Mears Ltd v Leeds City Council (No 2)

This judgment deals with certain issues of liability in proceedings concerning a public procurement by Leeds City Council (“LCC”) known as the Leeds Housing Arms Length Management Organisation (“ALMO”) Procurement 2011 (“the Procurement”). The Procurement was carried out under a competitive dialogue procedure pursuant to Regulation 18 of the Public Contracts Regulations 2006 (“the Regulations”). The Claimant (“Mears”) was one of the tendering contractors in respect of Lots 1 and 4 of that procurement which consisted of capital improvement and refurbishment works for social housing in the Leeds area. Mears was informed on 2 July 2010 that it had been unsuccessful in its tender. In these proceedings it seeks to challenge the decision of LCC on the basis that there were breaches of Regulation 4(3) and 30(3) to (5) of the Regulations.

Following a hearing on 10 December 2010 I ordered that LCC should give disclosure of model answers (“the Model Answers”) which had been prepared by LCC for the purpose of evaluating tenders for the Procurement. Because the Procurement was still continuing and in case I held that it should be re-run, I ordered that the disclosure should be given within a confidentiality ring. I also decided that certain claims pleaded in paragraphs 20(1) and (2) of the Statement of Claim should be struck out as they had been commenced outside the period permitted in Regulation 47(7)(b). A timetable was set for Mears to consider the disclosed Model Answers within the confidentiality ring, for exchange of draft amended pleadings, as necessary and for the formulation of issues. This judgment deals with those issues.

It is convenient to repeat some of the more important background which I have already set out in detail in my previous judgment in Mears Limited v Leeds City Council (No 1) [2011] EWHC 40 (QB).

The Procurement was commenced on 21 October 2009 when LCC, through Aire Valley and West North West, published an OJEU Contract Notice which invited potential bidders to express their interest in participating in the Procurement. The Procurement involved two elements but only the first element, capital improvement and refurbishment and responsive repairs and maintenance work to the housing is relevant to these proceedings.

Mears pre-qualified and was one of nine tenderers who received the invitation to participate in competitive dialogue (“ITPD”), the next stage of the Procurement. The ITPD invited tenderers to submit “Outline Solutions Submissions (Quality and Cost)” in respect of the proposed works.

Section 8 of the ITPD set out the evaluation criteria to be used in the process of selecting a maximum of three tenderers to be invited to the next stage, the invitation to continue dialogue (“ITCD”). There was then to be the last selection stage, the invitation to submit final tenders (“ISFT”).

The evaluation of the ITPD stage was to be carried out on the basis of a scoring system in which 40% was for price for each lot and 60% for quality, the three highest scoring bidders being selected for the ITCD stage. The current proceedings are concerned with the quality aspects of the tender. The evaluation of quality was based on an evaluation of answers to questions which was set out in the following table at paragraph 8.2.1 of the ITPD (“the Evaluation Table”) as follows:

It can be seen that 100 marks were available distributed between eight criteria in varying, identified, weighted amounts. Under each of the criteria certain questions in Section 5 of the ITPD were identified which had to be answered by the tenderers. The questions under each criterion were not weighted as against one another.

On 4 May 2010 Mears submitted its Outline Solutions Submissions andon 2 July 2010 LCC informed Mears by e-mail that following the qualitative and quantitative evaluation of Mears’s Outline Solution Submissions in relation to Lots 1 and 4, capital improvements and refurbishment work, they had been unsuccessful in being short listed to progress to the ITCD stage. They were told that the results of the tendering exercise would be posted on the LCC web-based bulletin board once the successful contractor had commenced work.

On the same day, 2 July 2010, Mears sent LCC an email in which they sought feedback in respect of LCC’s decision.

Following that request for feedback, LCC sent Mears a spreadsheet attached to an email of 15 July 2010 with the title “Bidder Outline Submission Feedback”. It set out the overall scores achieved by Mears and went through various sections of Mears’ Outline Solutions Submissions setting out “OSS strengths”, “OSS weaknesses” and “missing/additional information to be provided”. In a number of the comments under those headings there was reference to the Model Answers. For instance it said “medium scores to responses against model answers overall” or “some model answers missing” or “answers do not hit model answer”.

When Mears responded to that feedback on 27 July 2010, with assistance from Trowers & Hamlins LLP, they made reference to the Model Answers. In particular at paragraph 2.3.4 they said:

“References at B1, B2, B4, D and E have been made to the comparison exercise of our bid against “Model Answers”. This does not assist us in understanding where we have lost marks since we do not have copies of the model answers. Please explain what was required and how marks were allocated accordingly.”

