Matrix-Scm Ltd v London Borough of Newham

This is an application by the London Borough of Newham (“Newham”) to strike out proceedings issued against it on 11 January 2011 by Matrix-SCM Limited (“Matrix”) on the footing that the claims made by Matrix are either time barred or bound to fail in any event. The application is made pursuant to CPR Rule 24.2, alternatively pursuant to CPR 3.4.

The proceedings concern the procurement by Newham of a contract for vendor neutral managed services (“the Contract”) that was ultimately awarded to a competitor of Matrix, a company known as Beeline International (“Beeline”).

The facts are set out in the Witness Statements of Mr Rashid Patel (the Assistant Head of Human Resources at Newham), Sir Robin Andrew Wales (the Mayor of Newham) and Mr Julian Young (the Chief Executive of Matrix) and can be shortly stated as follows:

Matrix’s claims against Newham fall, broadly, into three categories:

Matrix also claims that the failures identified in (a) and (b) mean that Newham acted inconsistently and failed to act transparently (Paragraphs 65-67 of the Particulars of Claim), and that the manner in which the Pricing Element and Savings Element were to be calculated was not sufficiently clear at the time Matrix submitted its tender, and Newham therefore acted with a lack of clarity and failed to act transparently (Paragraph 68 of the Particulars of Claim). These further claims are in essence alternative legal arguments arising on the same facts relied upon to support Grounds 1 and 2.

Matrix contends that Newham’s alleged breach concerning the calculation of the marks for the price factor in the Tender, did not arise until the decision to award the Contract to Beeline was made. In relation to the other breaches (and the price calculation breach if, contrary to Matrix’s primary case, it did not arise until the award decision was made), Matrix contends that a reasonable tenderer in Matrix’s position could not have known of Newham’s infringements at the time the tender documents were provided to Matrix. Those infringements, Matrix alleges, only became reasonably clear once Newham had disclosed the relevant data contained in the Tender Evaluation on 8 October 2010, and Matrix had an opportunity to consider that document. If however it is wrong in this regard, then Matrix contends that the Court should grant an extension of time pursuant to Regulation 47(7)(b) of the Regulations and that as the Application is for summary judgment/strike out, the question for the Court is only whether Matrix has a real prospect of successfully establishing that it is entitled to such an extension. In relation to Ground 3, Matrix’s position, in summary, is that documents recently disclosed by Newham make clear that additional benefits that could be achieved by awarding the Contract to Beeline were wrongly taken into account by Newham during the Procurement, and it can not be said, based on untested bare assertions, that Matrix’s claim in this regard is hopeless. Accordingly summary judgment should not be given.

Newham denies any unlawfulness on its part in relation to each and all of the claims. However, for the purposes of the present application, Newham’s argument is that even if there were any such unlawfulness as alleged, the claims under Grounds 1 and 2 should be struck out on the footing that they are time barred under Regulation 47(7)(b) of the Regulations. Newham contends that any claims under Grounds 1 and 2 ought to have been brought by 18 June 2010 at the latest (3 months from the date the ITT was available on NECTR) and that the discretion to extend time should not be exercised. As to Ground 3, Newham contends that although not time barred, the claim has no realistic prospect of success at trial and should be disposed of now.

Before turning to the underlying facts in support of Matrix’s claims, it is necessary to set out briefly the present position on the authorities with regard to the application of the time limits under the Regulations, applications to extend those limits and applications to strike out claims made pursuant to the Regulations.

It is agreed between the parties that for the purposes of the present application, the time limits stated in Regulation 47(7)(b) of the Regulations (as they stood when the procurement commenced) apply. These provide:

“(7)

Proceedings under this Regulation must not be brought unless-

(a)…….

(b)

those proceeding are brought promptly and in any event within 3 months from the date when grounds for the bringing of the proceedings first arose, unless the Court considers that there is good reason for extending the period within which proceedings may be brought”

Regulation 47(7) (in its earlier incarnation under the Public Services Regulations 1993, but for present purposes, materially no different) was considered by the ECJ in Uniplex (UK) Limited v NHS Business Services Authority (C-406/08) [2010] 2 CMLR 47, and was found not to comply with EU law. The ECJ found that the requirement to act “promptly” infringed the principle of legal certainty and the principle of effectiveness was infringed because it ran from the date when a cause of action arose and the three month period might have expired before the claimant knew of the facts that might enable it to pursue a claim. Accordingly, the ECJ held that the period of 3 months provided for in national legislation should run from “the date on which the Claimant knew or ought to have known of the infringement of the public procurement rules” (paragraph 50).

