By Paul Emanuelli

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 January 2012 decision in Clinton (t/a Oriel Training Services) v. Department for Employment & Learning, the High Court of Justice in Northern Ireland, Queen’s Bench Division, struck down a contract award after finding that the government relied on vague and hidden evaluation criteria. The dispute dealt with an Invitation to Tender (ITT) issued by the Department for Employment and Learning (“the Department”) for the award of a contract for the provision of a publicly funded training and apprenticeship program in Northern Ireland. An unsuccessful bidder challenged the evaluation of its prior experience, arguing that the government improperly lowered its score based on unclear evaluation requirements, and allowed other bidders to clarify their proposals without allowing it the same post-bid clarification opportunity.

With respect to the duty to disclose clear evaluation requirements, the Court summarized a series of prior domestic and European cases that recognize the duty to use transparent evaluation criteria to ensure the equal treatment of bidders. These cases prohibit the use of undisclosed evaluation factors that, if known by bidders, would impact how they prepared their bids:

Both the European and domestic jurisprudence have placed substantial emphasis on the manner in which information to potentially interested bidders about matters such as the rules of the procurement competition concerned and the formulation of contract selection and award criteria are expressed. One of the dominant principles in this field, that of equality of treatment of all bidders, coupled with the kindred principle of transparency, features with particular force in decided cases where issues of this kind have fallen to be determined. Some of the prominent European decisions were considered by this court in Federal Security Services v Northern Ireland Court Service [2009] NIQB 15, where the central issue was that of undisclosed contract award criteria:
The issue of undisclosed contract award criteria was considered by the European Court of Justice in Universale-Bau and Others [2002] ECR 1–11617. The Court ruled in favour of the tendering party. It its judgment, it stated:
The principle of equal treatment, which underlies the Directives on procedures for the award of public contracts, implies an obligation of transparency in order to enable verification that it has been complied with… It follows … that the procedure for awarding a public contract must comply, at every stage, particularly that of selecting the candidates in a restricted procedure, both with the principle of the equal treatment of the potential tenderers and the principle of transparency so as to afford all equality of opportunity in formulating the terms of their applications to take part and their tenders… [the Directive]… imposes on the contracting authority the obligation to state in the contract documents or in the contract notice all the criteria it intends to apply to the award, where possible in descending order of their importance …The requirement thus imposed on the contracting authorities is intended precisely to inform all potential tenderers, before the preparation of their tenders, of the award criteria to be satisfied by these tenders and the relative importance of those criteria, thus ensuring the observance of the principles of equal treatment of tenderers and of transparency.
To like effect is the decision of the European Court in ATIEAC [2005] ECR 1 – 10109: see paragraphs [22] – [31] and, in particular, paragraph [28]: “Second, it must be determined whether the decision contains elements which, if they had been known at the time the tenders were prepared, could have affected that preparation”.
…
In SIAC Construction v Mayo County Council [Case C-19/00] [2002] All ER (EC) 272, the European Court considered the interaction between the obligation of equal treatment and the principle of transparency, from the perspective of the formulation of contract award criteria. The Court stated:
The Court has held… that the purpose of co-ordinating at Community level the procedures for the award of public contracts is to eliminate barriers to the freedom to provide services and goods and therefore to protect the interest of traders established in a Member State in which to offer goods or services to contracting authorities established in another Member State… In accordance with that objective, the duty to observe the principle of equal treatment of tenderers lies at the very heart of Directive 71/305… More precisely, tenderers must be in a position of equality both when they formulate their tenders and when those tenders are being assessed by the adjudicating authority.
The judgment then recalls that the Court had previously ruled that, in the determination of the most economically advantageous tender, it is permissible to include the reliability of supplies amongst the contract award criteria. It continues:
However, in order for the use of such a criterion to be compatible with the requirement that tenderers be treated equally, it is first of all necessary … that that criterion be mentioned in the contract documents or contract notice. Next, the principle of equal treatment implies an obligation of transparency in order to enable compliance with it to be verified … More specifically, this means that the award criteria must be formulated, in the contract documents or in the contract notice, in such a way as to allow all reasonably well informed and normally diligent tenderers to interpret the in the same way.
There is a discernible emphasis in the decided cases on the requirement that criteria be clearly defined: see, for example, Commission –v- French Republic [2004] ECR I-9845, paragraph [34]. In Federal Securities, this court’s review of the various authorities impelled to the conclusion that the test to be applied is the following:
If the tenderers had known in advance of the relevant information, bearing on the award criteria or the proposed contract, might this have influenced the terms in which they formulated their tenders?