On 6 August 2010 LCC responded to Mears’ letter of 27 July 2010 but did not respond in relation to the question about the Model Answers. On 12 August 2010 Trowers & Hamlins LLP wrote again to LCC. They noted that LCC had not addressed matters specifically raised in the letter of 27 July 2010 and asked LCC to do so without delay. In addition, in relation to the quality criteria used, they asked LCC to provide:

“1.

The sub-criteria (and related scoring) used within each section of the Quality Submission;

2.

The evaluation matrix used; and

3.

The scoring sheets relating to our client’s bid.”

LCC responded in more detail in their letter of 1 September 2010 and said this:

“In terms of your request for sub-criteria and related scoring all the questions identified in the Quality Submissions part of the ITPD were assessed and evaluated by officers from West North West Homes, Aire Valley Homes and the Council and each question received a score out of 10, based on the guidance enclosed at Appendix 2.

Mears submission was evaluated by a number of officers and details of the scores received using the guidance at Appendix 2 for each of the questions are provided at Appendix 3.”

Appendix 2 was a table (“the Scoring Table”) which contained scores of 0 to 10 and a column which contained guidance for each score. For instance for the score of 0 the guidance was “question is unanswered”; for the score of 4 the guidance was“addresses the criteria, but basic evidence only provided”; for the score of 8 it stated “addresses the criterion and provides comprehensive evidence that indicated some innovation and the potential to deliver a high quality result”; for the score of 9 the guidance was “addresses the criteria and provides comprehensive evidence that indicated innovation and the potential to deliver a high quality result” and for a score of 10 the guidance was “comprehensive and value adding response that is innovative, includes full evidence of techniques and measurements employed, capable of exceeding expectations.”

In a letter dated 16 September 2010 Trowers & Hamlins LLP contended that the Scoring Table contained undisclosed weightings which should have been disclosed to tenderers under Regulation 30 of the Regulations. On 12 October 2010 Mears issued these proceedings seeking an interim order suspending the Procurement and an order that LCC re-run the Procurement either entirely or from the ITPD stage.

On 2 November 2010 Mears served Particulars of Claim in which they alleged LCC was in breach of the Regulations and by an application dated 4 November 2010 sought an order that the Procurement should be suspended and the decision not to short-list Mears for the ITCD stage should be set aside. On an application madeby LCC I ordered the service of evidence including disclosure by LCC and adjourned Mears’ application for an interim order until 10 December 2010.

When, as part of the service of evidence Mr Rigby put in his Witness Statement dated 24 November 2010, on behalf of LCC, he dealt with the question of the scoring guidance which he had prepared in conjunction with the consultants. At Exhibit PRR9 he exhibited pages 2 to 8 inclusive of the written guidance document. At page 3 of that document at Section 3 “Scoring Requirements” there were “instructions to scorers” which stated:

“Based on the details submitted in response to each question, Panel Members are to score each of the questions in the sub sections using the following scoring guidance.

Submissions including better overall proposals, better illustrated by an example will score higher.

Marking Guidelines - Single score (out of 10 in line with the table below) to be awarded against each question, evaluation panel members should refer to the guidance within the model answers.”

Below that statement, was the Scoring Table.

Mr Rigby explained that pages 9 onwards of the document set out in relation to each question, as a guide, a Model Answer. In addition as part of exhibit PRR9 Mr Rigby enclosed a PowerPoint presentation given to scorers. In relation to the Quality Evaluation process one of the bullet points in the presentation stated:

“Each question to be scored between 0 and 10 in line [with] score definition guidance documented at 3.1 when compared against model answer.”

Whilst LCC later provided a copy of pages 9 onwards of the guidance document it was in a heavily redacted form in which the relevant questions were identified but the Model Answers were redacted. This led to Mears seeking disclosure of the Model Answers.

At the hearing on 10 December 2010 which had been fixed to hear Mears’ application for an interim order, it became clear that it was appropriate for me to deal with the application by Mears for disclosure of the Model Answers prepared by LCC and also an issue of time-bar under Regulation 47(7)(b) raised by LCC in respect of certain allegations by Mears in the Particulars of Claim.

As set out in my previous judgment, I ordered that the Model Answers should be disclosed within a confidentiality ring of two solicitors from Trowers and Hamlins LLP, Counsel for Mears and Mr Lester as a representative nominated by Mears. I also struck out certain allegations made by Mears.

It became clear that I should deal with certain preliminary issues which it was intended should have the effect of permitting the court to decide whether LCC could or could not enter into the contract with the tenderer who has been chosen as a result of the Procurement. I fixed a hearing for 19 and 20 January 2011 for that purpose and LCC undertook not to enter contracts for capital improvements, refurbishment, responsive repairs and maintenance services in respect of Lots 1 and 4 until after the conclusion of the hearing.

