By: Paul Emanuelli
This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
Recent legal decisions highlight the importance of establishing transparent bid evaluation criteria and procedures to guard against allegations of improper evaluation and award decisions.
For example, in the July 2021 decision In the Matter of a Complaint by Commercial Truck Equipment Corporation Against Beaver Emergency Services Commission, an arbiter appointed pursuant to the New West Partnership Trade Agreement Bid Protest Mechanism dismissed a bid protest filed against an Alberta municipal firefighting agency after rejecting allegations of bias and improper scoring in the evaluation of water tank bids.
While the complainant alleged that the Commission used inconsistent scoring criteria, the arbiter rejected the complaint after finding that the evaluators had followed the established scoring criteria. Further, the arbiter found no evidence of bias in the specifications or in the evaluation process. In fact, the arbiter found that the complainant had breached the single-point-of-contact protocols by circumventing the official contact person and directly lobbying the fire chief to attempt to influence the outcome of the bidding process. While the protest was ultimately rejected, this case illustrates how even small public entities face the risk of bid protest challenges and must be prepared to defend themselves against allegations of improper evaluations and bias.
Similarly, in its November 2020 decision in OLM Systems Limited v Fife Council, the Scottish Court of Session rejected a bid protest after finding no evidence to support allegations that the evaluators were coerced into changing their scores. The dispute dealt with a solicitation for a new municipal software system. The complainant, who was the incumbent software provider, ranked third in the evaluations and alleged that its proposal was improperly scored during evaluator consensus scoring sessions.
In summarizing the legal standards that apply to the evaluation process, the Court confirmed that the principle of transparency requires that the scoring be performed in a manner consistent with the criteria established in the solicitation without changing those criteria or adding new criteria during the evaluations. Furthermore, the Court noted that the principle of equal treatment calls for consistency in how the scores are allocated to competing bidders in a non-discriminatory manner. Finally, the Court confirmed that evaluators must maintain records of their process to explain the results to unsuccessful bidders and enable the courts to review those results.
As the Court summarized, the evaluators used a five-option scoring key with predefined standards to guide the scoring. Further, the individual responsible for moderating the group scoring sessions and consolidating the final scores testified that every evaluator was given an opportunity to speak during the sessions and that no single evaluator dominated those discussions or exerted undue influence over the scoring.
The Court ultimately rejected the complaint, finding that the evaluation was conducted in accordance with a predetermined two-staged process where the evaluators scored each submission individually and then participated in moderated consensus scoring sessions that facilitated the consolidation of the final scores. In rejecting the complainant’s allegations that undue influence was exerted over the evaluators during the consensus scoring sessions, the Court found no evidence “that pressure was being placed on the evaluators to agree on a score contrary to their individual judgement.” Further, the Court found that the evaluators were not subjected to time pressure during the consensus scoring sessions that would result in a pressure to agree on scores. Rather, the Court found that the evaluators were given the opportunity to seek further information and defer their scoring if required to consider that additional information.
While the complaint was ultimately rejected, this case highlights why public institutions need to adopt rigorous group evaluation procedures that protect the independence of individual evaluators against future allegations of undue influence and why those institutions need to rely on transparent criteria and thorough record-keeping to demonstrate the consistency of how competing proposals were scored to arrive at the final rankings.
In fact, inconsistencies in scoring procedures can result in successful legal challenges. For example, in its November 2020 decision in IDS International Government Services, LLC, the U.S. Government Accountability Office (GAO) found that the scoring rubric applied by evaluators was inconsistent with the criteria established in the solicitation document. The dispute dealt with a Request for Proposals (RFP) for operations and maintenance services in Afghanistan. The complainant alleged that the prior experience criteria were scored inconsistently by the evaluators.
The GAO agreed, finding that the RFP stated that the prior experience of each proponent would be evaluated, whereas the scoring rubric guided evaluators to score the proponent’s “understanding and approach to the requirements.” As the GAO explained, “it is unclear whether offerors will be evaluated based solely on the information requested for this evaluation factor–i.e., experience–or whether offerors will also be evaluated based on different information concerning their understanding and approach to the requirements.” The GAO therefore sustained the protest and ordered the agency to amend its solicitation document to “clarify what offerors should address in their proposals and how the agency will evaluate proposals.” As this case illustrates, to avoid successful legal challenges, evaluators must ensure that there are no inconsistencies between the definition of the evaluation criteria in the solicitation document and the factors that are relied on to score those criteria during the evaluation process.