The practical application of the ECJ’s dictum in Uniplex has been considered recently by Mann J in Sita UK Limited v Greater Manchester Waste Disposal Authority [2010] 2 CMLR 48, a decision which was upheld in February this year by the Court of Appeal reported at [2011] LGR 419. In large measure, the parties agree that the principles set out in Sita apply to the present application. In Sita, Mann J considered the application of Uniplex in the context of an application to strike out and/or for summary judgment of a claim for damages by an unsuccessful tenderer for a contract to provide waste disposal facilities in Greater Manchester. Whilst the facts of the case are not relevant and the argument in Sita was principally about actual knowledge (as opposed to constructive knowledge), in relevant part, Mann J held that:

In the Court of Appeal, upholding Mann J’s judgment, Elias LJ (giving the lead judgment) emphasised the application of what he termed “the principle of rapidity” (Paragraph 16) and affirmed Mann J’s formulation of fixing the point from which time runs as the date of actual or constructive knowledge of the infringement, with the relevant standard of knowledge being knowledge of the facts which apparently clearly indicate, though need not absolutely prove, an infringement (Paragraph 31; also Rimer LJ at Paragraph 90). Lord Justice Elias, with whom Lord Justice Rimer agreed stated:

“19.

At the heart of this case lies the question: what degree of knowledge or constructive knowledge is required before time begins to run? The knowledge must relate to and be sufficient to identify, the “grounds” for bringing proceedings, as it is expressed in Regulation 32(4)(b). The Directive does not use that word but instead Article 1 speaks of taking proceedings rapidly against a decision involving an “infringement” of Community law. The concept of “grounds” in the regulations must be read consistently with that concept of “infringement” as the judge below recognised (para 127). So the question becomes: when is the information known or constructively known to the appellant sufficient to justify taking proceedings for an infringement of the public procurement requirements? “

Sita was not a case about constructive knowledge, and where it can not be said that a claimant knew of facts that apparently clearly indicated an infringement, the question will become whether the claimant should have known of such facts. A claimant will have constructive knowledge if, upon reasonable enquiries, it should have discovered the alleged infringement. However, I accept Mr Randolph QC’s submission on Matrix’s behalf that in light of the rationale for the decision in Uniplex, the Court should be cautious not to impose too onerous a standard on tenderers who do not have actual knowledge of an infringement, and equally, should not require a claimant tenderer to take steps that would be regarded as unreasonable to discover the infringement.

As regards the exercise of the Court’s discretion to extend the three month period from the date of the requisite knowledge of the infringement, the approach adopted by Mann J in Sita, as affirmed by the Court of Appeal, is a strict one. As Mann J noted at Paragraph 174 of his Judgment, “Extensions are not to be lightly given, bearing in mind the purpose of the time limits in the first place”, and this approach accords with that adopted in a number of other cases under the Regulations and in applications for judicial review applying analogous provisions. As a general rule, the Court has recognised a strong policy interest in challenges to decisions being made rapidly, and this has manifested itself in a rigorous approach to when time begins and a concomitantly restrictive approach to applications to extend time. In Jobsin Co UK plc (t/a Internet Recruitment Solutions) v Department of Health [2001] EWCA Civ 1241, (a case pre- Uniplex and therefore with the 3 months time limit running from the date of the infringement rather that the date of knowledge of the infringement but nonetheless relevant to the exercise of the discretion generally) Lord Justice Dyson stated, in relation to the short limitation period:

“…..That is no doubt for the good policy reason that it is in the public interest that challenges to the tender process of a public service contract should be made promptly so as to cause as little disruption and delay as possible. It is not merely because the interests of all those who have participated in the tender process have to be taken into account. It is also because there is a wider public interest in ensuring that tenders which public authorities have invited for a public project should be processed as quickly as possible. A balance has to be struck between two competing interests; the need to allow challenges to be made to an unlawful tender process, and the need to ensure that any such challenges are made expeditiously”

This sentiment has been repeated in cases since Jobsin, such as Mears Ltd v Leeds CC [2011] BLR 155; Harry Yearsley Ltd v Secretary of State for Justice [2011] EWHC 1160 (TCC); Allan Rutherford LLP Solicitors v Legal Services Commission (“Rutherford”) [2010] EWHC 3068 (Admin); Parker Rhodes Hickmotts Solicitors v Legal Services Commission [2011] EWHC 1323 (Admin); Matra Communications SA v Home Office [1999] 1 WLR 1646.

However, as Mr Randolph QC correctly submitted, on an application to strike out/for summary judgment, the question is only whether the claimant has a real prospect of successfully establishing that it is entitled to an extension of time, and that the power to extend time, which is expressly provided for under the Regulations, exists for the very good reason that circumstances may justify the exercise of that power. Accordingly, the question on the present application (in the event that the claims are found to be time barred) is not whether the Court should exercise the discretion but whether it is plain enough at this stage that it can not be exercised.

As regards the relevant considerations in relation to any decision to grant an extension of time, these were recently summarized by Moses LJ in Law Society of England and Wales v Legal Services Commission [2010] EWHC 2550 (Admin), at Paragraphs 126-131 of the Court of Appeal’s Judgment, as

Although that case was undoubtedly exceptional-and found to be so by the Court of Appeal- concerning as it did, the process whereby the LSC sought to select those best equipped to provide legal services, which process resulted in a dramatic and unforeseen reduction in that number, the considerations outlined by Moses LJ are equally applicable to the present application.

