At the start of 2023, the High Court issued a judgment following an interesting public procurement case. It serves to highlight some important lessons to public sector organisations and also private sector organisations wishing to work with the public sector.
Tender evaluations have been a hot topic among procurement challenges in recent years. It is one of the most important stages in a procurement process, but there is not much by way of statutory guidance. So it is useful to learn lessons from others in this complex area.
The case
The case was brought by Bromcom Computers, one of the country’s leading edtech companies, against United Learning Trust, one of the country’s largest multi-academy trusts.
United Learning had 72 schools, and advertised an opportunity to provide management information system (MIS) software for 57 of them. The remaining 15 schools were already using cloud MIS software provided by Arbor Education, and those 15 were excluded from the tender exercise.
The breaches by United Learning were sufficiently serious that a damages award is expected to be made
Bromcom and Arbor were shortlisted, and United Learning awarded Arbor the contract after an evaluation process. Bromcom challenged the decision on several grounds and the judge found in Bromcom’s favour.
The breaches by United Learning were sufficiently serious that a damages award is expected to be made to Bromcom at a future hearing. Considering the high legal costs of procurement trials, this is going to be very costly for United Learning.
Lesson 1: systems
Public sector organisations need to have systems in place for how to receive tender submissions from potential suppliers.
United Learning allowed Arbor to submit its tender by way of a Dropbox link to an online folder. Arbor continued to have access to this after submitting its final tender and even after the tender deadline.
The judge found that United Learning should have required the submission to have been made via a secure portal hosted by United Learning. This would have allowed them to record the exact time and date of receipt to determine compliance with relevant public contracting rules.
Lesson 2: evaluations
Public sector organisations must conduct evaluations in accordance with the process outlined in the invitation to tender (ITT).
United Learning opted not to award scores from zero to five, as the ITT had indicated. In a clear breach of important procurement principles, United Learning ‘averaged’ the scores of each evaluator on the panel.
The averaging approach led to erroneous underlying scores. In addition, United Learning was not able identify its own reasons (as distinct from the individual evaluator’s reasons) for the scores awarded.
The court found that the use of an averaging method and the absence of any proper moderation was contrary to procurement law.
Lesson 3: unfair incentives
Interestingly, Arbor had included in its tender price an offer of financial incentives (rebates) relating to the existing contract that they had with the 15 schools, which were not part of this tender.
The court agreed with Bromcom that Arbor was ‘seeking to leverage its incumbency’ as a supplier of services to other schools within United Learning, and this was not in compliance with procurement law, as other bidders did not have this opportunity.
Lesson 4: evaluation panel
This case illustrates the critical importance of having a well-trained evaluation panel. Panel members need to be carefully selected and have a clear understanding of the authority’s specification, award criteria, marking scheme and general tender rules.
Bromcom’s challenge was successful, but presumably it would have preferred to have been treated fairly
The court found that individual evaluators made several manifest errors when scoring the quality responses. This included errors where individual members gave Bromcom a lower score for providing a response that was completely in line with the marking scheme set out by United Learning.
Lesson 5: key skills
The public sector market is highly regulated and competitive, and is open to challenge where rules have not been followed. To safeguard their position, organisations should ensure they have sufficient technical capability to conduct a compliant procurement process or seek professional help.
A win, but…
Bromcom’s challenge was successful, but presumably it would have much preferred to have been treated fairly and won the tender. United Learning was shown to have made serious errors in the way it conducted this procurement. The judge concluded it was wrong to award the contract to Arbor.
Given the lack of statutory guidance in this area, it is not surprising that public sector organisations experience difficulties complying with the requirements and risk being challenged by aggrieved bidders.
Learnings for the private sector
- Private sector suppliers must not include any financial incentives in their bid that relate to other services outside the scope of the contract in question.
- They should read the tender documents thoroughly and raise any irregularities immediately.
- Suppliers should consider themselves part of a large network of providers to the public sector. They need to apply ‘big picture’ thinking.
- They need to understand that processes are undertaken in a transparent and equitable way, and not allow familiarity to affect their planning and preparation to submit their tenders.