Following disclosure of the Model Answers, Mears filed and served an Amended Particulars of Claim on 5 January 2011 in which they claimed that LCC was in breach of duty under the 2006 Regulations in failing to disclose the Model Answers to Mears prior to the submission of its Outline Solutions Submission.

On 7 January 2011, LCC filed and served an Amended Defence which denied that LCC was in breach of duty as alleged by Mears and/or that in any event any claim in respect of LCC’s use of the Model Answers could not be brought as there had not been service of prior notice contrary to Regulation 47(7)(a) and the claim was out of time contrary to Regulation 47(7)(b).

On 12 January 2011, the parties provided a list of issues of liability for the court to determine which, as developed subsequently, were essentially these issues:

The hearing proceeded on 19, 20 and 25 January 2011 at which Mr Parishil Patel appeared on behalf of Mears and Mr Andrew Arden QC and Mr Christopher Baker appeared on behalf of LCC. For certain parts of the hearing I sat in Private when dealing with the Model Answers. I provided the parties with my decision on 26 January 2011. I now set out in this judgment the reasons for that decision.

Mears submitted a witness statement dated 14 January 2011 for the purpose of the hearing from Mr Gary Lester who is the Regional Managing Director of Mears for the South and was the person Mears nominated to act for them within the confidentiality ring. He gave evidence relating to his views on a number of aspects including whether certain questions were capable of containing an element of innovation and whether the Model Answers properly responded to the questions. LCC did not require him to be called to give evidence and they submitted that much of his evidence was comment or submission.

In addition Mears relied on the witness statement of Mr Darren Pace dated 3 December 2010. Mr Pace has been the Business Development Director of Mears for 18 years and a considerable part of his work involved public procurement contracts. He responded to the evidence of Mr Statham, on behalf of LCC. Mr Statham dealt with the potential prejudice to LCC if they were unable to enter into the new arrangements pursuant to Procurement 2011 from 1 April 2011. Again, LCC did not require him to be called to give evidence and the substance of his evidence was put by Mr Patel to Mr Statham in cross-examination.

LCC relied on the evidence of four witnesses, all of whom were called and cross-examined. The first witness was Dean Backhouse, a solicitor employed as procurement governance and regulation manager by LCC. He provided a witness statement in which he explained a sentence in a letter he had written to Mears on 23 September 2010. He said he was involved in dealing with correspondence with Trowers & Hamlins LLP, the solicitors for Mears and his instructions came from Mr Rigby of LCC. He said he was not involved in the assessment or evaluation process although his name did, at one stage, appear in a document suggesting that he would be involved.

His first involvement in writing letters to Trowers & Hamlins was the letter 23 September 2010. It was sent in response to Mears’ letter of claim of 16 September 2010. In his response he dealt with Mears’ contention based on the reference in the Scoring Table to the fact that to achieve a score of 10 on a question, a tenderer had to provide a “Comprehensive and value-adding response that is innovative includes full evidence of techniques and measurements employed, capable of exceeding expectations.”

Trowers & Hamlins had said in the letter of claim, in relation to this reference in the Scoring Table, that “our client (and the other bidders) did not know from the ITPD that in order to score full marks, it had to provide a response which not only fully met the specifications of the contract but one which was “capable of exceeding” it.” In responding to that comment Mr Backhouse had stated that Mears would be fully aware that LCC expected “bidders to provide submissions which incorporate innovation, adds value and exceeds the expectations of customers. This is a competitive process and as such bidders must demonstrate to the evaluation panel not only their experience and ability to meet the requirements of the ITPD but to exceed them.”

In his witness statement Mr Backhouse said that the wording had been careless and he had not intended to say that marks had been set aside for going beyond the invitation document but had intended to say that contractors were expected to go beyond the basic requirements in the ITPD. He was asked by Mr Patel what he meant by the basic requirements of the ITPD. He said that in the context of a competitive dialogue procedure the tenderers were supposed to supply solutions which did not just meet the requirements of ITPD but which may give an answer which exceeded what was expected of them. He was asked how, with the stated requirements for innovation, addition of value and other matters included within the ITPD, a tenderer would be expected to go beyond those requirements. He said that would be in terms of bringing in things beyond those which are set out in the basic requirements.

Mr Backhouse was then asked a question about the Scoring Table and he accepted that to achieve a score of over 7 the response to the questions had to incorporate innovation. He said he considered that a tenderer could always innovate in relation to any of the questions.

