This article is an excerpt from the 2021 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its July 2013 decision in Baxter Healthcare Ltd v. Health Service Executive, the High Court of Ireland rejected a legal challenge based on allegations of hidden award criteria and confirmed that evaluators were entitled to rely on their experience and judgment when scoring proposals. The dispute dealt with a tendering process for the provision of renal haemodialysis satellite units to Dublin, Ireland. A losing bidder challenged the evaluation process, alleging that the evaluators relied on hidden criteria when scoring the competing proposals. The Court rejected this claim. While it accepted that the criteria could have been clearer in some circumstances, it ruled that this did not impact the overall scoring or result. Further, the Court rejected the notion that the qualitative criteria needed to be disclosed in such a mechanical fashion so as to allow for the mathematical “checking of boxes” to arrive at an evaluation score. Rather, the Court recognized that the government’s Procurement Evaluation Group (PEG) had a margin of discretion within which it could apply its professional judgment against the stated criteria in the prescribed 1–10 scale. The Court determined that the lower score given to the noisier, larger renal haemodialysis satellite units when compared to the higher score given to the quieter smaller units fell within the margin of discretion afforded to the government evaluators:
Section 11.9 is a weighted section for which marks ranging between 0-10 could be awarded. Unless a contracting authority is expected to set out its requirements in the form of multiple choice questions with a box beside each to be ticked, so that the task of evaluation is reduced to a simple mathematical calculation, there must be scope within the tender evaluation process for the evaluation team to reach a score by means of applying its professional judgment to each question. That process avoids the mere adding of marks from ticked boxes, which would render pointless the experience and expertise available among members of a team such as the PEG in this case. Such bodies must be permitted to exercise a degree of discretion in how a section is scored. It must also be allowed to briefly comment on how or why a less than perfect score was considered appropriate. In my view, the applicant is being overly pedantic in attempting to establish fault on the part of the PEG by its use of the words “more noise and activity anticipated in a 40 station unit” on the score sheet. That is not the introduction of new criteria. There will always be some noise and activity in any area where people gather. The fact that the PEG was of the view that a 40 station unit would have more of such noise and activity that a unit half that size is not something which it had to announce in advance, particularly in circumstances where the applicant at no stage forewarned that it would put in a bid for two units in one location.
I have to say also that the applicant has only itself to blame if it feels taken by surprise that HSE considered that a 40 station unit would be noisier and have more general activity within it than a 20 station unit, if it believes that this is wrong, and it certainly should not be characterised as a manifest error on the part of the HSE such that the entire process should be recommenced. After all, it was the applicant’s decision not to disclose to HSE in advance of its final tender that it was proposing to bid for Lots 3 and 4 in a single location, in addition to bidding for each at separate locations. It was perfectly entitled either to keep its powder dry in that regard, or to change its mind at the last minute and put in such a bid. But in conducting itself in that way, it not only deprived itself of being able to avail of the dialogue phase of the process for the purpose of clarifying any matters of concern to it which it felt might benefit from clarification, or asking relevant questions.
The Court also noted that the bidder could have sought clarification prior to bidding regarding how a larger single unit would be assessed when compared to multiple smaller units. It therefore rejected the challenge to the evaluation process. As this case illustrates, the courts will allow evaluators a certain degree of discretion when evaluating proposals against general evaluation criteria. However, without stripping the ability of evaluators to apply professional judgment, purchasing institutions should strive to make their evaluation criteria as specific and transparent as possible to reduce the risk of having successful evaluation challenges based on allegations of hidden criteria.
