Case: J D Leadbitter & Co v Devon County Council High Court Chancery, May 1, 2009
Devon County Council (the council) was the procurement authority for Construction Framework South West. Inclusion in the framework did not guarantee work but successful tenderers were likely to have improved business prospects.
The tendering process had to comply with EU law, and was detailed and complex. The council published a notice in the Official Journal of the European Union on 24 July, 2008 and issued the Invitation To Tender (ITT) to 25 tenderers on 26 November, 2008.
Tenders were to be submitted to a secure internet portal by noon on 16 January, 2009. Submission by email was not allowed on confidentiality grounds.
The ITT emphasised that tenders should be fully uploaded ‘in good time before the submission deadline’ as the uploading process took some time. The ITT also warned that the noon deadline was strict and that ‘an incomplete set of documents would mean that a tender was invalid’. Tenders were to include staff costs with overhead and profit percentages and at least four case studies.
Section B2.17 also warned that if a tender was not fully submitted before the deadline it would be rejected. Submission was a once-only option and tenderers had to ensure all documents were uploaded to the site before hitting the ‘submit’ button. However, section B2.25 did allow ‘material and genuine errors’ to be amended during the evaluation period.
There was also a distinction between the main tender information which had to be submitted this way and supplementary information which could be sent by mail.
There were problems. One tenderer, Apollo, experienced a power outage at its head office on the morning of 16 January. Justin Bennetts, a principal procurement officer at the council, agreed to postpone the deadline for all tenderers until 3pm.
Another tenderer, Midas, was not sure whether it had uploaded all of its tender correctly. As it could not check on the council’s website Midas called Mr Bennetts at 10.30am on 16 January. He allowed Midas to submit a back-up disc. Midas delivered the disc before the deadline. In the event, the disc was never needed as Midas’s uploaded tender had been completed within the deadline.
When Leadbitter learned the deadline had been postponed, it took the opportunity to review its tender, which it submitted electronically at 12.05. But shortly before 14.45 it noticed the case studies were missing. When it attempted to upload the missing 63 pages, it failed.
Leadbitter contacted the council’s helpline at 14.57 and Mr Bennetts at 14.59. He said the council would have to assess the tender it had received, which Leadbitter took to mean it could still submit the case studies, which it did by email at 15.26 (ie after the deadline).
The council refused to consider Leadbitter’s tender, citing its obligations to fairness and transparency. Leadbitter sued, arguing that this decision was unfair and discriminating. It pointed out that ITT section B2.25 allowed errors to be corrected, and that the rejection was disproportionate.
The court ruled that Leadbitter was wrong on both counts. The council had not been unfair in rejecting Leadbitter’s tender, nor had it acted disproportionately.
Ann Wright’s analysis
Devon council’s tendering process was controlled by the Public Controls Regulations 2006 which implemented the EU’s Directive 2004/18/EC.
Leadbitter first argued that under regulation 4 and article 2 of the Directive, the council had an obligation to treat tenderers equally and in a non-discriminatory and transparent way, but Apollo and Midas had both had their tenders accepted.
The court said Apollo’s mains power outage was outside its control and Apollo had complied with the extended deadline. Midas, meanwhile, had submitted the whole of its tender properly and within time and its concession was not used by the council. But Leadbitter’s error was discovered too late to be corrected in time or via the secure portal.
Equally, clause B2.25 only allowed errors within a submitted tender to be corrected. It did not allow Leadbitter to complete its tender by emailing the missing case studies after the extended deadline.
While the court accepted Leadbitter was in a stronger position than a tenderer who was simply late, it held that the council could not be required to accept the missing case studies by email even before the deadline. It was therefore entitled to reject Leadbitter’s tender and had not acted disproportionately.
Ann Wright is an adjudicator and quantity surveyor. Tel: 01675 466 009