This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its October 2017 decision in Hersi & Co Solicitors, R (On the Application Of) v. The Lord Chancellor, the England and Wales High Court – Technology and Construction Court addressed the duty to seek clarifications in a public tendering process. The dispute dealt with a tendering process for the provision of publicly funded legal services for immigration and asylum work, for which 127 of 218 firms were selected for award. The complainant was an unsuccessful bidder who challenged the low score it received for its bid after failing to provide all the required information. The complainant argued that the government was under a duty to seek clarifications to address the information gaps. The Court provided an extensive overview of the European and United Kingdom cases dealing with clarifications and summarized the applicable legal rules as follows:
Scope of Duty to Seek Clarification
The duty of a contracting authority to seek clarification of the tender in certain circumstances developed originally out of European law (although, as we shall see, it has been affirmed by the English courts). There were a number of debates in the present case as to the nature and scope of any such obligation and the potential differences between a right and a duty. As I indicated to counsel during argument, it seemed to me that this sort of debate gave rise to a real risk of over-complication. Accordingly, I identify below the authorities which I consider to be of particular relevance and then summarise the general principles at paragraph 17 below.
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During the course of his submissions, Mr Westgate sought to define in the widest terms the circumstances in which the contracting authority was obliged to seek clarification. To do that, he sought to minimise the obvious risk inherent in any process of clarification, namely the making of changes which improve the tender in question. He did this by turning the test on its head, and arguing that the default position was that changed tenders should be regarded as an acceptable norm, with the only proviso that “the change has to fundamentally alter the nature of the bid before it becomes unacceptable”. He was unable to point to any authority in support of this radical proposition, and in my view it was contrary to the passages from the authorities which I have already cited. It was also a test that was unworkable in practice: how could a contracting authority sensibly decide whether an answer to a clarification question “fundamentally altered the nature of the bid” once it had received the answer, let alone when it was asking itself whether or not to ask the clarification question in the first place?
So what then are the applicable principles to be derived from the cases? In my view, they are these:
(a) A duty to seek clarification of a tender will arise only in “exceptional circumstances” (Tideland, SAG), sometimes called “limited circumstances” (Antwerpse).
(b) Such a duty may arise where a tender is “ambiguous”, but it will not do so in every case where a tender is ambiguous (Tideland)
(c) It will only arise “where the terms of a tender itself and the surrounding circumstances known to [the contracting authority] indicate that the ambiguity probably has a simple explanation and is capable of being easily resolved” (Tideland).
(d) Such a duty may also arise where there is a “simple clerical error” (Antwerpse) or “when it is clear that [the details of a tender] require mere clarification, or to correct obvious material errors” (SAG). This would appear to be the same as the “serious manifest error” referred to in Adia. It is not necessary for the error to be “clerical” (whatever that might mean) but it must be “simple”, “material”, “serious” and “manifest”.
(e) The duty will not arise where any amendment or clarification provided post-tender would “in reality lead to the submission of a new tender” (SAG). The contracting authority “cannot permit a tenderer generally to supply declarations and documents which will require to be sent in accordance with the tender specification and which were not sent…” (Archus).
(f) There is no authority to support Mr Westgate’s submission that ‘the change generated by a request for clarification would have to fundamentally alter the nature of the bid before it becomes unacceptable’. I consider that this proposition is contrary to the cases I have cited and is unworkable in practice.
In my view, this reading of the cases and this summary are consistent with the decision of the Court of Appeal in Northern Ireland in William Clinton v Department for Employment and Learning and Another [2012] NICA 48 where, at paragraph 62, and commenting on Tideland, the Court of Appeal said:
[62]. Tideland requires the court to have regard to (a) the terms of a tender itself, and (b) the surrounding circumstances known to the client, (c) the client has to be satisfied that there is an “ambiguity”, (d) the ambiguity probably has to have a simple explanation, and (e) the ambiguity is capable of being easily resolved. However, whilst on one view that might be interpreted as giving a court a wide power to require the client to give an unsuccessful tenderer a further opportunity to mend its hand, the circumstances in Tideland were exceptional, and it must be doubted whether the ECJ intended this to be interpreted in as generous a fashion as the trial judge’s decision necessarily involves. Were the Department to provide an opportunity to a tenderer to remedy insufficient evidence by providing additional information, where the information would amount to a new tender that opportunity offends against the principle in SAG ELV.
It follows from the previous paragraphs of this Judgment that I respectfully agree with that approach.
The Court also referred to the prior English decision in R (Hoole) v. Legal Services Commission, where a bidder, like the complainant, failed to submit all required information in relation to a tendering process for publicly funded legal services. In that prior decision, the judge considered the tension between the specific public law fairness duties owed to individual bidders and the general duty to treat all bidders equally:
In my judgment, this is the answer to the claimant’s case that there was duty on the defendant to assist them make good the defects in their application. Viewed entirely from the point of view of a public law duty to act fairly, it may well be that the exercise of a discretion to grant a benefit should be based on all matters that could or should be known to the authority, and that fairness might well include a reasonable opportunity to correct obvious errors without changing the fundamental nature of the bid submitted. It is after all in the public interest that a well-qualified and experienced provider of legal services in the field of immigration should be permitted to continue in business. However, any such duty is severely circumscribed where there is a competitive tender and an over-riding duty to treat all tenderers equally. Here for reasons that were not the responsibility of the defendant, the claimant had failed to supply the information that would have lead them to being ranked in priority where there was competition for the award of NMS. Any general duty to give an applicant an opportunity to correct errors in the absence of fault by the defendant, yields to the duty to apply the rules of the competition consistently and fairly between all applicants, and not afford an individual applicant an opportunity to amend the bid and improve its prospects of success in the competition after the submission date had passed.
The Court agreed with that court’s prior analysis. In applying these principles to the specific case, the Court ultimately concluded that the government was under no duty to seek clarifications for the missing information. The Court also concluded that the government had conducted its evaluation fairly and consistently in scoring the different bidders who had similarly failed to provide required information, stating that “the long and the short of the position here was that the claimant had failed to answer Questions 5–7 and everyone else who had failed to answer those questions was treated in precisely the same way by the defendant.” The Court therefore rejected the legal challenge. As this case illustrates, when dealing with information gaps in bid submission and relating post-bid clarifications, purchasing institutions must tread a careful line to balance the fairness duties owed to individual bidders against the overarching equal treatment obligations owed to all bidders. Ultimately bidders should assume primary responsibility for ensuring that their bids include all requested information since their individual rights do not override the rights of fair and equal treatment owed to all bidders.
