Procurement case law: the latest court decision considering the exclusion of bids, strict time limits, and implied contracts12/04/22
Excession Technologies Ltd sued the Police Digital Service (PDS). PDS ran a procurement to deliver a national network of surveillance operation rooms. Excession, one of the bidders, claimed that the PDS should have rejected another bid for being “abnormally low” and claimed there were errors made in the scoring of bids contrary to The Defence and Security Public Contract Regulations 2011. The claim was dismissed by the Technology and Construction Court.
Read on for a summary of the case’s main questions and what the judgment means for you.
The key issues discussed in the judgment
There was a two-day court hearing in August 2021, followed by written submissions in November/December 2021, resulting in judgment on 25 February 2022. Mrs Justice O’Farrell DBE considered three main questions.
1.) Was the PDS entitled to rely on the exclusion in Regulation 7(1)(b) which says the Regulations do not apply “for the purpose of intelligence activities”?
In the judgment on 25 February 2022, the Court said “yes”; the PDS can rely on Regulation 7(1)(b). The words “for the purposes of” extends also to projects whose object is intelligence.
2.) Was part of the claim time-barred due to the requirements of Regulation 53, namely that proceedings are started within 30 days from when the economic operator first knew or ought to have known of the grounds for challenge?
The Regulations don’t apply here but, if they did, the Court needs to consider:
- the relevant breaches;
- the date on which they occurred; and
- the date on which Excession had knowledge of the facts which apparently and clearly indicated (though need not absolutely prove) an infringement.
Excession was time-barred on claims based on duties owed, the abnormally low tender and the failure to provide sufficient and proper information on pricing. The court does have discretion to extend the 30 day period but the Judge decided that there was no good reason for the delay between the alleged breach and issuing proceedings.
The claims made on manifest error in the marking of the tenders were brought within 30 days so would not have been time-barred.
3.) Was the procurement governed by an alleged implied contract between Excession and PDS?
It’s a well-established legal principle that contracts can be implied through tender conduct, but this wasn’t the case here. The obligation under implied contract is to consider bids in good faith. The implied contract cannot provide detailed terms about the basis upon which bids should be evaluated.
Capsticks’ view on why the case is significant
- Due to the wide interpretation of regulation 7(1)(b) to projects with the object of intelligence.
- It highlights the importance of not missing the 30 day period for bringing a procurement challenge and, if you have missed the deadline, being able to fully and persuasively explain the reason for the delay.
- It reminds us of the limits of implied contracts in procurements.
A copy of the judgment is here.
How Capsticks can help
Capsticks acts for public and private sector clients. With extensive knowledge of contract and procurement law, our specialist team are always on hand to review and advise on procurements, potential exclusion of bids, and support you with all aspects of the procurement challenges (with experience of acting for claimants and defendants).
Please speak to Jane Barker or Mary Mundy to find out more about how Capsticks can help.