No bid, no chance?

On 20 February 2023, the High Court handed down judgment in InHealth Intelligence Ltd v NHS England [2023] EWHC 352 (TCC). The judgment considers how the terms of an Invitation to Tender can limit the scope of a discretion which a contracting authority may have; the extent to which contracting authorities are responsible for the operation of an electronic portal used in a procurement exercise; and the circumstances in which an economic operator who has not submitted a bid may be permitted to participate in a procurement.

The facts of this claim were:

1. NHS England (“NHSE”) sought bids to provide Child Health Information Services (“CHIS”) across four Lots, covering the Greater Manchester, Midlands and East of England regions. Bidders could bid for anywhere between one and four Lots. There were generic questions which only required a single response and were only evaluated once, irrespective of the number of Lots bidders chose to bid for, and Lot-specific questions which were evaluated by a separate panel for each region. Bidders’ financial submissions were expressly stated to be ‘standalone’, in that no discount should be given if bidding for multiple Lots;
2. bids were to be submitted via an electronic portal, here provided by In-Tend Limited. The deadline for tender submissions was midday on 12 July 2022;
3. bidders were further expressly notified that all documents submitted in support of their bid had to comply with a stated naming convention, and that the portal “does not accept files with the same name”. The ITT stated that documents would be uploaded to both mandatory and discretionary placeholders, and all mandatory placeholders had to be filled in order to submit a bid;
4. the ITT further set out, in clear terms, that bids would need to be submitted prior to the tender deadline, and that NHSE would not consider “…any tender response received after the stated deadline and failure to submit a response by the deadline will result in the exclusion of the bidder from participating any further in this procurement.”;
5. InHealth Intelligence Limited (“InHealth”) intended to submit a bid for all four Lots, and began work on their tender submission in good time prior to the deadline. However, InHealth was still uploading documents required for their bid only minutes before the deadline for tender response;
6. at trial, it was established that the employee of InHealth responsible for submitting the bid made a mistake in uploading documents in respect of Lot 4 and had attempted to upload two documents with the same name (contrary to the instruction in the ITT), having seemingly placed one version of that document into the incorrect placeholder. As the document was already that (incorrect) placeholder, and because the portal would not permit two documents with the same name to be uploaded, the employee was not able to upload the document to the correct (mandatory) placeholder; and
7. due to the fact that a mandatory placeholder was not filled, InHealth was unable to submit its bid before the deadline passed. It was not in dispute that InHealth had uploaded all required documents and answered all of the questions for Lots 1-3.

InHealth brought a claim under the Public Contracts Regulations 2015, making the following key allegations:

1. the correct interpretation of the Invitation to Tender was that bidders were to submit separate bids for each Lot they wished to tender for, and hence InHealth should have been able to submit bids for Lot 1-3 irrespective of the fact that it had not been able to upload all required documents for Lot 4;
2. the error message generated by the portal upon InHealth attempting to upload two documents with the same name was insufficiently clear and was therefore not transparent; and
3. NHSE had a discretion to permit InHealth to participate in the procurement, notwithstanding the express terms of the ITT, and that NHSE’s decision that InHealth not be permitted to participate was manifestly erroneous and irrational.

The Court made the following key findings:

1. it was clear from the Invitation to Tender that bidders were required to submit a single bid, covering as many of the Lots as they wished to bid for. NHSE was not required to design the procurement, nor operate the portal, in a manner which permitted separate bids for each Lot;
2. that the starting point when assessing whether a contracting authority has a discretion is the terms of the ITT itself, and it is key to distinguish a situation in which the ITT reserves a wide discretion to a contracting authority from one (as was the case here) in which there is a ‘bright line’ rule which will be applied. However, a contracting authority which has stated unambiguously that it will apply a particular rule strictly will still have a discretion “to waive non-compliance with the requirements of an ITT if it is necessary to do so to ensure equality, transparency and proportionality of the procedure as a whole, and doing so does not offend against those same principles.”;
3. generally, it will not be in the bounds of the discretion for a contracting authority to waive a strict deadline for tender submission, where it has chosen to apply one (absent the reason for the bidder’s failure being attributable to fault on the part of the contracting authority, where fairness may in fact demand that the rule be waived);
4. on the facts of this case, responsibility for the error lay entirely with InHealth. The error message generated by the portal was clear (whether or not taken in the context of other messages produced as InHealth attempted to submit its bid). InHealth had allowed itself insufficient time to submit its bid and deal with the mechanics of bid submission. Had InHealth left itself more time, it would have been able to address its own error and submit its bid without any difficulty;
5. NHSE carried out an investigation of the reasons for InHealth being unable to submit its bid, and sufficiently assured itself of the position prior to making its decision that InHealth not be permitted to participate in the procurement; and
6. in the circumstances, NHSE’s decision that InHealth would not be permitted to participate in the procurement was not manifestly erroneous.

Consequences of Decision

This judgment clearly emphasises that the terms of the Invitation to Tender are a key factor when a contracting authority takes decisions in respect of a procurement. Here, the terms of the Invitation to Tender clearly set out the steps required of economic operators who wished to participate, and specified the consequences of failing to submit a bid by the deadline. Had the ITT been less clear, or reserved a wider discretion to NHSE to permit late bids in notwithstanding the deadline, NHSE may have needed to approach the decision on a different footing (albeit it may well still have been lawful for NHSE to refuse to accept a late bid). It is therefore important that contracting authorities take time to review and understand the requirements of the ITT and to fully understand the level of discretion afforded to them in respect of certain decisions.

The judgment also emphasises that decisions taken by a contracting authority around a single bidder may have a significant impact on other bidders, particularly where those decisions relate to a failure by one bidder to follow the rules of the procurement, which other bidders have complied with. When making decisions in the context of a regulated procurement, contracting authorities are required to act in accordance with their obligations of transparency, equal treatment, non-discrimination and proportionality, and must do so in respect of all bidders, even where the decision may seem to primarily affect only one or some bidders. Any decision by NHSE to allow InHealth’s bid into the procurement may well have been successfully challenged by another bidder in the process.

Finally, it is made clear that it is the responsibility of bidders to ensure that their bid is submitted on time. Leaving submission to the last minute is done at a bidder’s own risk. Even where an ITT offers the contracting authority a discretion to accept late bids, which in our experience is often not the case and is becoming even less common, bidders should assume that the consequence of making a mistake and missing the deadline will be terminal.

Hempsons acted on behalf of NHS England, instructing Rhodri Williams KC of Keating Chambers and Jonathan Lewis of Monckton Chambers.

The full judgment can be found here  Inhealth Intelligence Ltd v NHS England [2023] EWHC 352 (TCC) (20 February 2023) (bailii.org)