The second witness called by LCC was Mr Ben Small, a project manager with Turner and Townsend Project Management who were engaged by LCC as consultants on Procurement 2011. He produced a witness statement in which, in summary, he provided an analysis of the scores which Mears would have obtained if they had achieved the maximum score of 10 for those questions where they now criticised the Model Answers for including criteria, sub-criteria or weightings which they say were not included within the ITPD.

The conclusion of his analysis was that, on the basis of a score of 10 for all the criticised questions, Mears’ scores would have been 61.76 for Lot 1 and 63.01 for Lot 4 whilst the third lowest tenderer scored 65 and 67 for Lots 1 and 4 respectively. On that basis he concluded that even if Mears were correct in their contention that they were deprived of the opportunity of dealing with non-disclosed criteria, sub-criteria or weightings, they would not, even on the basis of achieving full marks for those questions, have been placed within the first three tenderers to proceed to the ITCD stage.

As accepted by Mr Arden QC, the evidence did not go to show what the position would be in relation to any of Mears complaints in respect of the Scoring Table, it being limited to the question of undisclosed criteria, sub-criteria or weightings in the Model Answers. In relation to the scoring guidance, Mr Arden QC conceded the following: “For the purposes of this hearing, Leeds do not contend that Mears suffered no loss if it establishes a breach of the Regulations in respect of non-disclosure of the scoring guidance.”

Mr Patel asked Mr Small a series of questions which demonstrated that the scores had a number of rounding errors. First there was a rounding error because the scores for each question were the average of the scores from the individual scorers. Secondly, there was a rounding error when the scores for the group of questions were converted so as to be expressed as an overall score for those questions. Lastly there was a rounding error when the scores on a group of questions were converted to an overall score in accordance with the scoring and weighting set out in the table at paragraph 8.2.1 of the ITPD. Whilst that cross-examination indicated that Mears’ score might have gone up, the scores which were achieved were still below the 65 and 67 of the third bidder. There was no analysis of the rounding errors in the average of the scores from each individual scorer or of the impact of the rounding errors on the other three tenderers who were successful at the ITPD stage. As a result, all that I can conclude from that evidence is that Mears’ scores might have increased but still would not have been sufficient to make Mears one of the top three tenderers.

The next witness called was Phillip Rigby. He is the strategic project manager employed by LCC for the purpose of the Procurement. He had produced a first witness statement on 24 November 2010 in which he explained the background to Procurement 2011, the procedure adopted at ITPD stage and the history of matters since then. He produced a second witness statement in which he made a small correction. In his third witness statement, produced for the purpose of the January 2011 hearing, he dealt with the Scoring Requirements, including the Scoring Table and the Model Answers. In particular he dealt with the contention by Mears that there were undisclosed criteria, sub-criteria or weightings in those documents.

When he gave oral evidence he indicated that LCC had grant monies of £37 million available for major works for 2011 and 2012. He said he considered that if the Procurement were re-run it would take 9 months to reach the stage where a contract could be awarded, that is the end of October 2011. He said that for 23,000 of the 37,000 houses which were the subject of the proposed contracts under the Procurement, they were currently being dealt with under a contract for repairs and maintenance which could be extended. However for the balance of 14,000 houses which had been the subject of a contract with Connaught, who went into administration in September 2010, there was no possibility of extending the short-term contracts which had been entered into to deal with the emergency situation brought about by that administration. He said that the ability to spend money on major works in 2011-2012 would depend on LCC being able to enter into piecemeal arrangements for this work and he estimated that LCC would only be able to spend £15 million because of the complexity of these arrangements. He also indicated his concerns that the standards achieved would fall short of the “Decent Homes” standards so that the long-term objectives which had been pursued and achieved from 2004 to 2005 onwards would be lost.

In response to questions from Mr Patel he maintained that the 9 month period from the end of January 2011 to the end of October 2011 was an accurate forecast for the time to re-run the Procurement even allowing 2½ months for mobilisation which was the minimum possible period.

He was asked questions by Mr Patel about the evaluation of the quality submission. In relation to the Evaluation Table at paragraph 8.2.1 of the ITPD he accepted that a tenderer would know how a group of questions would be scored and weighted but not know how the individual questions would be dealt with. He accepted that it was known at the time the ITPD was issued that each of the questions would be marked out of ten and be given an equal weighting. He accepted that this was not covered in section 8.2.1 but he was sure it was clarified.

He was taken to the tender clarification provided on 14 April 2010 when one of the tenderers had asked the following question: “Please could you confirm if the questions within each section are weighted equally?” The response from LCC was “please refer to the table at 8.2.1 on page 131[of the ITPD]”. It was put to him that that was not a response to the question. He said that he provided the response and there were no further questions and therefore he took it that it had been understood by the tenderers. He said that they were not saying that any question had a stronger weighting and in any case they had a dialogue session with the tenderers and they did not say they did not understand this point.

