This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its October 2018 decision in Transcore, LP v. The National Roads Authority, the High Court of Ireland rejected a bidder’s claim that the evaluation team misapplied a one-to-ten scoring scale in the evaluation of its tender. The case dealt with a tendering process for a motorway tolling operations contract. A losing bidder challenge the result, arguing that the evaluators misapplied the one-to-ten scoring rules that applied to the following “Criteria B” proposed resources, which sought to differentiate between fundamental, major, significant, minor, and no concerns in each bidder’s proposed resources submission and score those assessments out of ten points:
As the Court summarized, the applicant challenged the bidding process after finding out how close the final evaluation scores were between its bid and the top-ranked bid in those above-noted areas:
The Outcome of the Procurement Competition
Once the tenders of each of the five bidders had been scored on quality and on price, the quality and price scores were then combined. Turas received a quality score of 555 and a price score of 247 giving a total of 802. The applicant received a quality score of 570 and a price score of 226 giving a total of 796. Turas was ranked in first place and the applicant in second place. The Evaluation Committee recommended to the Project Board of the Authority that the Authority should award the contract to Turas.
The applicant claimed that The National Roads Authority breached the European and Irish procurement rules by giving its competitor a score of nine out of ten on the proposed resources for the tendered project:
The Applicant’s claims and contentions
The applicant sought various reliefs including orders pursuant to Regulation 9(1)(a) of the Remedies Regulations setting aside the Authority’s decision to appoint Turas as the successful tenderer for the contract and varying the Authority’s decision to appoint Turas and directing the Authority to appoint the applicant as the successful tenderer for the contract. The applicant further sought declaratory relief and other orders to the effect that the decision by the Authority to appoint Turas as the successful tenderer failed to comply with the requirements of public procurement law and, in particular, the requirements of the European Parliament and Council Directive 2004/18/EC of 31 March, 2004 on the Coordination of Procedures for the Award of Public Supply and Service Contracts (as amended) (the “Public Contracts Directive”), the European Communities (Award of Public Authorities’ Contracts) Regulations 2006 (S.I. No. 329 of 2006) (as amended) (the “Public Contracts Regulations”), the Council Directive 39/665/EEC of 21 December, 1989 (as amended) (the “Remedies Directive”), the Remedies Regulations and certain general principles of EU law including the principles of equal treatment, non-discrimination, transparency, competition, proportionality and objectivity (the “general principles”). The applicant sought a declaration that the Authority’s decision to award Turas a score of 9 marks and/or more than 8 marks in respect of its delivery plan – operations plan, Criteria B as set out in the ITPD and the CFT breached those requirements and the general principles and/or breached a collateral contract between the applicant and the Authority under which the Authority was to apply the rules of the procurement process in a fair and equal manner, in accordance with its terms and with law and, specifically, with the requirements of procurement law, the ITPD, the CFT and the general principles. Various other reliefs were sought including an order pursuant to Regulation 9(1)(a) and/or 9(5) of the Remedies Regulations setting aside and/or permanently suspending the Authority’s decision to appoint Turas as the successful tenderer.
While damages were originally sought by the applicant, it was confirmed at the commencement of the hearing that having regard to the fact that the Authority has not proceeded to award the contract to Turas, the question of damages did not arise. It was further indicated at the hearing that while the applicant had sought an order directing the Authority to appoint it as the successful tenderer, I could leave over the question of the appropriate remedies to be granted until after I made my findings and set out my conclusions in respect of the grounds of challenge advanced by the applicant. Depending on those conclusions, the question of the appropriate remedies could then be addressed by the parties.
