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Procurement Update: What’s In a Word? A Lot - According to a Recent Decision

04 September 2018

In June 2018, the Court of Appeal delivered its third, and substantive, judgment in Word Perfect Translation Services Limited v Minister for Public Expenditure and Reform[1]. It overturned a High Court decision which had found that the contracting authority – the Minister for Public Expenditure and Reform – had not committed two manifest errors in the tender evaluation process involved in that case.

Background

Following publication of a request for tenders (RFT), the Minister, via the Office of Government Procurement, invited Word Perfect Translation Services Limited (Word Perfect), Translation.ie and another service-provider to tender against each other by means of a Supplementary Request for Tender (SRFT). The Minister awarded Translation.ie 15 marks more than Word Perfect, and selected Translation.ie as the preferred bidder.

Court of Appeal decision - a war of words

In the Court of Appeal, Word Perfect narrowed its original challenge to four grounds, two of which cited manifest error in the Minister’s scoring, with the remaining grounds concerning the evaluation and post-evaluation processes.

Manifest error

Mr Justice Hogan in the Court of Appeal applied the criteria for manifest error established in SIAC Limited v Mayo County Council[2] and the test for the interpretation and application of tender documents set out in Gaswise Limited v Dublin City Council[3]. In essence, these provide that:

  • The Court will afford contracting authorities a margin of discretion in interpreting tender documents and evaluating tender responses, but will interfere where they commit a manifest error and clearly fail to respect the principles of equality, transparency or objectivity; and
  • It is for the Court to interpret what tender documents mean, and, in doing so, it will seek to give effect to the core principles of equal treatment and transparency, and apply the reasonably well-informed and normally diligent tenderer’ (“RWIND”) test. Transparency requires that tender authorities design award criteria so that all RWIND tenderers will interpret them in the same way, and also that these authorities interpret those criteria the same way throughout the tender process.

Applying these tests, the two manifest errors found by the Court were as follows:

  1. The first manifest error was rooted in what was meant by the word “narrative”. The SRFT requested tenderers to submit a sample management information report, referring both to the requirement to include “charts, graphs”, and so on, and a “narrative” summary. Translations.ie had provided charts and graphs, but did not provide a written account.

    On the meaning of the word “narrative”, Mr Justice Hogan applied the RWIND test, and found it would objectively be understood to mean a written statement. In awarding marks to Translations.ie for this criterion in the highest scoring band, which was only available where a tenderer “fully [met] or [exceeded] requirements”, the Minister had not interpreted or applied the award criteria in an objective, transparent and equal manner, exceeding any margin of discretion that could be permitted.
  2. The second manifest error was in relation to the SRFT requirement for tenderers to set out methods employed to “ensure” that interpreters retained their skills. Here, the Court found that the manifest error was in awarding full marks to Translations.ie for this criterion, in circumstances where it had merely stated it would “encourage” skills-retention but did not state how this would be ensured.

    Mr Justice Hogan found that it was impossible for the contracting authority to award a perfect score for a submission that did not completely comply with the SRFT’s requirements, without committing a manifest error which, again, was outside of any margin of appreciation allowed.

Consequence

In view of these two findings of manifest error, Mr Justice Hogan considered that the Court had “no alternative – not least given the closeness of the contest in the tender process[4] - but to…make an order setting aside the decision to award the contract to Translations.ie, in accordance with Article 9 of the 2010 Regulations”, thus requiring a further process to be undergone.

Other grounds of appeal

Word Perfect also complained that the process was flawed as a result of unexplained alterations in the evaluation scores that were being considered by the evaulators for the two rival tenderers as the process progressed, up until the final scores were arrived at. The Court of Appeal, affirming the High Court, found that there was – at least in this case – no duty on the evaluators to explain the progression of scores as between different stages of the evaluation.  The Court also found that, as a matter of policy, such a requirement would be undesirable, as it would stifle the necessary freedom of evaluators to reflect on the respective merits of the bids concerned. Consequently, it is only the final, published evaluation which contracting authorities must defend, and generally not the iterative process leading up to that final evaluation.

The Court of Appeal also affirmed the High Court in holding that a contracting authority need not, in its debrief letter to an unsuccessful bidder, provide reasons for scores of the preferred bidder in areas where the unsuccessful bidder outperformed the preferred bidder. It held that this was not provided for in the case law of the Court of Justice of the European Union, or in Article 6 of the European Communities (Public Authorities’ Contracts) (Review Procedures) Regulations 2010. The 2010 Regulations specifically state that the unsuccessful tenderer is entitled to a summary of “the reasons for the rejection of his or her tender” and of “the characteristics and relative advantages [not ‘disadvantages’] of the tender selected”.

The Minister has sought leave to appeal the Court of Appeal’s decision to the Supreme Court, and a ruling is awaited as to whether leave will be granted.

What implications does this case have for you?

For Tenderers:

  • Be careful when reading tender documents to interpret and answer each award criterion precisely and accurately.  For example, if, in the Word Perfect case, Translations.ie had set out a narrative summary under one criterion, and had set out its methods for ensuring staff would retain their skills on the other, Word Perfect’s challenge would have failed, and the contract-award would not have been set aside.
  • Give ordinary words in tender documents their objective, ordinary meaning, and industry expressions their ordinary industry meaning, as they would be interpreted by the RWIND tenderer. For example, when asked for a “narrative”, give a written account and not merely information by way of graphs, charts, and so on.

For Contracting Authorities:

  • When drafting tenders, ensure the award criteria are clear, precise and unambiguous, so that they will be interpreted by RWIND tenderers in the same way.
  • Be mindful of the RWIND tenderer, and how he or she will likely interpret the award criteria, as this is how they will have to be interpreted and applied in the evaluation.
  • Be careful when awarding marks during the evaluation process not to exceed your margin of discretion.  Only award marks that are permissible and sustainable according to the level of compliance a particular tender has achieved with regard to the applicable award criterion’s requirements. If the tenderer does not fully meet requirements, consider, for example, whether he or she can obtain full marks, or be scored in a scoring band that is premised on meeting or exceeding requirements.
  • While your final evaluation decision may be subjected to scrutiny by a court, ordinarily, the evolution of the evaluation process itself will not. Be careful, however, not to exceed the possible limitations on the freedom and flexibility the Court of Appeal has confirmed. For example, it goes without saying that arbitrariness, capriciousness, prejudgment or bias should form no part of that evolution.
  • In the reasons provided to the unsuccessful tenderer for the rejection of his or her bid under Article 6 of the 2010 Regulations, you need only provide the characteristics and relative advantages of the winning tenderer’s bid, and not that bid’s disadvantages vis-à-vis areas where the unsuccessful tenderer scored more highly.

For advice on the proper design, interpretation and evaluation of tender documentation, or on public procurement litigation, please contact a member of our Commercial or Public & Administrative Law teams. 


The content of this article is provided for information purposes only and does not constitute legal or other advice.


[1] Word Perfect Translation Services Limited v Minister for Public Expenditure and Reform (No. 3) [2018] IECA 156

[2] [2002] 3 I.R. 148

[3] [2014] 3 I.R. 1

[4] Translations.ie scored only 15 marks higher than Word Perfect, out of a total possible score of 1,000.

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