Mr Rigby was asked about paragraph 9.7.1 of ITPD which allowed tenderers to make requests for information at certain times. He confirmed that, on 14 April 2010, the date for the responses had been extended to 5 May 2010 and therefore if tenderers had wished to seek further clarification they could have done so in the period up to 7 days before 5 May 2010 which, under paragraph 9.7.1 of the ITPD, was effectively a cut off date for any further requests for information by the tenderers.

In relation to the Model Answers he was asked whether those carrying out the evaluation had to score by reference to the Model Answers. He said the Model Answers were provided as a guide to the panel and contained expected content and a guide as to what LCC were looking for. He was then asked questions about the feedback provided to Mears and was taken to the schedule attached to an e-mail of 15 July 2010 from LCC to Mears. He was referred to the comment under “OSS Weaknesses” in relation to the quality submission under section B3 performance. It read as follows:

“Building

1

a combination of responses either/or both of not matching full response to model answer or lack of evidence which cost a number of points.

2

not listed staff and training undertaken as suggested in the model answer for Q3.5.”

It was put to him by Mr Patel that the comment suggested that those carrying out the evaluation were matching the tenderers’ responses to the Model Answers. He said that it could be read like that but the Model Answers had only been provided as a guide. It was put to him that if the responses by the tenderers did not have everything in the Model Answer then the tenderer would not score the maximum marks. He said that there might be other things which could bring about a good score. He agreed that to obtain a score of more than 7 it was necessary to show some innovation. He said that they were looking for solutions and the marking had been done in this way because they were looking at innovation “across the piece”.

He was referred to the Scoring Table and what was stated to be necessary to achieve a score of 10. He was asked by Mr Patel whether a score of 10 was reserved for exceeding requirements or expectations. He said that what they were looking for were solutions which exceeded the ITPD in areas such as customer expectations. He said that they stressed innovation. He was asked whether they should have told the bidders that 10 was reserved for that. He said in the dialogue it was explained and stressed that they were looking for comprehensive value added responses. He was asked whether in a session with Mears they were told that they would have to provide responses which exceeded expectations. He said it was not said in such words but they stressed the opportunity to provide innovative responses. He said they were looking for stronger better value proposals adopting the best way of working. He agreed that, in scoring up to 7, the scorers were not concerned with innovation and that innovation only came into the scores of 8, 9 and 10. He agreed that it was only when in the judgement of the scorer there was an element of innovation that the scorer was free to give a score above 7.

He accepted that the scoring guidance was provided to the scorers to achieve consistency in the panel of scorers because different people were scoring different questions and sections. It was put to him that this was also the reason for scoring based on the Model Answers. He said the Model Answers were not a prescriptive, exhaustive list and that if the tenderer had provided more than in the Model Answer then the scorers were free to add marks. He accepted that LCC had not disclosed the scoring guidance to tenderers and said that it was not normal practice to do so. It was put to him that there were some questions where the tenders could not give a response which showed innovation. He said of the 105 questions he could not point to one but that might be the case.

Mr Rigby then gave evidence in private in relation to the Model Answers which had been disclosed to Mears under the confidentiality ring. He said that the Model Answers were prepared by the people who had drafted the questions and they were the experts in the field. He was not an expert and was not technically qualified. He accepted that some questions asked for innovative answers, such as Q2.4 and Q2.8. He was referred to the Model Answer for Q5.6 which asked for innovation and he said that the questions and Model Answers had been drafted by at least one of the people who were scoring the answers and they were experts either from LCC or from one of the two ALMOs (Aire Valley or West North West) and they also drafted the ITPD. He agreed that where LCC was seeking information they should ask for it and, in principle, it should be clear from, the question what information was required.

He was then taken to a number of the Model Answers and gave evidence both in cross-examination and re-examination which I have dealt with below when considering each of the Model Answers relied on by Mears.

Mr Rigby was asked in re-examination about the Scoring Table and the reference to innovation. He said that in his experience innovation was not precisely defined and he did not think that all people would come to the same conclusion as to whether or not an answer was innovative. He confirmed what he had said in paragraph 7 of his third witness statement that “The scoring guidance was not to be and was not applied so as to require that each answer had at least to indicate innovation in order to achieve a score above 7”. He said that, as stated in paragraph 6 and 7 of his third witness statement, the evaluation panel had been given guidance which was no more than a guide to assist in the evaluation of tenderers’ answers to the questions asked. He confirmed that, as he had set out in his witness statement, the scoring guidance was a guide which left it to the judgment of each of the panel members to decide what score to give when approaching each answer as a whole in the context of the particular question.

