Procurement in a nutshell – manifest errors in tender evaluation

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What’s new?

The facts

Milton Keynes Council (the Council) ran a procurement process for the award of a framework agreement relating to asbestos removal and reinstatement services. Award was to be on the basis of the most economically advantageous tender, with 60% of the score being awarded for price and 40% for quality.

Five tenders were submitted and the contract was awarded to European Asbestos Services (EAS).

Woods Building Services (WBS), the incumbent provider, challenged the award. It was apparent that, whilst WBS’s tender was the cheapest, EAS had received the highest score due to the quality aspects of its bid.

WBS challenged on the basis that the tender process was flawed, that it breached the principles of transparency and equal treatment and that manifest errors were made in the scoring of the bids.

The judgment

The court raised some general concerns regarding the conduct of the procedure, although it noted these were not enough in themselves to be considered a material breach of the Public Contracts Regulations 2006. These included:

• One of the evaluators was a previous employee of WBS and the Council had not done anything to address the potential conflict of interest.
• The evaluation was carried out in an unusual three stage process – the latter two stages were conducted as a result of concerns arising that the incumbent provider had not won the contract despite submitting the cheapest tender.
• On review of the tenders, the court found it surprising that the first evaluation by the first two evaluators had led to such a marked difference in WBS and EAS’s quality scores.
• The second evaluation, conducted by a third evaluator, did not look at the scores afresh but at the results of the first evaluation.
• The final evaluation brought all three evaluators together to agree the changes but no notes were made.
• There was a distinct lack of contemporaneous records of the evaluation process and notes on the score spreadsheets merely paraphrased the scoring criteria “so as to be all but meaningless.”

The court then reviewed the scores awarded to EAS and WBS in respect of the quality questions.

In terms of manifest errors, it found that:

• EAS had, in respect of its method statement, failed to deal with reinstatement works and this formed 40% of the contract value. As such, it should have been given a score of 0 rather than 10 as the response “did not meet the Council’s requirements and/or was unacceptable in a substantive way.”
• Likewise, EAS’s mobilisation plan should also have scored 0 rather than 6 because it failed to address the Council’s requirement that Task Orders be completed within set timescales.
• EAS’s proposals on the “defect correction period” should have scored 0 rather than 8 because EAS’s timescales for dealing with complaints did not match the timescales set out in the Council’s contractual KPIs.
• In respect of proposals to deal with waste material, EAS had again failed to set out proposals as to how waste would be dealt with at the work site, how it would be transported and disposed of. As a result, it should have been given a score of 0 for failing to meet the Council’s requirements.

The court also considered that the Council breached the principles of transparency and equal treatment by:

• Failing to state that they required a dedicated project manager and penalising WBS’s tender in this respect. WBS should have been awarded the same score as EAS.
• Failing to award WBS the same score as EAS in relation to their health and safety proposals because WBS’s response was more detailed and contained some proposals that were not contract requirements and therefore added value.
• Failing to award WBS the same score as EAS in respect of their proposals for communication procedures and environmental protection. These scores should also have been the same.

As a result of the proposed alterations to the scores, the court held that this would have a material effect on the outcome of the tender process.

Why is it important?

The case is significant because it shows how an evaluation process will be considered by the court in the event of a challenge arising and demonstrates the willingness of the court to correct manifest errors by suggesting that the scores should be adjusted.

The case is also a reminder of the importance of adequate record keeping and Contracting Authorities would be well advised to ensure all of their staff involved in the procurement process are aware of their obligations to keep records which are adequate to justify all decisions made during the process.

How can I find out more?

If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.