In a judgment handed down during December 2017, the Technology and Construction Court (TCC) has ruled that the Ministry of Defence (MoD) acted in breach of its obligations of transparency and equal treatment in taking a decision to reject a tender received from MLS (Overseas) Limited (MLS). As a result, the planned contract award has been halted and the current contract with MLS extended while the MoD determines the way forward.
This case related to a procurement run by the MoD under the Defence and Security Public Contract Regulations 2011 for the provision of port, maritime and logistical services to the Royal Navy. MLS was the incumbent supplier of these services and was one of five bidders selected to tender for the replacement contract. The tender submitted by MLS was commercially compliant, scored the highest mark for the technical evaluation and was the lowest priced. One question however, marked on a pass / fail basis, was marked as a fail. The question related to safety and following numerous internal discussions, the MoD took the decision to reject the tender as a result of the fail mark. A standstill letter was sent to MLS notifying the rejection of the tender stating that if not for the fail mark on the one particular question, the contract would have been awarded to MLS.
MLS commenced proceedings arguing that the Invitation to Tender (ITT) did not state that the consequence of achieving a fail for the particular question would lead to either a mandatory or discretionary exclusion of the tender. The MoD defended the claim on the basis that this would have been apparent to a reasonable tenderer.
The TCC examined the provisions of the ITT in some detail and found nowhere did it state that the response to the safety question would have any impact on the scores. The TCC did, however, note that in other areas of the technical evaluation where a minimum score was required, the ITT set out clearly that a failure to achieve that score would lead to the rejection of the tender. No such statement was included for the safety question – although a statement to this effect had apparently been included in a draft version of the ITT but had not made its way into the final version.
The TCC concluded that because the ITT did not make clear the consequences of a tender being awarded a fail for the safety question, a reasonable tenderer would not have been aware of the possibility of being excluded from the competition for a failure to achieve a pass for the question. The MoD was not therefore entitled to exclude MLS from the competition.
This case only serves to reinforce the important point that evaluation criteria must be set out correctly, clearly and unambiguously in procurement documents. This not only reduces the risk for contracting authorities of a successful challenge being brought to their procurements but also improves clarity for tenderers enabling them to prepare more focused bids. Arguably, there were failures by both parties to this litigation: by MoD in its failure to clearly set out the evaluation criteria and by MLS in its failure to fully answer all the questions in the ITT. The consequences of both are clearly significant; MoD cannot now award its contract as planned and MLS has not been awarded the contract. The importance therefore of contracting authorities clearly setting out evaluation criteria and of tenderers answering all questions fully cannot be overstated.
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