The last witness called by LCC was John Statham who is Head of Strategic Landlord at LCC. He had produced witness statements dated 24 November and 8 December 2010. He said that LCC had received a government major repair allowance of £37million for 2010 to 2011 but confirmed that any unspent money could be carried forward. He said that this was for the whole of Leeds Housing and that the money would be split roughly a third to each of the ALMOs so that Aire Valley and West North West would, between them, receive two-thirds of that grant. He also said there was some £15 million of reserves from LCC which would be spent overall on housing and again he confirmed that any unspent money could be carried forward. There was therefore about £34 million to be spent in 2010-2011 on the housing stock of Aire Valley and West North West.

Mr Statham said that while Mr Rigby suggested that, in the absence of the award of contracts under the Procurement, LCC might be able to spend £15 million in 2011-2012, he thought that, after discussion with colleagues, the figure was more likely to be £12 million if it had to be dealt with on a scheme by scheme basis. His colleagues’ view was that this was a more expensive way of procuring work. He said there was some uncertainty because the housing revenue account subsidy was ceasing from April 2012 and, although the previous government had indicated this would have made little difference, it had now to be seen how this would work out with the present government given the expected reduction in local government spending. He said that under the Procurement it was intended to make savings of £4.4 million in the first year and there were other elements of greater efficiency and changes to management arrangements which had been approved and agreed between the ALMOs and LCC.

So far as arrangements for dealing with the housing were concerned he confirmed that there were 14,000 houses which had no extendable contracts for maintenance and repairs. If similar interim arrangements to those presently in place were to be extended in 2011 and 2012 there would be an element of risk in LCC entering into those contracts if they did not go through a public procurement process. He said that the quality of stock had improved because they had delivered the “Decent Homes” standard but that, if there were delays in the Procurement, he was concerned that the standard of housing would slip back and that LCC would then face similar claims of several million pounds per year from tenants as they had done in the period before the “Decent Homes” initiative.

In answer to questions from Mr Patel he said he considered that, if LCC were to know by the end of January 2011 that they had to re-run the Procurement, the earliest they would be able to award a contract would be the end of October 2011. He confirmed that in relation to responsive repairs the contract with the party currently carrying out the work for 23,000 houses could be extended. He said that there had been 14,000 homes under arrangements with Connaught and they had procured alternative arrangements from September 2010 until 1 April 2011. It was put to him that there was no reason why further short-term contracts should not be entered in to from 1 of April 2011 to the end of October 2011. He said they had carried out the short-term contracts as a necessity but there was an increased risk that the continued use of such arrangements would be challenged on the basis they had not been through a public procurement process. He said it could be done but the question was whether it was the right thing to do.

In relation to capital improvement works he said that for the 37,000 homes under the two ALMOs, Aire Valley and West North West, the capital improvement works were being carried out under framework arrangements entered into in about 2004 and then revised. His understanding was that these could not be extended so that the only way for capital improvements to be carried out for the 37,000 homes would be to enter into short terms arrangements. He was referred to the process which had been carried out by Norwich City Council where a £23 million contract had been let for a period of nine months. It was put to him that a similar position could occur for LCC. He said they could but they would be concerned as to the risk of not complying with public procurement legislation. It was put to him that in the current economic climate there would be strong competition for short-term contracts. He said that in the current climate the focus was not on short-term contracts but on the long-term relationships with the reduction in costs and an increase in other benefits to LCC. He accepted that there would be competitive pricing for short-term contracts but could not say whether they would be cheaper than long-term contracts or whether they would offer as good value as contracts under the Procurement.

He was asked about the predicted efficiency savings in the first year of £4.4 million and confirmed that this figure was the difference between the amount LCC had budgeted and what the lowest tenderer under the Procurement had stated would be the cost. He confirmed that in addition under each contract there would be 4% year on year efficiencies. He said that it would not be good planning not to do much in the period April to end of October 2011, so far as the condition of the housing stock was concerned but it could be done. He said the added value benefits would be gained throughout years 1 to 5 and, if extended, years 5 to 10 of the contracts entered into under the Procurement. He said that some of those benefits were very important such as jobs and skills apprenticeships and these and similar issues were important at an early stage as part of LCC’s strategic aims.

I now turn to consider the four Issues which I have identified above.

In the first judgment I dealt with the question of whether a claim brought by Mears was out of time under Regulation 47(7)(b) and I set out at [70] the principles which I derived from previous decisions and which I then applied.

LCC originally contended that the amendments which Mears seeks to make to the Particulars of Claim to bring in the claims arising out of the Model Answers should be dismissed or disallowed because Mears did not give the prior notice required by Regulation 47(7)(a) or they were raised out of time under Regulation 47(7)(b).