The applicant alleged that the Authority failed to comply with the Public Contracts Directive, the Public Contracts Regulations, the general principles and the alleged collateral contract in a number of respects. First, it was alleged that the Authority failed to comply with the general principles, in particular, the principles of non-discrimination, transparency, equal treatment and proportionality by awarding Turas a score of 9 marks and/or more than 8 marks in respect of Criteria B in circumstances where it was alleged that the Evaluation Committee had some concerns regarding the sufficiency of the proposed resources to ensure consistent delivery of all aspects of Turas’s plan. Second, it was alleged that the Authority misdirected itself in law and made a manifest error in the manner in which it evaluated tenders by awarding Turas a score of 9 marks and/or more than 8 marks in respect of Criteria B, in circumstances where it had some concerns with Turas’s submission regarding sufficiency of the proposed resources to ensure consistent delivery of all aspects of its plan. It contended that the Authority ought, therefore, to have ruled out the possibility of awarding Turas 9 or 10 marks and/or any more than 8 marks in respect of Criteria B. Third, it was contended that in awarding Turas a score of 9 marks and/or more than 8 marks in respect of Criteria B, the Authority failed to adhere to, departed from and amended the terms of the ITPD and/or CFT. Finally, it was argued that in awarding Turas a score of 9 marks and/or more than 8 marks in respect of Criteria B, the Authority applied an undisclosed criterion or an undisclosed scoring matrix to the evaluation of Turas’s submission. As noted above, the applicant also alleged that the Authority acted in breach of the alleged collateral contract under which it is alleged the Authority was to apply the rules of the procurement process in a fair and equal manner, in accordance with its terms and in accordance with law and with the requirements of procurement law, in particular, by awarding Turas a score of 9 marks and/or more than 8 marks in respect of Criteria B.
As the Court explained, the issue turned on whether the evaluation committee had properly interpreted the evaluation rules in scoring the competing bidder at nine out of ten, notwithstanding concerns over the adequacy of the information provided for proposed project resources:
THE ESSENTIAL ISSUE AND HOW TO APPROACH IT
This brief summary of the respective positions of the parties shows that what is really between the parties is a dispute as to the correct interpretation of the quality scoring matrix in Table 3 of Appendix 2 to the CFT (with identical wording being used in the ITPD). While it might be said that the issue is a net one of interpretation, that somewhat understates the complexity of the point. In approaching that issue of interpretation, it is necessary to consider what the Authority and, in particular, the Evaluation Committee did in reaching its decision to award a mark of 9 in respect of Criteria B in Turas’s submission. It is then necessary to consider whether in approaching the scoring in the manner that it did, the Evaluation Committee acted in accordance with the evaluation methodology contained in Table 3. This in turn depends on the correct interpretation to be given to the quality scoring matrix.
There is no dispute between the parties that if the Evaluation Committee did not correctly interpret the evaluation methodology and did not apply that methodology as correctly interpreted, the Authority would have breached one or more of the general principles, including, the principles of transparency, equal treatment and non-discrimination. It is, therefore, necessary to examine in a little detail the process followed by the Evaluation Committee in reaching its conclusion as to the mark to be awarded to Turas in respect of Criteria B and then to consider whether, in accordance with the proper legal test, the Evaluation Committee correctly interpreted the evaluation methodology contained in Table 3. As part of this consideration, it will be necessary to address the contention advanced by the applicant that in making the case that the Authority had “ no concerns “ as to the sufficiency of the proposed resources to be applied by Turas to ensure consistent delivery of all aspects of the relevant delivery plan, the Authority was seeking to make a case which it had not pleaded, was not stated on its behalf in the evidence and was inconsistent with the reasons given in the 28th February letter and in subsequent correspondence prior to the commencement of the proceedings.
The Court then analysed whether the degree of concern felt by the evaluators over the information provided by the competitor should have limited the evaluators to scoring the proposed resources at no higher than eight out of ten:
ANALYSIS OF THE ISSUES
General
I now turn to consider the question of the interpretation of the quality scoring matrix in Table 3 and the various aspects that must be considered in that context. The essential issue here is whether by concluding that the issues which it had with regard to the level of detail provided by Turas in respect of how its resources related to the volume of activity, which it did not consider to be “ sufficiently serious to constitute a minor concern “ or to be “ unequivocally of no concern whatsoever “, the Evaluation Committee was entitled to award a score of 9 marks “ to appropriately reflect the degree of concern “ felt by it. Was the Evaluation Committee precluded from awarding a mark in the top band where it was required to have “ no concerns with the bidder’s submission regarding the sufficiency of the proposed resources to ensure consistent delivery of all aspects of the bidder’s plan “ in circumstances where it had an issue or issues or concern with regard to the level of detail on an aspect of the plan which did not amount to a “ minor concern “, and was not “ unequivocally of no concern whatsoever “ and where the score was given to reflect appropriately the “ degree of concern “ felt by the Evaluation Committee?