Finally, as regards the applicable principles for the purposes of a strike out/summary judgment application in the context of a limitation defence under the Regulations, this too was considered by Mann J in Sita (ibid) (Paragraphs 14-19) and his judgment on this issue was again upheld by the Court of Appeal (ibid) (Paragraphs 40-41), with reference to the decision of the House of Lords in Three Rivers DC v Bank of England (No 3) [2003] 1 AC 1 and Swain v Hillman [2001] 1 AER 91. In short, the position is that claims should not be struck out “unless it can be demonstrated sufficiently clearly that [they] are bound to fail as a matter of law and/or fact and the Court should not determine a serious live issue of fact which requires oral evidence, or which requires the full scrutiny that a trial will bring to bear”. (Paragraph 16). As Mann J stated, “The real question for me is whether it is clear enough, at this stage, that the claim is bound to fail on limitation grounds and that a trial (or a fuller hearing of a preliminary issue) would not change that situation. Any doubt about it would have to be resolved in favour of the Claimant. When I make any determination in this matter whether of fact, law or discretion, I should be taken to be doing so on the footing that the point has been clearly established and that the same result would clearly be reached at trial” (Paragraph 18; upheld by the Court of Appeal at paragraph 40)

Moreover, as Mr Randolph QC was at pains to remind the Court, it is well established that in a summary judgment or strike out application the respondent is simply required to establish that its claim is not “fanciful” (Swain v Hillman (ibid) at p 92, per Lord Woolf MR). Where a dispute turns on an issue of fact, it will rarely be appropriate to seek to determine that issue at an interlocutory stage. (Day v RAC Motoring Services Ltd [1999] 1 WLR 2150 Ward LJ at 2157). See also Harry Yearsley Limited v Secretary of State for Justice [2011] EWHC 1160 (TCC) (paragraph 42).

I now turn now to the substance of the claims made by Matrix under Grounds 1 and 2

It is common ground that Newham expressly adopted the restricted procedure under the Regulations when procuring the Contract and therefore committed itself to awarding the Contract to the “most economically advantageous tender”. Consequently, as Mr Randolph QC rightly contends, pursuant to Regulation 4(3) and/or Regulation 16 and the statutory duty established by Regulation 47(1) of the Regulations, Newham was obliged to award the Contract on that basis and in accordance with that procedure, and it was obliged to treat tenderers equally and act in a transparent way. Indeed, this was confirmed by the Legal Officer of Newham in the Mayoral Proceedings document in September 2009, in which it was stated: “The contract will need to be tendered in compliance with EU treaty principles of transparency, non discrimination and equality”.

That said, and as expressly stated in the ITT and covering letter (dated 18 March 2010) the most `economically advantageous bid’ involved a consideration of a range of factors and evaluating the value of the bid by reference to the criteria stated in the ITT and Evaluation Model. It was based on a stated split of 25% price, 5% savings and 70% quality and full details of the scoring and evaluation methods were contained in the Evaluation Model. In the ITT itself, Newham made it clear that it did not bind itself to accept the lowest priced or any particular tender (Clause 7.1) and, importantly, tenderers were expressly requested to communicate with Newham via the NECTR online dialogue process if any points in the documents issued for the purposes of tendering were considered by the prospective tenderer to be unclear, in order that the tenderer might obtain a sufficient explanation before submitting its tender (Clause 3.1).

To understand Matrix’s complaints, it is necessary to set out in full the relevant sections of the ITT in the manner that they were published and received by Matrix.

The Evaluation Model further provided:

“4 / PRICING/COST OF SERVICE

4.1

Evaluation of Price

In line with the details contained in the Instructions to Tender, the price element of the Bid submissions will be evaluated on the basis of the lowest bid being awarded 25 marks. Higher bids will then be based on a percentage of the 25 marks according to the difference between each tenderer’s bid and the lowest bid.

4.2

Evaluation of Savings

In line with the details contained in the Instructions to Tender, the savings element of the Bid submission will be evaluated on the basis of the highest savings (based on the set of jobs and all additional costs) being awarded 5 marks. Lower estimated savings will then be scored based on a percentage of the 5 marks according to the difference between each tenderer’s savings and the highest estimated savings.

The Method by which savings will be generated should be answered within the relevant Method Statement

Example-Assuming for demonstration purposes only 3 companies were bidding

TABLE

Pricing comparison			Pricing 30% of total
	Total price	Savings	Score total price	Score savings	Minimum total cost	Max saving	Total price score
			25	5	15,000,000	600,000
Company 1	20,100,000	3,000	18.66	0.025			18.68
Company 2	40,000,000	150,000	9.38	1.25			10.63
Company 3	15,000,000	600,000	25	5			30.00

5 OVERALL EVALUATION

5.1

The contract will be awarded on the basis of the most economically advantageous tender and the evaluation will be based on a split of 70% quality, 25% price and 5% savings

Example- combining Total Quality Score and Total Price Score

TABLE

	Company 1	Company 2	Company 3
Total Quality Score	61.24	66.67	35.00
Total Price Score	18.68	10.63	30.00
Overall Score	79.92	77.29	65.00
Rank	1	2	3

On behalf of Matrix, Mr Randolph QC contends that the test set out at Section 13.1 of the ITT and the computation of the Pricing Element at Section 4.1 of the Evaluation Model, requires the following steps to be undertaken:

