What’s in a name? Sometimes, a manifest error

The High Court has handed down judgment on 20 June 2022 in Braceurself Limited v NHS England [2022] EWHC 1532 (TCC). Mr Alexander Nissen QC heard the case, sitting as a Deputy High Court Judge.

Background

The claim related to the commissioning of orthodontic services in East Hampshire. The Claimant alleged a number of breaches of the Public Contracts Regulations 2015 (“PCR 2015”), almost all of which were unsuccessful. However, the Claimant successfully argued that there had been one manifest error of scoring in respect of one question, meaning that it should have received one more mark. Because of the closeness of the scores, that one mark difference resulted in the Claimant receiving a higher score than the successful bidder, and changed the outcome of the competition. Furthermore, the manifest error fundamentally turned on one word in the Claimant’s bid – the distinction between a ‘stair lift’ and a ‘stair climber’.

The Claimant made the following key allegations at trial, some other points having been withdrawn in the course of the claim or not pursued at trial:

• Breach of the duty of equal treatment
• Breach of the duty of transparency; and
• Manifest errors in scoring across 6 questions (either in the marks awarded to the Claimant, or those awarded to the successful bidder)

The Defendant successfully argued that it had not breached the duties of equal treatment or transparency, and that there were no manifest errors in the scores for 5 of the 6 questions. However, on one question, the Claimant showed that there had been a manifest error in scoring.

Manifest error

The question required bidders, among other things, to set out the reasonable adjustments they proposed in line with the Equality Act 2010 to facilitate access by disabled patients. The Claimant’s premises were located on the first floor, without lift access, giving rise to a potential issue around accessibility.

The Claimant proposed, as part of its bid response, that a ‘stair climber’ would be available to facilitate access by wheelchair users to the first floor premises. However, the evaluation panel at moderation, and the final agreed reasons for the score awarded to the Claimant, referred to the bid proposing a ‘stair lift’, which was considered to only provide limited accessibility.

In addition to this point, the evaluators incorrectly interpreted the Claimant’s bid as suggesting that patients might also be seen at an alternative temporary site (in the event that patients could not access the first floor property) and raised concerns regarding accessibility at the proposed site. This point did not form part of the feedback given, but was part of the discussions at the moderation meeting.

Prior to the moderation session, the majority of evaluators had individually given the Claimant’s bid response a ‘4’ for this question. However, at moderation, this was reduced to a ‘3’. Mr Alexander Nissen QC held:

“Accessibility was the sole area given in the feedback as a potential basis for improvement. This indicates to me that it was the key reason for the Claimant not having scored a 4. It was therefore material to the outcome.

 …in this case, the Defendant simply misunderstood the basis of the Claimant’s bid in two connected respects and therefore took into account matters which it ought not to have taken into account. Of the two, the point about the stair climber was obviously the more significant.”

Accordingly, the Court concluded that the misinterpretation of the Claimant’s bid was a manifest error. The Court further concluded that it was possible for it to reliably assess the impact of this manifest error and to determine that, had the evaluators interpreted the bid response correctly, they would have given the Claimant’s bid a score of 4 for this question, rather than 3. As such, the Court re-scored the Claimant’s bid for this question and awarded the Claimant a score of 4.

Given the proximity between the scores of the successful bidder and the Claimant, that one mark was sufficient to mean that the Claimant should have been successful overall.

Damages

Notably, the automatic suspension imposed under Regulation 95 of the PCR 2015 was lifted in November 2019, and the Defendant had subsequently entered into a contract with the successful bidder. As a result, the Claimant’s claim at trial only sought damages, quantified at just over £4.7m for loss of profit and bid costs, with unspecified further damages claimed in respect of goodwill.

Following the decision of the Supreme Court in Nuclear Decommissioning Authority v Energy Solutions EU Ltd ([2017] UKSC 34, claimants in procurement challenges must also show that any breach of the PCR 2015 was ‘sufficiently serious’ to justify an award of damages. Mr Alexander Nissen QC expressly reserved any decision on whether a single manifest error, resulting in one mark changing, would be sufficiently serious to justify an award of damages. It remains to be seen whether the Defendant will seek to argue that the single breach was not sufficiently serious for damages to be payable, even where that single error directly resulted in the Claimant not being awarded the contract, or if the parties will reach agreement on this issue outside the Court process.

Conclusion

Many contracting authorities are, understandably, concerned when there is very little difference between the scores of the first- and second-placed bidder in a procurement. This judgment serves as a stark reminder that care must be taken to ensure that the approach adopted in the evaluation and moderation of every question must be in line with the published procurement documentation and be able to withstand scrutiny. Even if the procurement is generally very well run, one error can have huge implications. The judgment is also likely to give encouragement to unsuccessful bidders in circumstances in which the scores are very tight. Succeeding in only one aspect of a widely pleaded claim may well get them the outcome which they are seeking.

The decision can be found here.

Hempsons’ specialist procurement team regularly advise both bidders and contracting authorities on potential challenges to the outcome of procurement processes.

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