In my previous judgment at [28] onwards I dealt with the application by Mears for disclosure of the Model Answers. At [52] I said this about time limits applying to the claims based on the Model Answers:

“So far as timing is concerned, an application for disclosure in these proceedings is not affected by any fixed time limit. Whilst late applications may not be granted I do not consider that any such issues arise in this case. In any event, subject to any argument at the trial of the preliminary issues, even if the provisions of Regulation 47(7) did apply to this application then, as dealt with in more detail below, time does not start to run until the date when the claimant knew, or ought to have known, of the infringement of the Regulations. I consider that in this case if there had been an infringement of Regulation 47 in terms either of a failure to provide the model answers as part of the information about contract award procedures or a failure in asserting, as LCC did at the hearing on 10 December, that the model answers might be withheld under Regulation 47(13), Mears would have to know of that infringement. Whilst reference was made to the model answers in the spreadsheet sent on 15 July 2010, I do not at present consider that this would have been sufficient for Mears to know or be in a position where they ought to have known of the infringement. Indeed without knowledge of what the model answers contain, it is difficult to contend that there has been any failure.”

I therefore expressly permitted further argument on this question on this trial of preliminary issues.

Mr Arden QC submitted, as summarised in a note on Regulation 47 developed in oral argument, that there is a distinction between Mears’ complaint based on the Model Answers brought under Regulation 4 and the complaint brought under Regulation 30. He accepted that if the complaint of failure to disclose all the criteria and weightings is upheld under Regulation 30(3) then Mears did not know about the complaint until it saw the Model Answers nor are to be treated as if it ought to have known. On that basis, it is accepted that the claim will have been made in time and that prior notice will have been given by the letter of 12 January 2011 in which Mears gave notice of the amendments.

In relation to the claim for failure to act in a transparent way under Regulation 4(3), Mr Arden QC submitted that Mears had all the relevant information on or shortly after 15 July 2010 when they were informed that the Model Answers had been used in the assessment and he relies on the fact that in its letter of 27 July 2010 Mears stated that the references to the Model Answers did “not assist us in understanding where we have lost marks since we do not have copies of the Model Answers. Please explain what is required....”. Mr Arden QC said that the complaint was not referred to in the further correspondence or in the Claim Form issued and cannot be said to arise out of the same facts dealt with in that correspondence or in the Claim. Accordingly he submitted that whilst there was prior notice under Regulation 47(7)(a) on 12 January 2011, the alleged breach of Regulation 4 now particularised in the proposed amendments to paragraphs 20(3) and 20(4) of the Particulars of Claim are out of time, being made now, a long after the three month period from July 2010 provided for by Regulation 47(7)(b).

In particular, Mr Arden QC submitted that Mears is out of time under Regulation 47(7)(b) because the draft amendment was not served until 5 January 2011, some 5½ months after 27 July 2010 when Mears knew that the Model Answers had been used. He also said that there is “no good reason for extending the period within which proceedings may be brought” as provided for in Regulation 47(7)(b).

Mr Patel submitted that there is essentially no difference between the approach under Regulation 47, when applied to a claim under Regulation 4(3)(b) or under Regulation 30(3) in respect of the Model Answers. He said that the letter of 27 July 2010 cannot be read in the way Mr Arden QC submitted that it should be read and that Mears only had the relevant knowledge after 13 December 2010 when they received copies of the Model Answers.

There is evidently a difference in principle between a claim under Regulation 4(3)(b) and a claim under Regulation 30(3). Regulation 4(3)(b) provides:

“A contracting authority shall (in accordance with Article 2 of the Public Sector Directive)-

(a)

treat economic operators equally and in a non-discriminatory way, and

(b)

act in a transparent way.”

Regulation 30(3) provides:

“Where a contracting authority intends to award a public contract on the basis of the offer which is the most economically advantageous it shall state the weighting which it gives to each of the criteria chosen in the contract notice or in the contract documents or, in the case of a competitive dialogue procedure, in the descriptive document.”

For an allegation of lack of transparency under Regulation 4(3) there has to be a failure to disclose some matter which ought to have been disclosed. I accept that the test in this respect is that set out in the Evropaïki case at [130] where the European Court said:

“The aim of those provisions is, accordingly to allow all reasonably well-informed and normally diligent tenderers to interpret the award criteria in the same way (see, to that effect and by analogy, case C-19/00 SIAC Construction [2001] ECR I-7725, paragraph 42) and, consequently, to have equal opportunity in formulating the terms of their tenders (see, to that effect and by analogy, Universale -Bau and Others, paragraph 129 above, paragraph 93).”