In short, Mr Randolph QC contends that Newham did not apply this test when it

Further, Mr Randolph QC submits that this alleged infringement by Newham, namely, its failure to apply the correct test in accordance with Section 13.1, was not apparent at the time Matrix first reviewed the ITT and Evaluation Model in March 2010 and was not readily apparent on the face of the documentation. Indeed, Matrix’s primary complaint is not aimed at any inherent deficiency or fault in the ITT or the Evaluation Model itself. Rather, the claim made by Matrix is that Newham failed to apply the test for the Pricing Element as clearly set out in the ITT and Evaluation Model and the test actually applied by Newham was not provided for anywhere in the documentation. Although Mr Randolph QC accepts that the scores determined by Newham appear to have been reached applying a formula corresponding precisely to that applied with regard to the hypothetical figures set out in the Table, according to Mr Randolph QC, because the Table did not contain any `working’ or alternative formula to the wording in Section 13.1 of the ITT and 4.1 of the Evaluation Model, the test set out in the Table was not that which should have been applied. Accordingly, the breach or infringement did not become apparent until Matrix was informed by Newham of how precisely the decision to award the contract to Beeline was made on 20 October 2010 and thus Matrix’s complaint to Newham in relation to this breach was made within the 3 month time limit.

Further, or alternatively, Mr Randolph QC submits that if the Table did set out a test for the Pricing Element, then Newham failed to act in a clear and consistent manner with regard to the Tender, because the Tender documentation set out two competing tests or formulas. Whilst Mr Randolph QC accepts that this allegation relates to an infringement that would be inherent in the ITT and Evaluation Model and thus would arise on 18 March 2010, he submits, based on Mr Young’s evidence (below) that Matrix had no actual knowledge that the tests set out in Section 13.1 of the ITT and Section 4.1 of the Evaluation Model on the one hand, and the Table on the other hand, were inconsistent prior to 20 October 2010, nor critically should Matrix have had such knowledge in the circumstances. In light of Mr Young’s evidence, Mr Randolph QC submits that a reasonable tenderer in Matrix’s line of business would not have discovered this infringement any earlier than 20 October 2010 and the Court should not find that Matrix had constructive knowledge before that date.

Mr Young’s evidence as to what he understood the position to be when he reviewed the ITT and Evaluation Model on receipt, is set out in his Witness Statement as follows:

Relying on this evidence, Mr Randolph QC submits that Mr Young’s actions, as an able and experienced businessman who regularly engages in procurement exercises, were the actions of a reasonable tenderer. Although Mr Young’s evidence (in paragraph 3.16 of his statement) was that he did not analyse the Table in any great detail, Mr Randoph QC submits that what Mr Young is saying by this is not that he did not give serious consideration to the tender documents (including the Evaluation Model) but that he did not consider it necessary to `reverse engineer’ the Table so as to derive from it a formula to rival that set out in Section 13.1 of the ITT and Section 4.1 of the Evaluation Model, in light of (amongst other things) the very clear wording of those sections. In short, the Table did not show in unambiguous, mathematical terms the meaning of Section 13.1 and Section 4.1-indeed, neither a brief nor extensive review of the Table made Newham’s approach plain. If, submits Mr Randolph QC, the Table had contained a worked example, it might be said that it would have been reasonable for Matrix to notice an inconsistency. But that, submits Mr Randolph QC, was not the case. The alternative approach, submits Mr Randolph QC, was hidden in the Table and it would be entirely unreasonable to expect anyone at Matrix to go searching for it. Accordingly, even if the Court were to conclude that the relevant infringement occurred prior to the date of the award of the contract to Beeline, Matrix was not and should not have been aware of that infringement until it obtained the raw prices submitted by Beeline and Matrix on 20 October 2010.

Mr Randolph QC put the arguments for Matrix very persuasively. However, in my judgment, they simply don’t hold up when one reads the ITT and the Evaluation Model (including the Table). In my judgment, the true position would and should have been abundantly clear to a reasonable tenderer in Matrix’s position on receipt of the Tender documentation in March 2010.

In particular,

In my judgment, even a brief consideration of the Table would have made plain Newham’s proposed approach and what at least Newham intended by the words in Section 13.1 of the ITT and Section 4.1 of the Evaluation Model. If there was any doubt about what was intended in Sections 13.1 and 4.1, in particular what was meant by basing marks upon the “difference” between the bid price and the lowest price, the Table resolved that doubt.

Indeed, taking the `Pricing Element’ in the Table and applying the formula stated in Section 13.1 and Section 4.1 what one sees very quickly is:

According to Mr Young, he expected the scoring methodology to be other than that applied by Newham in accordance with the Table, because he read the words in Section 13.1 as clearly suggesting a different approach to that in fact set out in the Table. However, accepting Mr Young’s evidence on this point, if, in fact the approach in the Table was therefore irrational, then this irrationality was patent on the face of the document. Likewise, if there was an inconsistency between the Table and the narrative text in Sections 13.1 and 4.1, and any resulting lack of transparency, that was also patent on the face of the document.

