Breaches of procurement procedural rules

On 28 February, an article in the HSJ about a staffing agency case in the High Court caught our eye as we are conscious of the staffing issues many of our clients continue to face. It turned out the case relates to alleged breaches of procurement procedural rules.

As these procurement issues are definitely outside the comfort zone for employment lawyers, and we thought our NHS HR clients may feel likewise, we asked our colleague, public sector procurement specialist Martin Vincent, to explain the key points for us! So here is Martin’s helpful synopsis, which we hope you find as useful as we have. 

In collaboration with Crown Commercial Services, Guy's and St Thomas' NHS Foundation Trust put out an invitation to tender reference RM6281 entitled “National Framework for the Provision of Clinical and Healthcare Staffing” on 13 Feb 2023; essentially a staffing agency contract. While we await the implementation of the Procurement Act 2023 (expected to be later this year), this procurement was conducted subject to the Public Contract Regulations 2015 (“PCR”) under which authorities owe certain duties to bidders. One of the bidders, “NL Group” was notified that they had not been awarded a place on the framework. NL Group issued proceedings in the High Court.

PCR litigation is very unusual. This stems from the fact that the courts recognise that litigation lasting months or years is incompatible with letting authorities get on with the business of discharging public duties. Accordingly, all of the stages in PCR litigation are squashed together, which means that neither side has time to breathe and consider their position before legal costs skyrocket and management time is simply eaten up. For historic reasons, these claims are dealt with by the Technology and Construction division of the High Court with their own dedicated “track” which is the process in which the litigation is dealt with by the court.

It is not clear whether it is applicable in this case, but if proceedings are issued before the contract is entered into the claimant gets the benefit of an automatic injunction preventing contract award that the authority must apply to the court to get lifted. One-upon-a-time in procurement litigation, this was granted as a matter of course but in the last couple of years expedited trials have been ordered and the injunction left in place — leaving the authority in indefinite limbo.

According to the HSJ, NL Group claimed:

• the authority used “undisclosed sub criteria” in the assessment of the bid. This is denied by the authority, but if true, is about as naughty as it gets in procurement-land as it is a breach of the duty to act “transparently” set out in the PCR; and
• the authority marked their tender too low on some quality questions.

The duty to act transparently is statistically the most litigated provision of the PCR. Basically, it boils down to the question “does the bidder know what you’re really looking for”. Here the authority relied on the well-established principle that you are allowed to expect a bidder to be experienced and to understand roughly what you are looking for. This is clearly a matter that can only be determined on the wording used in the question, but authorities routinely get into trouble about their assessment / marking of bidders’ answers:

• in using “model answers” that might not reasonably flow from the question (sometimes they are just plain wrong, too);
• in the notes taken by the markers not following the disclosed criteria and straying from the question asked, often this is due to ambiguity in the note taking but it’s a problem for the unwary.

Our advice: Don’t give bonus marks for things that you like in the answer but that weren’t asked for; this goes back to the need, when drafting the questions in the first place, to apply the principle “when in doubt, set it out” after all, aren’t you wanting the bidders best answer? Also, take proper advice on the recording of the assessment.

When alleging mis-marking, the claimant is traditionally on sticky ground. The authority has a “margin of appreciation” and the claimant has to show a “manifest error” ie that the authority was very, very wrong in coming to the score it did. Beware, though:

• of perfect scores for anybody. A perfect answer? Really?
• that there is consistency between the assessment of bids. At the moderation exercise (please tell me you have them), look for common themes in the answers and make sure you challenge any “outliers” in the marks given by individual markers.