The Authority has maintained that it had “ no concerns “ regarding the “ sufficiency of the proposed resources to ensure consistent delivery of all aspects of the [Turas] plan “ and that it did not have “ minor concerns “ with that aspect of Turas’s submission. However, since it was suggested by the applicant that the position adopted by the Authority at the hearing was not consistent with what actually occurred during the process and was not the case made by the Authority in its correspondence, in its pleadings and in its affidavit evidence, it is necessary to look first in a little detail at what was actually done by the Evaluation Committee in evaluating this aspect of Turas’s submission. It is possible to discern what actually occurred before the Evaluation Committee from the affidavit evidence adduced by the Authority in the proceedings and from the documents discovered by the Authority.
After providing a detailed consideration of the background evidence and considering that evidence within the context of the procurement rules that applied to the challenged bid evaluation process, the Court provided the following summary of the interpretive principles that governed the evaluation process:
Summary of Interpretative Principles
In summary therefore, it is clear from a review of the relevant authorities that the interpretation of the quality scoring matrix in Appendix 2 to the CFT is a matter for the court. The court does not approach the interpretation of the documents as if it were a statute or a deed of contract or other legal instrument. The court must interpret the document in a manner which gives effect to the general principles of equal treatment and transparency. It must ensure that the interpretation is such as to allow all reasonably well informed and normally diligent tenderers to interpret the document and the criteria contained in it in the same way. The court must be satisfied that the criteria as interpreted are clear, precise and unequivocal so that all reasonably well informed and normally diligent tenderers would interpret those criteria in that way.
The contracting authority must also interpret the criteria in the same way for all bidders throughout the entire procurement process. The court must consider the context in which the words being interpreted appear and must consider the criteria as a whole and within their wider setting. Obviously, since context is crucial, the court should not focus exclusively on some words to the exclusion of others but should consider the words in the criteria being interpreted in their wider context. Finally, the court must focus on the “ industry “ concerned in which the professionals and persons involved are not lawyers but participants in that industry.
The Court ultimately concluded that the score of nine out of ten fell within the acceptable interpretation of the evaluation rules given the specific facts relied on by the evaluators. The Court supported its finding with a nine-point analysis that illustrates the detailed scrutiny that will be put to tender evaluation decisions when those decisions are challenged:
Application of Interpretative Principles
I now attempt to interpret the relevant criteria taking account of these important principles of interpretation.
What is required to be interpreted is the quality scoring matrix contained in Appendix 2 to the CFT (and the equivalent provisions of the ITPD). That scoring matrix must be interpreted in the wider context in which it appears in the tender documentation. The applicant has been criticized (correctly, in my view) for excessively focusing in a somewhat blinkered fashion on a small number of words in the quality scoring matrix in Table 3. However, that matrix and those words must be seen in their wider context in terms not only of Appendix 2 itself but in the context of the CFT itself including section 6 dealing with evaluation of tenders. I have already set out in some detail the context of the documents and reproduced the relevant provisions of those documents. Having regard to the wording of the quality scoring matrix in Table 3 and the context in which it appears in Appendix 2 and referred to in section 6 of the CFT, the question to be resolved is what would a reasonably well informed and normally diligent tenderer have understood by the provisions of the quality scoring matrix and, specifically, how would such a tenderer have understood how the Authority would proceed to assess or evaluate tenders in accordance with the evaluation methodology?
In my view, looking at the quality scoring matrix in Table 3 in its wider context, a reasonably well informed and ordinary diligent tenderer would have understood the following.
