10/10/2018

R (in the application of Hersi & Co Solicitors) v The Lord Chancellor (as Successor to Legal Services Commission) [2017] EWHC 2667 (TCC) ("Hersi").

In the Hersi case the High Court considered the question of whether a contracting authority is under a duty to clarify an incomplete tender. The court concluded that a duty to clarify where an incomplete tender is concerned arises only exceptionally and it set out the principles to be applied in such cases.

The (then) Legal Services Commission ("LSC") conducted a public procurement process for the award of contracts for immigration and asylum and mental health work in the UK. Hersi submitted a tender for the opportunity along with 400 other firms but was unsuccessful due to the low score it achieved in the evaluation process. As part of the tender, there were 7 questions under the selection criteria which all applicants were required to answer. Hersi answered the first 3 questions but then failed to provide an answer to 4 out of 7 of the scored questions. Instead, these were left blank. As a result, the LSC awarded a "0" in respect of the 4 "blank" responses which meant that Hersi failed to obtain the required number of points to be awarded a contract. Hersi challenged the LSC's decision by way of judicial review.

Hersi argued that the LSC should have sought clarification of their "non-answers" and/or that the answers to the questions were plain from other parts of its bid and, should have been scored accordingly. Hersi also claimed that the LSC breached the equal treatment principle in its decision not to allow Hersi to clarify its bid given that (allegedly) the LSC afforded the opportunity for others to clarify their bids in comparable circumstances.

 

Duty to seek clarification: The court summarised, with reference to European and UK case law, the extent to which there is a duty to seek clarification of a tender.

The court confirmed that the duty on a contracting authority to clarify a tender only arises in exceptional circumstances.

It went on to confirm that:

  • a duty to clarify a tender may arise where the terms of the tender is ambiguous, but it will not do so in every case where a tender is ambiguous.
  • it will only arise where the terms of the tender itself and the surrounding circumstances indicate that the ambiguity probably has a simply explanation and is capable of being easily resolved.
  • such a duty may also arise where the error is simple, material, serious and manifest.
  • a duty to clarify a tender will not arise where any clarification or amendment would in reality lead to the submission of a new tender. This would be where a clarification goes further than to merely correct the error or ambiguity. In doing so, it was acknowledged that it is irrelevant whether a tenderer can prove that the tender would not be fundamentally altered by the clarification.

Hersi's claim failed. This was not a situation where there were obvious errors and/or ambiguities. Hersi had failed to submit a fully complete tender. The tender documents were clear on the consequences of failing to answer a question. On this basis, the court held that LSC was entitled to act in accordance with the conditions of the tender and evaluate Hersi's bid at face value; assuming that the blank responses (non-answers) meant that Hersi was not able to offer the required type or level of service and to score accordingly.

 

Equal treatment: Hersi also claimed breach of the principle of equal treatment, arguing that the LSC treated the tenders of numerous other applicants differently. Hersi sought to make comparisons with the treatment of over 120 different firms in the competition, regardless of whether they were successful or not. The court concluded that the comparison exercise was misconceived and could not demonstrate a relevant failure to comply with the equality principle as bidders in the same situation as Hersi were treated identically. In addition, there was no European or UK authority to necessitate or encompass such a comparison exercise. Hersi's claim therefore failed on this ground as well.