Bidder Error – Does it really matter?

Tender processes are often complex and detailed, requiring considerable work from both suppliers and commissioners to ensure that bids comply with the requirements of the procurement process. Inevitably, mistakes slip through from time to time. It is also often difficult or impossible for a commissioner to determine if an error has been made without seeking clarification from the bidder, but commissioners are also at risk of allegations of unequal treatment or favouritism if they permit a bidder to ‘clarify’ a bid in a way that improves it or gives the bidder another opportunity to tailor their submission.

The Court of Appeal has recently handed down its decision in Working On Wellbeing Ltd (t/a Optima Health) v SoS for Work and Pensions and Department for Work and Pensions [2025] [2025] EWCA Civ 127, setting out a clear structure for commissioners to assess potential errors and consider how to respond. This case is likely to be central to future disputes regarding clarification or correction of errors, and is an important decision for both commissioners and bidders to be aware of.

Background

The DWP sought to call off from a framework agreement for occupational health and employment assistance programme services. Optima Health, was one of five bidders. The ITT stated that bids exceeding framework prices for any item would be “discounted”. More generally, the DWP retained a right to exclude any non-compliant bids from the procurement process. The pricing schedule required bidders to submit prices for 133 line items, with a total of 190 prices that needed to be filled in. Not all of the items were expected to be purchased under the contract initially (but could be included in future).

Optima submitted a bid including a pricing schedule that exceeded the framework prices for three items and was consequently excluded by the DWP on the basis that its bid was non-compliant. Only one bidder submitted a fully compliant bid and was awarded the contract. Had it not been for the errors in Optima’s final pricing schedule, Optima would have been successful. Notably, the errors in Optima’s final schedule made a difference of 0.02% to the overall price.

Optima averred that its exclusion from the bid was contrary to the key principles of transparency, proportionality and equal treatment under the Public Contracts Regulations (“PCR 2015”). The errors that ultimately disqualified Optima from the process were said to be “cut and paste” errors in the DWP’s evaluation process – “obvious” clerical mistakes. Optima’s key points were:

1. That it was not clear from the ITT that exceeding the framework maximum price would lead to exclusion from the procurement process in its entirety.
2. When considering whether to seek clarification from Optima, the DWP failed to exercise its discretion properly or at all and concluded that it had no option but to disqualify Optima’s bid.
3. The DWP had an obligation to seek clarification here but did not.

The First Instance Judgment

At first instance, the Judge concluded a reasonably well-informed and normally diligent (“RWIND”) would appreciate that exceeding any of the maximum framework prices could lead to disbarment from the process. Further, a decision to permit clarification could have put DWP at risk of infringing the principles of transparency and equal treatment, and the decision to reject Optima’s bid was lawful.

The Appeal

The decision was appealed by Optima on the main grounds that the Court had erroneously concluded:

• That there was a clear rule of mandatory exclusion
• That the DWP was not obliged to let Optima correct errors in its bid.

On the first ground, there was a keen focus on the interpretation of the term ‘discounted’. The Court of Appeal found that a RWIND bidder would understand the term “discounted” to mean that any prices that were more than the maximum would be reduced by the DWP so as to comply with the framework, rather than to interpret the term in the way in which the DWP had applied it – to ‘exclude’ a bidder from the procurement process in its entirety. As such, the appeal was allowed.  This highlights the need to ensure that consistent terminology is used throughout tender documents as if different words are used, the Court will assume that that is deliberate.

The Court of Appeal then went on to consider whether the approach adopted by the DWP in considering potential errors by suppliers, once identified, was correct. Coulson LJ’s judgment sets out a detailed structure for how these decisions should be taken.

First, the contracting authority should consider whether the potential error or inconsistency matters. If it does not (in the sense that it would not impact on the assessment of tenders), there may be no need to clarify at all.

Secondly, the contracting authority should consider whether it is able to determine whether an error has been made or not. Very often, it will not be clear whether something is an error, or a deliberate non-compliance. In those situations, the contracting authority should make appropriate enquiries of the bidder, to establish whether the issue is an error at all. If it is not an error, it would not need to be corrected (and the contracting authority would then consider the implications of that position, in line with the process in its tender documents).

Thirdly, if there has been an error, the contracting authority should consider whether that error can be corrected lawfully. The Court emphasised that, while the prior caselaw is clear that a bidder should not be permitted to submit a substantially new bid, or “to have another go” at submitting a tender, in many circumstances it may be permissible for a bidder to amend its bid, including its pricing, without that amounting to a ‘new bid’.

A contracting authority is entitled to assume that tenderers have undertaken their task properly and in accordance with the rules of the ITT, and is only required to address ‘obvious’ errors or ambiguities. However, once the possibility of an error has been identified, a contracting authority may be obliged to seek clarification, without prejudging what the answer may be, and then to consider whether to permit the clarification.

The Court further emphasised that principles of procurement law are a means to the end of a fair and effective competition, and permitting the tenders received to be properly evaluated, in the best interests of the contracting authority and the public. “What is to be avoided is a strict and over-literal approach which may lead to the exclusion of the best tender for no objectively justifiable reason”.

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