The answer to the problem in the present case lies in Mr Young’s own evidence. Mr Young says that when he reviewed the documentation “he did not consider it necessary to analyse [the Table] in any great detail” but “assumed…. that it simply put into effect the test set out in Section 13. 1 and Section 4.1 of the Evaluation Model” (Paragraph 3.16). I agree with Mr Giffin QC, that what this amounts to is an admission by Matrix that no one on the bid team gave proper or apparently any real consideration to the Table, in the 7 weeks or so between receiving the ITT and submitting its tender. Assuming, as I do for present purposes, that Mr Young’s evidence is true, then it is right that Matrix may well not have known about the matters of which it now complains. But, as Mr Giffin QC submits, it certainly ought to have known about them. It had all the information required in order to make precisely the complaint it now makes. The calculation that needed to be carried out to understand the scoring in the Table set out above was readily apparent from the Table.

What Matrix has to, but can not show in my judgment, is that its initial impression of the narrative/wording in Section 13.1 and 4.1 was so clear and unambiguous that it was entitled not to see how the example in the Table worked and therefore can not be fixed with constructive knowledge of how it worked. In other words, Mr Young has to show not just that his reading of the narrative was a reasonable one or even that it was the right one, but that it was so obvious, that he (as a reasonable tenderer) did not need to check the Table and was entitled to `assume’, as it appears he did, that the Table correlated to his understanding of the narrative in Section 13.1. That is a very high hurdle and in my judgement, Mr Young does not get over it. The contract Matrix was bidding for was a significant contract. Bidders were given several weeks to look at it before submitting their tenders. It was reasonable, in my judgment, to expect a bidder to take the not very time consuming step of seeing if the examples given in the Table matched its understanding of narrative in Section 4.1 and Section 13.1. Given Mr Young’s evidence of his clear understanding of how the narrative in Section 13.1 and Section 4.1 worked, it should have stood out from the Table that the scores had not been worked out by Newham in the way Mr Young thought. If Mr Young’s understanding had been borne out by the Table, on the examples given, Company 1 would have got 16.5 marks, as one would have

Accordingly, a reasonable tenderer, applying the test that Matrix did, would look at the example in the Table and either conclude that the Table did not support the narrative in Section 13.1 and Section 4.1 and therefore the tender was internally inconsistent and lacked transparency, or would read the Table as showing how the narrative was to be understood, and if he concluded that this was an irrational or unlawful way to proceed, he would complain that it was irrational and unlawful. Either way, the reasonable tenderer would have grounds to challenge the tender documentation immediately on review, and would not need to wait until told the basis on which the tender was rejected.

It follows that any claim under Ground 1 ought to have been brought by 18 June 2010 at the latest. It was not and is now time barred.

Matrix’s claims under Ground 2 focus upon the Savings Element. Again, Matrix contends that Newham adopted an incorrect criterion/test- this time one which was not relevant to the determination of which bid was the `most economically advantageous tender’, and that the basis on which the Savings Element could be calculated and applied was not set out in the ITT in a sufficiently clear and consistent way.

Mr Randolph QC puts the argument very simply. The reason why the criterion adopted by Newham was not relevant to the determination of which bid was most economically advantageous is because if the Savings Element, as set out in the ITT and the Evaluation Model is considered in the abstract, and without reference to the Pricing Element, it is possible for a tenderer with a lower `net price’ (that is, the price figure minus the savings figure) to get less marks than a tenderer with a higher `net price’. Matrix contends that Newham was either wrong to apply this criterion at all or it should have explained in greater detail in the ITT and the Evaluation Model the rationale for this criterion and the basis on which it would operate in practice so that Matrix could submit its bid accordingly. It was only when it was able to consider the actual pricing and savings figures provided by Matrix and Beeline on 20 October 2010 (as revealed in the Tender Evaluation Document provided on 8 October 2010) that the distortion created by the Savings Element became clear. Neither the ITT nor the Evaluation Model explained that a tenderer with a higher `net price’ could get more points for the Pricing and Savings Elements combined than a tenderer with a lower `net price’.

Matrix’s understanding of the Savings Element and how it viewed the position when it received the Tender documentation is set out in Mr Young’s evidence at Paragraph 6. He says that he recognised at the time that Matrix submitted its bid that Newham was planning to award points separately for the Pricing and Savings Elements. However, what he says he did not, and indeed could not, appreciate at that time was the perverse way in which such a division between the Pricing Element and the Savings Element would operate in practice. “Awarding points for the Savings Element independently of the Pricing Elements results in points being awarded that have no connection with the ultimate “net price” for which the tenderer could award the contract”. On Newham’s approach, a tenderer could get the most points (out of 30) for the Pricing and Savings Elements despite the “net price” (that is the price minus the anticipated savings) being greater than competing tenders”.

Assuming for the purposes of the present application that Matrix is correct that Newham adopted a methodology that did not enable it to evaluate bids and to identify the successful bidder on the basis of the “economically most advantageous tender”, the same issues arise in relation to the claims under Ground 2 as did in relation to the claims under Ground 1.