Furthermore, as the Court noted, the transparency standards established by the case law require purchasing institutions to draft their evaluation requirements with sufficient clarity to allow reasonably well-informed and diligent bidders to interpret the evaluation criteria the same way:

It may be said that the overarching principle in play is the requirement that award criteria be so formulated “… as to allow all reasonably well informed and normally diligent tenderers to interpret them in the same way” (Siac Construction, paragraph [42], supra). An instructive summary of the applicable principles is found in the judgment of Weatherup J in Scott –v- Belfast Education and Library Board [2007] NICH 4 which, following consideration of the decision in Siac Construction, formulated three propositions:
  1. “The duty to observe the principle of equal treatment of tenderers lies at the heart of the Directive and tenderers must be in a position of equality, both when they formulate their tenders and when those tenders are being assessed by the adjudicating authority.
  2. The principle of equal treatment implies an obligation of transparency in order to enable compliance to be verified. Transparency means that the award criteria must be formulated in the contract documents or the contract notice in such a way as to allow all reasonably well-informed and normally diligent tenderers to interpret them in the same way. Further, transparency also means that the adjudicating authority must interpret the award criteria in the same way throughout the entire process.
  3. Further, when tenders are being assessed the award criteria must be applied objectively and uniformly to all tenderers. If the documents are not capable of being interpreted by the tenderers in the same way then the process may lose that objective and uniform approach to the assessment of tenders.”

Turning to the facts of the case, as the Court summarized, the dispute turned on the interpretation of the Selection Criterion No. 1 in the RFP, and on whether that criterion could reasonably be interpreted to require bidders to provide supporting data to establish the training “outcomes” that they had achieved in prior training assignments:

Having regard to the terms of the impugned decision and the reasons therefor proffered by the Department, the spotlight is firmly on Selection Criterion No. 1, which was formulated in the following terms:
Tenderers must demonstrate that they have the necessary experience to deliver high quality training programmes in the professional and technical areas they have indicated of similar scope to that described through the use of an example (or examples) of programmes delivered within the last three years. This shall include dates, outcomes and explanations as to why the experience is considered to be relevant to the particular professional and technical groups being tendered for.

The government maintained that the evaluation criterion was sufficiently clear to allow an experienced bidder to understand that backing data regarding training outcomes should have been provided with its bid. However, the complainant argued that the criterion was insufficiently clear and that it could have provided that data to avoid the rejection of its bid had the solicitation document clearly requested that information. After engaging in a detailed analysis, the Court ultimately agreed with the bidder and concluded that the government evaluators applied improper hidden evaluation factors since the criterion in question was too vague to support the requirement of supporting data:

 “Outcome” is an ordinary word, an unpretentious and unsophisticated member of the English language. Purely in the abstract, one can readily conceive of several synonyms for the word “outcome” – consequence, score, upshot, result and end product being prominent examples. While mindful of the importance of a contextualised approach, I observe that this simple exercise lends some weight to the Plaintiff’s case, since none of these synonyms would be conventionally considered a precise equivalent. I accept that, in an imperfect world, there is no objective gold standard of clarity to be applied by the court in determining this issue. Ultimately, I consider the question to be one of degree: objectively, is the meaning of Selection Criterion No. 1 sufficiently clear? Would all reasonably well informed and normally diligent tenderers have construed it uniformly? On balance, I resolve this issue in the Plaintiff’s favour. I conclude that, in this context, the Department’s expectation that compliance with this criterion would require the provision by all bidders of data relating to achievements, success rates and destinations into positive outcomes arising out of previously delivered programmes is expressed with insufficient clarity in the criterion as a whole and in the word “outcomes” in particular.

