This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its September 2020 decision in A C Whyte & Company Limited v. Renfrewshire Council, the Scottish Court of Session rejected a bid protest brought by a losing bidder who claimed that the tendered contract was awarded to a non-compliant competitor. The dispute dealt with an Invitation to Tender (ITT) for external construction work on residential properties. To be eligible for award, the ITT required companies to confirm a minimum annual turnover rate of business of £10 million over the prior three years. While, as required by the ITT rules, the winning consortium provided a self-declaration to confirm that it met that requirement, the losing bidder challenged this assertion, claiming that the Council had the responsibility to investigate the claim and verify the self-certification. The Court disagreed.
In its judgment, the Court found that the Council was entitled to rely on the declaration provided by the winning consortium, and that the solicitation rules did not require Council to collect information to verify the self-certification. While the complainant alleged that the winning consortium had improperly included inter-company transactions in its calculations when attesting to the £10 million turnover rate, and while the Court agreed that the absence of information regarding inter-company trading made it impossible to determine the actual combined turnover rate of the three companies, the Court found that there was no duty to require the consortium to provide consolidated accounts to confirm the accuracy of the attestation. As the Court determined, neither the ITT rules nor general accounting rules required that a consortium provide that information for the purposes of group bidding. As the Court stated, “it is a sufficient answer to this point that the ITT did not provide for any such adjustment, and accordingly there was no obligation on the council to investigate the matter.” Further, the Court noted that it was “common ground between the expert witnesses that neither company law nor financial reporting regulations required a consortium to prepare or submit consolidated accounts.”
The Court ultimately determined that the Council was entitled to take the attestations at face value and that “there was no failure to assess the competing tenders in accordance with the terms of the ITT”. As this case illustrates, public institutions have the right to rely on bidder self-certifications when determining bid compliance. However, to better avoid post-bid disputes, those purchasing institutions should clearly identify when tender compliance requirements will be confirmed through self-declarations and when they will be subject to more active post-bid fact-checking, since leaving those protocols open to interpretation exposes their compliance assessments to higher risks of litigation.