As Mr Giffin QC correctly submits, the basis on which Newham intended to evaluate the Savings Element was clearly set out in Section 13.1 of the ITT and Section 4.2 of the Evaluation Model. It was also incorporated into the Table. Mr Young concedes that Matrix understood at the time of preparing its tender that the price and savings elements would be separately evaluated. (Mr Young’s evidence Paragraph 3.19). Mr Young’s objection is that it proceeded on the basis that the cheapest bid price would receive the highest score irrespective of the additional savings element. However, this can not be reconciled with the clear wording of Section 13.1 of the ITT and Section 4.2 of the Evaluation Model. In particular it requires overlooking entirely the clear statement in the documentation that 5% of the marks would be available for the Savings Element, and, as with the Pricing Element, the way in which the evaluation of the Savings Element would factor into the overall evaluation was clearly set out in the Table. For example, one sees immediately from the Table, that Company 3 has the highest savings of 600,000 and is awarded 5 points; Company 1 has the lowest savings and obtains 0.025 points, ie 3,000 divided by 600,000 x 5. Accordingly, Company 1’s total score is the 18.66 it has obtained for the Pricing Element plus the 0.025 points for the Savings Element.

Mr Young does not explain in his evidence how he thought the specific 5% of marks would be awarded or would factor into the overall evaluation if the highest score for price would be given to the cheapest bid price. Moreover, as Mr Giffin QC points out, there is no reason at all why the cheapest priced bid would necessarily offer the largest amount of savings. The fact that in the Table the hypothetically cheapest bidder on price also offered the greatest savings is irrelevant. The way in which saving would link into both the evaluation and the contractual arrangements in the Tender was clearly set out in the ITT- in particular in Sections 12 and 13 thereof. Accordingly, the points that Matrix now makes in relation to these calculations were available to it in March 2010 when it received the Tender documentation and whilst Matrix might well disagree with the approach that Newham intended to adopt, it was nonetheless an approach which was clearly stated at the outset.

Accordingly, as with the claims under Ground 1, in my judgment Matrix had constructive knowledge of the relevant facts which clearly indicated the infringement it now alleges when it had access to the ITT and the Evaluation Model on 18 March 2010 and any claim should have been brought by 18 June 2010. Ground 2 claims are therefore now time barred.

Matrix’s fall back position is that the Court should extend time pursuant to Regulation 47(7)(b) of the Regulations if it is of the view that the claims under Grounds 1 and 2 are time barred. I do not agree. In my judgment, and applying the relevant test in the context of a summary judgment/strike out application, Matrix does not have a real prospect of successfully establishing at trial that it is entitled to an extension of time in relation to either the Ground 1 or Ground 2 claims. In my judgment, there is no good reason why an extension should be granted in relation to either category of claims.

As Mann J observed in Sita (ibid), extensions of time are not to be lightly given bearing in mind the purpose of the time limits in the first place. As Mr Giffin QC correctly put the argument for Newham on this issue, Matrix was and is an experienced and substantial undertaking in this field. Mr Young was and is experienced in procurement tendering. The alleged infringements of which Matrix complains were, as I have found, apparent on the face of the ITT and Evaluation Model. It is not suggested that Matrix was unaware of the relevant time limits. It is not merely out of time, but substantially out of time. The fact that Newham has applied the same (allegedly erroneous) approach to price and savings in a number of previous procurement exercises does not assist its argument. It had the opportunity and time (3 months) to test its understanding of the approach, to ask questions of Newham, and to seek legal advice if necessary. It did none of these. If there was manifest inconsistency between the test set out in Section 13.1 and Sections 4.1 and 4.2 of the Evaluation Model and the test applied by Newham as set out in the Table, it was manifest on day one. What Mr Young’s evidence (set out above) suggests, unfortunately, is that Matrix simply did not take sufficient care in reading the whole of the ITT and Evaluation Model, and I am in no way persuaded that Matrix was misled about the process which Newham intended to follow (cf the position in Amaryllis Ltd v H M Treasury sued as OGC Buying Solutions [2009] EWHC 962 (TCC) at Paragraph 78).

Further, the Court has consistently taken a strict approach to the exercise of discretion to extend time for bringing challenges under the Regulations. I was referred by Mr Giffin QC to a number of authorities, including Jobsin (ibid) per Dyson LJ at p1273 (Paragraph 33); and Matra Commuications SA v Home Office [1999] 1 WLR 1646 at 1657B and 1663D, and the Court of Appeal in Sita approved the approach adopted by Mann J, without revisiting the issue of discretion in any detail itself. As a result of the ECJ ruling in Uniplex a tenderer has a full 3 months from the date when it knew or ought to have known of the breach and this ought to be more than sufficient in the present case.