First, it would have understood that the objective of the evaluation exercise was to evaluate tenders against the evaluation criteria referred to in section 6 of the CFT and contained in Appendix 2.
Second, it would have understood that quality would be marked separately from price.
Third, it would have understood that with regard to quality, the Authority was obliged to allocate scores for each delivery plan in accordance with the evaluation criteria contained in Table 2 and scored in accordance with the quality scoring matrix contained in Table 3. Section 6.2 of the CFT stated (under the heading “ quality submissions evaluation “) that the evaluation of quality submissions would involve the assessment of the bidder’s quality submission in relation to a delivery plan as noted in Appendix 2 and that quality submissions would be evaluated against the sub-criteria contained in Appendix 2 scored using the scoring guidance and evaluation methodology contained in that Appendix. Such a tender would also have understood by reference to Appendix 2 itself that the criteria used for the evaluation of each of the required plans would be as set out further in Appendix 2 and that, with regard to the operations plan, the Authority would evaluate such plan against the evaluation criteria set out in Table 2 and in accordance with the scoring table set out in Table 3.
Fourth, it would further have understood by reference to the “ scoring methodology “ set out in Appendix 2 (immediately following the tender evaluation criteria in Table 2) that for each of the three delivery plans, scores for the tender evaluation criteria set out in Table 2 would be allocated bearing in mind the scoring guidance set out in Table 3.
Fifth, it would have understood that the allocation of a score (in respect of the two criteria, Criteria A and Criteria B), for each of the three plans with reference to the methodology set out in Table 3 (quality scoring matrix)) was the objective of the evaluation of the quality submission.
Sixth, it would have understood by reference to the quality scoring matrix itself in Table 3 that the Authority would allocate marks by reference to any concerns which it had with regard to compliance of the relevant plan with the criteria in respect of each plan set out in Table 2 (tender evaluation criteria). This is clear from Table 3 (quality scoring matrix) and, in particular, from the reference to the relevant criterion (in the present case Criteria B) and from the express terms of the boxes or bands of scoring set out in that table. The express terms of those boxes or bands in Table 3 made it clear to those tenderers (and I hold that a reasonably well informed and normally diligent tenderer would have understood) that scoring would be done by reference to the existence or otherwise of concerns with regard to compliance with or adherence to the relevant criterion, in this case Criteria B.
Seventh, it would have understood that the Authority could award marks in various bands from 0 to 10. In that regard, it would have been clear to such a tenderer that the full range of marks was available to be awarded by the Authority in its evaluation of the relevant plans. Appendix 2 stated on more than one occasion that marks were “ out of 10 “. The reasonably well informed and normally diligent tenderer would have understood, therefore, that it was possible to obtain a score of 9 out of 10 or 10 out of 10 in the event that the Authority had “ no concerns “ with the submission regarding the sufficiency of the proposed resources to ensure consistent delivery of all aspects of the bidder’s plan. Such a tenderer would have understood that where the Authority had “ minor concerns “ with the bidder’s submission regarding the sufficiency of the proposed resources to ensure consistent delivery of all aspects of the bidder’s plan, it was open to the authority to award a mark of 7 or 8.
Eighth, such a tenderer would have understood that where the Authority did not have “ minor concerns “ with the submission from the point of view of the relevant criteria, or concerns greater than that, such as “ significant concerns “, “ major concerns “ or “ fundamental concerns “, a submission could not be scored in any of the bands or boxes for “ minor concerns “ or any of those greater concerns. It would have understood, therefore, that a submission in respect of which the Authority did not have “ minor concerns “ or more significant concerns, would be marked in the highest band or box as this was the only possible band in which such a submission could be placed in those circumstances.
Ninth, such a tenderer would have understood, in my view, that in each band or box of marks, two possible marks could be awarded. Therefore, within the top band or box, where the Authority had “ no concerns “ it was open to the Authority to allocate a mark of 9 or 10. Such a tenderer would, therefore, have understood that the Authority could have allocated a mark of 9 or 10 in respect of the relevant criterion where it had “ no concerns “ with the bidder’s submission with regard to that criterion.
