to (possibly) escape a mistake shines a light on to reputation and fair play. Straight bat chaps, Play up! Play up! Play the game!

legal cartoon

Source: Simone Lia

Tony Bingham is a barrister and arbitrator at 3 Paper Buildings Temple 

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