Further, even if I was persuaded (which I am not) that Matrix has a strong claim under either Ground 1 or Ground 2 , the strength of the claim does not provide a positive reason to extend time. Likewise, the absence of prejudice as a separate factor is of little weight. Mr Giffin QC contends that there is obvious and inherent prejudice to Newham if these claims are allowed to proceed. However, even if I were to accept Mr Randolph QC’s submissions that there is no or very little prejudice to Newham; that Matrix has made every effort to resolve the present proceedings in an expeditious fashion; that any prejudice alleged by Newham can only apply to Matrix’s claim to set aside the decision to award the Contract to Beeline not its damages claim, and that Matrix’s other claim for illegitimate preference is within time and will proceed (unless I strike it out), Matrix does not, in my judgment, get home. The short time period for the commencement of proceedings is imposed by the Regulations for a reason. Public procurement authorities are entitled and need to know as soon as possible whether a procurement is being challenged. As Mann J points out in Sita (at Paragraph 179), time bars are mechanical and absolute and are not based on ad hoc prejudice considerations. The fact that no additional prejudice is sustained a week, two weeks or a month after the lapse of the period is not, of itself, a good ground for extending the period.

Moreover, I do not accept Mr Randolph QC’s submission that there would be some general public importance in granting an extension of time to Matrix in order that the issues it raises be determined. The proceedings concern a private challenge to a procurement, made in Matrix’s own interests. It is miles away from the situation that arose in Law Society of England and Wales v Legal Services Commission (ibid), where the potential consequence of the alleged unfair and arbitrary process of the competition which was under challenge was that those most in need of publicly funded family services would be deprived of access to those most qualified to meet those needs.

Finally, I reject the suggestion that Newham has been tardy in bringing forward its application and/or that Newham’s agreement to take no limitation point for a short period from 27 October 2010, whilst a possible resolution was explored should lend weight to Matrix’s application for an extension. Accordingly and taking into account all the factors raised by Mr Randolph QC in support of an extension, and the fact that there is no likelihood that the position will be any more favourable for Matrix at trial, in my judgment, there is no good or arguable reason why I should grant an extension of time and it follows that Newham’s application to strike out the claim under Grounds 1 and 2 succeeds.

Matrix’s claim under Ground 3, as pleaded at Paragraph 69 of its Particulars of Claim, and explained in Mr Randolph QC’s skeleton argument is that either in the assessment of the Quality Element of the procurement by Newham’s procurement team or during the consideration and endorsement of the result of the procurement process by the Mayor of Newham, an illegitimate preference was given to Beeline by Newham, either consciously or subconsciously, and that Newham therefore failed to assess each tenderer’s submission objectively and equally.

In support of this pleaded claim, Matrix relies upon the report to the Mayor dated 8 September 2010 by Mr Rashid Patel, the Assistant Head of Human Resources at Newham, made prior to the decision to award the Contract to Beeline and following consideration of the scores awarded to various tenders (“the Report”), which at Paragraph 2.12 states as follows:

“2.12

The recommendation to award the contract to the existing provider was based on the evaluation of bids as set out in the tender documents. However, there are a number of additional benefits which can be gained by awarding to this contractor:

……..”

and then sets out five perceived “additional benefits” of awarding the Contract to Beeline, including, for example that Beeline “fully understand the needs of Newham and the various services and they have demonstrated a real partnership approach to delivering high quality resources and responding to changing demands” and “their estimate on savings is based on a 2^nd generation Managed Service Provider contract and their understanding of the Council”;

These examples, contends Mr Randolph QC, clearly only arise for the incumbent provider- Beeline, and appear to have been derived from a “Briefing Note” dated 16 August 2010 prepared by Ms Beverley Williams, the Acting Divisional Director of HR for Newham, who was then the Lead Officer for the procurement (“the Briefing Note”). In the Briefing Note, Ms Williams states that “there are additional benefits to awarding to the existing supplier” including that “they fully understand the needs of Newham”. Whilst the Briefing Note does not include the first sentence of Paragraph 2.12 above, which appears to have been added in by Mr Patel when preparing the Report, these “additional benefits’, contends Mr Randolph QC, were presented to the Mayor as free standing justifications for the decision to award the Contract to Beeline.

The short point made by Mr Randolph QC in his Skeleton Argument is that this reference to “additional benefits” made in the Report raises an issue as to whether any conscious or subconscious preference was given to Beeline. It is an issue that should be determined at trial, and the Report and the Briefing Note are sufficient for the Court to conclude that Matrix’s case is not bound to fail. It is contended that these references to “additional benefits” can not be explained away in the way Mr Patel seeks to do in his witness statement, namely that the reference was intended simply to highlight to the Mayor some of the background to the proposed contract award and some of the points that had emerged in evaluating the bid (Paragraph 39 of Mr Patel’s statement). If this information was relevant to the Mayor, it would, Mr Randolph QC contends, have been considered relevant by those officers at Newham responsible for assessing the Quality Element scores of competing bids. Further, the evidence of Newham’s Mayor, Sir Robin Wales, to the effect that the “additional benefits” were not taken into account when making the decision to award the Contract to Beeline, does not mean that they were not taken into account when Newham was scoring the Quality Element, consciously or subconsciously. Accordingly, Mr Randolph QC contends that Matrix is entitled to put these allegations to the relevant witnesses in cross examination after full disclosure has taken place and the claim under Ground 3 is plainly unsuitable for summary determination.