In coming to its conclusion, the Court also rejected the argument of the government evaluators that the term “outcome” had a sufficiently well understood industry meaning to support the provision of backing data as an implied requirement under the challenged criterion:

I further reject the Department’s claim that the word “outcomes” has a well recognised meaning in the industry concerned. Mr. McVeigh’s claim to this effect was, ultimately, bare and unsupported assertion. I find that it is unsubstantiated and is confounded by several aspects of the evidence: the Department’s briefing publication (paragraph [5], supra); the terms of the equivalent selection criterion in two other comparable selection exercises; the formulation of an earlier draft of Selection Criterion No. 1; the extensive internal debate amongst four presumed experts generated by this aspect of the Plaintiff’s tender; the detailed and elaborate terms in which the Department has seen necessary to explain and define the word “outcomes” in this context; and the panel’s need to resort to CPD for advice on the discrete issue of whether it could properly reject the Plaintiff’s tender for non-compliance with this criterion. The phraseology of this criterion, in my view, gave rise to an unacceptable degree of doubt and uncertainty. While I take into the evidence bearing on this issue in its totality and acknowledge that there are factors pointing in both directions, the balancing exercise which I have performed clearly favours this conclusion for the reasons explained. To summarise, Selection Criterion No. 1 fails the test of sufficient clarity.

The Court therefore concluded that the government’s evaluation decision was legally invalid due to the manifest error in its interpretation of the evaluation criterion in question:

The next question is whether, under the umbrella of the first of the Plaintiff’s grounds of challenge, the impugned decision is vitiated by manifest error. The first conclusion which I make is that the Department was guilty of a very obvious error of this kind on account of the selection panel’s misinterpretation of Selection Criterion No. 1: the effect of the conclusion expressed in the immediately preceding paragraph is that the panel’s interpretation of this criterion betrays a clear error of law and is unsustainable in consequence

Turning to the second ground of complaint regarding the inconsistent use of post-bid clarifications, the Court ruled that the government also engaged in an unfair evaluation process since it allowed competing bidders to provide post-bid follow-up information while denying the complainant the opportunity to supplement its information with the missing supporting data. As the Court stated, the government evaluators interpreted the process rules too strictly since they only permitted minor “clarifications” from other bidders and did not allow the complainant the opportunity to provide the missing data even though the process rules did not restrict the post-bid collection of that additional information:

Having considered all the evidence, I am left in no doubt that the Department’s selection panel was in error concerning the relevant competition rule from beginning to end. I have set out in paragraph [25] above the relevant provisions of the ITT. In simple terms, the effect of these provisions was to devise a competition rule conferring on the selection panel a discretionary power to seek further information from tenderers. This power was not expressly circumscribed by reference to any threshold requirement such as ambiguity or inconsistency or incomplete data. The essential thrust of this power is acknowledged in paragraph 11 of Mr. McBride’s first affidavit, albeit at a more general level and without reference to these specific ITT provisions. All of the evidence clearly establishes that, duly guided by Mr. McBride’s advice, the exclusive focus of the panel was that of “clarification” of information contained in tenders. Having set off on this track, the panel then established a self-limiting boundary, or dividing line. This is expressed, for example, in paragraph 13 of Mr. McVeigh’s second affidavit. In brief compass, having formulated its self-denying ordinance, the panel’s approach was that it could not solicit anything further from bidders in the absence of some perceived “ambiguity or lack of clarity” in the tender. I hold that this was a misdirection, as neither of these thresholds was specified in the relevant competition rule. As a result, the panel clearly erred in law. I hold further that, in the event, the panel strayed from the boundaries of its self-devised approach.