The applicant contended that a submission in respect of which the Authority had “ no concerns “ with respect to the relevant criterion could be allocated a score of 9 or 10 marks depending on the Authority’s assessment as to quality and, in particular, as to whether the particular plan was better than another bidder’s plan in respect of which the Authority also had “ no concerns “ or was best or better suited to the Authority’s requirements than such other plan. However, I agree with the submission advanced by the Authority, and supported by Turas, that it was not open to the Authority to evaluate the plans on this basis. The bidders were informed in the CFT (and prior to that, in the ITPD) and, in particular, in Appendix 2 that plans would be assessed by reference to “ concerns “ and not by reference to anything else. In my view, were the Authority to have engaged in the sort of evaluative exercise suggested by the applicant, it would not have been acting in accordance with the tender evaluation criteria and, in accordance, with the quality scoring matrix which was communicated to bidders in the CFT (and ITPD). For the Authority to have acted in this way would, in my view, have amounted, at the very least, to a breach of the rules of the competition and consequently, a breach of the general principle of transparency.
I accept the Authority’s submission that it was open to the Authority, in deciding what mark to award in respect of a plan in respect of which it had “ no concerns “ for the purposes of the relevant criterion, to decide to award a 9 or a 10 depending on whether it had a concern or issue with regard to any detail or aspect of the relevant plan. That is the only logical interpretation to give to the quality scoring matrix where the Authority did not have “ minor concerns “ and where it had “ no concerns “ or more serious concerns than “ minor concerns “ with regard to the relevant criterion and where it was not permitted, by virtue of the criteria notified to bidders in the CFT (and ITPD), to differentiate between bids on the basis of which is best or better than another for the purposes of the Authority’s requirements. The only way in which the Authority could decide whether to give a mark of 9 or 10 within the top band was by reference to the degree or gradation of a concern or issue in relation to an aspect of the plan or submission which was not such as to give rise to the Authority having concerns with the bidder’s submission regarding the sufficiency of the proposed resources to ensure consistent delivery of all aspects of that bidder’s plan. It seems to me that this conclusion inevitably follows from the terms of the quality scoring matrix in Table 3. There is nothing elsewhere in the CFT (or ITPD) which is inconsistent with this interpretation.
On the facts, it is clear from the affidavits of Mr. Masterson that the Authority had “ no concerns “ with Turas’s submission regarding the sufficiency of proposed resources to ensure consistent delivery of all aspects of its delivery plan. It did have an issue or a concern in relation to the level of detail provided by Turas in respect of an aspect of what was required under section 4 of the governance and delivery schedule to the contract which it said (in the 28th February letter) was not “ sufficiently serious to constitute a minor concern “ or to be “ unequivocally of no concern whatsoever “. In light of this, the Evaluation Committee/Authority decided to award a mark of 9 rather than 10” to appropriately reflect the degree of concern felt by the Committee”. This “ degree of concern “ related to the level of detail provided by Turas with regard to an aspect of the plan. It is clear from the affidavits of Mr. Masterson that the Evaluation Committee/Authority did not have a concern or any concern and was not concerned about the sufficiency of the resources proposed by Turas to ensure consistent delivery of all aspects of its plan. In my view, it was open to the Authority to decide as to whether a score of 9 marks or 10 marks should be awarded in respect of this part of Turas’s plan and to award a score of 9 marks based on its issue or concern about the level of detail provided.
The Authority does, in my view, have a margin of appreciation or discretion when it comes to deciding as between a score of 9 or 10 in the top band of marks. This is in no way inconsistent with the well-established position that a margin of appreciation does not exist where there is a breach on one of the general principles, such as the principle of transparency. I do not believe that there was a breach of the general principle of transparency (or of equal treatment) or indeed of any of the general principles in the present case.
While the Court ultimately dismissed the legal challenge, this decision serves as a useful case study showing the level of scrutiny that evaluation scoring decisions will be exposed to in bid protests, particularly in close scoring situations where the award turns on the rules governing the allocation of points between closely competing bidders.