During the hearing before me, as Mr Randolph QC developed his submissions, he sought to rely on other documentary evidence in addition to the Report and the Briefing Note to make good this claim. In particular, Mr Randolph QC drew my attention to the Schedules to the Tender documentation-in particular the Spreadsheet which all tenderers were required to complete and which contained relevant questions and criteria by which Newham stated it would evaluate the bids. By reference to these additional documents, Mr Randolph QC sought to emphasise that:

In my judgment, and notwithstanding these additional submissions made by Mr Randolph QC, Matrix’s claim under Ground 3 has no reasonable prospect of success at trial.

Dealing first with Matrix’s argument that Newham was wrong to take Beeline’s current experience as the incumbent supplier into account, in my judgement, there is no substance whatsoever to this claim. What Newham was required to do was to apply the criteria and approach set out in the ITT and Evaluation Model in good faith and without manifest error. It was clearly stated in the ITT and put beyond doubt by the questions Newham required the bidders to answer, that what Newham was interested in, was knowing whether and how well a particular bidder would deliver the services it said it would and that in this regard, it expressly sought examples of bidders’ current activities (see Q1 NCCS-Method Statement Question). Section 14 of the ITT made clear that Newham would use these Method Statements to judge the quality of each tender submitted and to make comparisons between them. Newham did not deliberately set out to favour the present incumbent. To the extent that Newham sought examples of current experience in any of the Method Statement Questions, it was open to an incoming tenderer as much as to the incumbent tenderer to provide such examples.

Moreover, it is plain from the Tender Documentation that this sort of information was being sought from all bidders, including by definition, the incumbent supplier, Beeline. The suggestion made by Mr Randolph QC that Matrix did not know and could not have known that Beeline’s current experience would be taken into account is simply not tenable. It was self evident that this was to occur. For example,

In short, I agree with Mr Giffin QC that when one reads these documents it is not remotely tenable to suggest that bidders were not given to understand that the existing experience of bidders would not be part of the evidential base against which the quality element of the bid would be assessed. Further, even if Mr Randolph QC’s submission is limited to Beeline’s current experience, this is equally untenable. All tenderers were told that every tenderers’ experience would be taken into account and Matrix would have known and should have known that Beeline’s current experience would be taken into account. Further, if Matrix were correct that this published approach of taking into account tenderers’ current experience or just Beeline’s current experience is unlawful, then the alleged breach arose in March 2010 and suffers the same limitation issues as the claims under Grounds 1 and 2.

As regards Matrix’ pleaded argument in relation to the Report and Briefing Note, the short point made by Mr Giffin QC for Newham is that the statement at Paragraph 2.12 of the Report, and the statement in the final paragraph on page 2 of the Briefing Note (commencing “There are additional benefits to awarding to the existing supplier….) read in their proper context, comprise no more than comments on the benefits that would flow from the decision to appoint Beeline as the successful tenderer. I agree.

It is clear from the evidence that the tender evaluation was carried out by a panel of officers at Newham, in what was clearly a highly structured way. One can see from the ITT documentation exactly how the evaluation worked, the detailed questions asked and the criteria applied. Once the evaluation process was concluded and the panel of officers determined that Beeline had scored the highest score, the Briefing Note was prepared which clearly showed Beeline to be the winner and the rationale for recommending awarding the Contract to Beeline. At the end of the Briefing Note, there was listed a number of additional benefits which would flow in the event that the Contract was awarded to Beeline. The Mayor was then given a report stating that Beeline had won the evaluation. The Mayor had to decide whether to go ahead and approve the contract to Beeline or not to proceed at all. The Mayor was not responsible for the evaluation itself, but only for deciding whether to award the contract at all. However, in making this decision, the Mayor was clearly entitled to look at the whole process. The reference to “additional benefits” in the Report is there to support a decision to award the contract- an additional reason for following the result of the evaluation- nothing more. The Mayor’s evidence is that the existence of these additional benefits had no influence on his decision. Beeline scored highest in the evaluation and the matter was put to the Mayor on that basis.

As Lord Justice Pill remarked in Lancashire County Council v Enviromental Waste Controls Limited [2011] LGR 350 (paragraph 32), in the context of a carefully devised and operated assessment procedure, with scores under many headings, it is extremely difficult to conclude that the process was defective by reason of regard for an irrelevant consideration, and in my view, Mr Giffin QC’s analysis of the evidence is correct. To suggest that the officers who did the evaluation of quality within the context of this highly structured tender, took into account matters which they should not have done and gave additional marks to Beeline because of the “additional benefits” mentioned in the Briefing Note is not tenable. It is not said by Matrix, with regard to the acts of the panel officers, that they would have done this consciously. What is in effect alleged with regard to the panel officers, is that although they thought they were marking Beeline’s and Matrix’s bids against the very detailed Schedules, in fact, unconsciously they were influenced to grant the marks they did by these other additional factors. In my judgment, there is nothing in the Report to the Mayor or the Briefing Note which suggests that this is what happened. Indeed, to the contrary, Paragraph 2.12 of the Report and page 2 of the Briefing Note evidence a conscious appreciation of the difference between the matters taken into account in the evaluation and the maters which were not part of the evaluation but which would arise as a result of going with the evaluation decision. Neither are evidence of a mental muddle of the parties to the documents taking into account matters which they are not permitted to take into account. Neither support a case that there was a conscious or unconscious bias.