As the Court concluded, “any objective observer would have viewed a request to the Plaintiff to supply the ‘missing’ information as fair, modest and reasonable in all the circumstances”. It therefore ruled that the government evaluation decision should be set aside as legally invalid. However, in its November 2012 decision, the Court of Appeal in Northern Ireland reversed this part of the trial decision. While one of the appeal judges agreed with the trial ruling on the issue of collecting more information after the submission of bids, the two-judge majority ruled that the specific process rules in the ITT did not permit the complainant to submit the missing information after the bid submission deadline:

Once tenders have been submitted those tenders in principle can no longer be amended either at the request of the contracting authority or of the tenderers. The principle of equal treatment precludes negotiation. For an authority to provide clarification runs the risk of making the authority appear to have negotiated with the tenderer. Tenderers cannot complain that there is such an obligation when the lack of clarity in their tender is attributable to their failure to exercise due diligence in the drafting of the tender. Article 2 of the Directive does not preclude the correction or amplification of a tender where on an exceptional basis it would be appropriate to allow such correction or clarification, particularly when it is clear that mere clarification or correct obvious material errors provided that such an amendment does not in reality lead to the submission of a new tender. The authority must treat the various tenderers equally and fairly in such a way that a request for clarification does not appear to have unduly favoured or disadvantaged the tenderer to whom the request is addressed (SAG ELV v Slovensko and Others [2012] EUECJ C-599/10 (29 March 2012 (paragraphs 36 et seq)).
Although a contracting authority is required to draft tender conditions clearly and with precision it is not required to make advance provision for all the situations, however rare, which could in practice arise. A condition in the document must be interpreted logically in the light of its subject matter and wording. Where the tender has been drafted in ambiguous terms and the circumstances of the case suggest that the ambiguity probably has a simple explanation or is capable of being easily resolved there is a duty to contact the tenderer. In principle it would be contrary to the requirements of sound administration to reject the tender in such circumstances without exercising the power of clarification. It would be contrary to equal treatment to conclude that in such circumstances the authority has an unfettered discretion – Antwerpse Bouwerken NV v European Commission T-195-08 10 December 2009.
The appropriate test to be applied to the question whether a criterion is clear and transparent is that stated by the European Court of Justice in SIAC Construction v Mayo County Council [2002] All ER (EC) 272. The award criteria has to be formulated in such a way as to allow all reasonably well informed and normally diligent tenderers to interpret it in the same way. The obligation of transparency also means that the adjudicating authority has to interpret the award criteria in the same way throughout the entire procedure.

However, while the Court of Appeal reversed the trial decision on the post-bid clarification issue, it upheld the first part of the trial ruling, finding that the government evaluators had conducted a flawed evaluation by misinterpreting the vague evaluation criteria to require the submission of backing data.

As this case illustrates, purchasing institutions should strive for clarity in drafting their evaluation requirements and should not assume that they can enforce specific information requirements under vaguely drafted criteria by relying on arguments that the detailed information could be read in as implied “industry standards”.

Furthermore, purchasing institutions should also strive to draft clear process rules so that the protocols surrounding the collection of post-bid information can be consistently understood by government evaluators and bidders so that all parties to the process share the same clear understanding regarding whether the process rules allow for the post-bid collection of missing information or preclude the collection of that information.

In this case, as in many prior cases, the trial and appeal rulings left a significant grey zone between acceptable post-bid “clarifications” and the unfair post-bid collection of new bidder information. In fact, the lack of consensus on interpreting the process rules went beyond the complaining bidder and government evaluators and also included the judges who adjudicated the dispute, with two judges (the trial judge and one Court of Appeal judge) interpreting the rules as permitting the collection of further post-bid information, while two other judges (the majority on the Court of Appeal) interpreting the same process rules as prohibiting the collection of that additional information. To avoid similar legal disputes, particularly when dealing with complex procurements, purchasing institutions should draft their process rules to enable the post-bid collection of additional information, particularly when dealing with evaluation criteria that could trigger the rejection of a bid. As this case illustrates, allowing for post-bid rectifications as a means of addressing interpretive misunderstandings over bid submission requirements is a preferred strategy to engaging in after-the-fact litigation and risking the nullification of an evaluation decision.