Similarly, in its January 2021 decision in OneSource PCS, LLC, the GAO ordered a re-evaluation after finding that the evaluators gave proponents points for general prior experience in a scoring category that called for specialized prior experience. The dispute dealt with a Request for Proposal (RFP) for healthcare services, including optometry services, for the Department of the Air Force. While the solicitation called for prior experience in a specialized area of optometry, namely in the care provided to patients undergoing photorefractive keratectomy (PRK) and other refractive surgeries, the evaluators assigned points to proposals that only provided prior experience with general optometry services. As the GAO stated, the agency’s evaluators did not act reasonably when they determined that “experience providing personnel skilled in performing general optometry and surgical skills was similar or essentially the same as providing personnel skilled in assisting in PRK and other refractive surgery procedures.” The GAO ordered a re-evaluation. As this case illustrates, government evaluators should ensure that their evaluation scores align with how the evaluation criteria were originally defined in the solicitation documents since their scoring is subject to a high level of after-the-fact scrutiny when evaluation and award decisions are legally challenged.
The principles of transparency and consistency also apply to the overall method used to arrive at final ranking and award decisions. This poses distinct challenges in multiple award solicitations. For example, in its July 2020 decision in Northstone (NI) Ltd v Department for Regional Development (Transport NI), Northern Ireland’s High Court of Justice found that the government failed to clearly define the rules that would apply to the allocation of contract awards to competing bidders in a multiple award solicitation. The dispute dealt with a tender call issued by the Department of Regional Development (DRD) for eight road resurfacing contracts across Northern Ireland. One of the bidders, referred to as McQuillans in the decision, scored first across six of those eight areas. However, as the Court noted, McQuillans only had resources to service four of those eight areas.
The Court found that the DRD failed to define the evaluation and award rules that would apply if a bidder ranked first in more areas than it had the resources to service. Rather, DRD improvised an award process that allowed McQuillans the right of first refusal to cherry-pick which awards it would accept or decline. A competing bidder took issue with the lack of transparency in this process. The Court determined that “in the absence of any rules, McQuillans was given an untrammelled discretion which necessarily meant that runners-up were not treated equally and transparently.” The Court concluded that “in this case the rules were neither clear, precise nor unequivocal.” In fact, the Court found that “there were no rules.”
As the Court further detailed, the “process was opaque and most certainly not transparent” and that the “treatment of the unsuccessful runners-up was unequal and discriminatory.” With respect to the due process duties owed to the other bidders, the Court held that “no explanation has been offered as to why the DRD should apparently have given McQuillans the exclusive power to determine which runner-up succeeded and which runner-up failed in the six Contracts it had been assessed as winning.” This breached the duties owed to those bidders since “each second ranked tenderer was entitled to be able to verify that it had been treated equally to other second ranked tenderers in the DRD’s attempt to resolve the eminently foreseeable problem of duplicated resources.”
The Court also noted that in subsequent solicitations, the DRD announced a protocol stating that “in future tender competitions, the maximum number of contracts to be awarded to any single contractor will generally not exceed 50% of contracts released for tender” and that “the allocation of multiple contracts will be completed in a pre-determined order and will incorporate a review of the contractor’s financial standing.” However, the Court concluded that at the time of the challenged evaluation process, those rules were not clear, and that this lack of transparency undermined the defensibility of the resulting contract award decisions.
To exacerbate the lack of transparency, the DRD failed to provide any minutes of the meetings where the award decisions were made. The Court concluded that DRD had committed a “manifest error” in its evaluation and award decisions that entitled the complainant to damages. As this case illustrates, public institutions need to clearly define their evaluation criteria, along with the protocols that they will use to inform their evaluation and award decisions.
In summary, the failure to properly define evaluation criteria and procedures and maintain proper evaluation records evidencing the consistent application of those rules, will undermine the downstream defensibility of any evaluation and award decisions.