Applied to the facts of this case it must be seen whether the matters contained in the Model Answers would have been reasonably foreseeable to a reasonably informed and normally diligent tenderer. If they were then there was no obligation on LCC to disclose them under Regulation 4(3)(b) but if they were not then there LCC were obliged to disclose them.

In relation to a claim based on the Model Answers in respect of Regulation 30(3) it would have to be shown that the Model Answers contained criteria, sub-criteria or weightings upon which LCC would assess which tender was the most economically advantageous.

However, it seems to me that, in relation to the claim based on the Model Answers in this case, the tests under Regulations 4(3)(b) and 30(3) raise similar, if not identical, considerations. The matters contained in the Model Answers should be disclosed as a matter of transparency under Regulation 4(3)(b) if they were not reasonably foreseeable to a reasonably informed and normally diligent tenderer. Under Regulation 30(3) the Model Answers should have been disclosed if they contained criteria which were not included within the criteria which the questions answered by the Model Answers were intended to address. In essence, the Model Answers would have to respond to the relevant questions in a manner which would be reasonably foreseeable by a reasonably informed and normally diligent tenderer and if they did not do so then they would add new criteria, sub-criteria or weightings.

The question is whether Mears had enough knowledge to bring proceedings under Regulation 4(3) on the basis of the information provided in July 2010. At that stage Mears knew that there were Model Answers which had been used in the process of evaluating the tenders. They were not aware of the contents of LCC’s Model Answers. In their letter of 27 July 2010 Mears referred at paragraph 2.3.4 to the references to the Model Answers and said these references did not assist Mears in understanding where it had lost marks since they did not have copies of the Model Answers and they asked for an explanation. No substantive response was given.

I have set out the principles to be applied at paragraph [70] of my previous judgment. In this case, for a claim under Regulation 4(3)(b) Mears had to know not just that there were Model Answers but what those Model Answers said. Only on that basis would it know whether or not the matters contained in the Model Answers were or were not reasonably foreseeable. Without that information Mears would not have sufficient knowledge of any infringement of the Regulations. Without that knowledge Mears cannot make an informed view as to whether there has been an infringement for which it is appropriate to bring proceedings.

In my judgment, Mears had sufficient Knowledge only when the Model Answers were disclosed to them on 13 December 2010, as a result of my decision in relation to disclosure. It follows that the amendments to paragraphs 20(3) and 20(4) for which permission was sought were notified under Regulation 47(7)(a) and proceedings were brought within time under Regulation 47(7)(b) and permission is therefore granted with effect from 19 January 2011 to make those amendments.

The claims made by Mears arise out of matters which are alleged to be breaches of Regulations 4(3) and 30(3) to (5), being a breach of the obligation of transparency under Regulation 4(3)(b) and the of the obligation to state criteria and weightings under Regulation 30(3).

There are essentially three aspects of the Procurement which give rise to the grounds of challenge by Mears: The Evaluation Table, the Scoring Table and the Model Answers. The Evaluation Table was part of the ITPD. The Scoring Table and the Model Answers both formed part of the document prepared by LCC for internal use with the title: “Bidders Outline Solutions Submission, Qualitative Evaluation Guidance and Model Answers”.

The matters relied on by Mears in respect of those three separate aspects are:

I now summarise the parties’ contentions on those claims.

In relation to the Evaluation Table at paragraph 8.2.1 of the ITPD, Mr Patel, in his closing submissions, submitted that LCC had failed to provide the weightings which it applied within each of the eight sections in the Evaluation Table. Whilst the overall scores for each section were set out in the table and this gave the relevant weightings between each section, it was not clear how the marks for the section were distributed between the questions under each of the relevant paragraphs 5.2.1 to 5.2.15 (paragraph 5.2.15 being an additional paragraph added by amendment to the Works Information Section) referenced in each section of the table.

He submitted that those weightings for the sections of the Evaluation Table were not evident because LCC had failed to inform the bidders that, as was stated in LCC’s internal scoring guidance, each question would be marked out of 10 and therefore that the weightings given to each of paragraphs 5.2.1 to 5.2.15 depended on the number of questions under each of those paragraphs. For instance for the Management Criteria under the Core Service Requirement Section of the table, there was reference to the questions under paragraphs 5.2.4, 5.2.8 and 5.2.11. There were 11 questions under paragraph 5.2.4 (Q4.1 to 4.11); 3 questions under paragraph 5.2.8 (Q8.1 to 8.3) and 3 questions under paragraph 5.2.11 (Q11.1 to 11.3). Each question was given a score out of 10 so for the total of 17 questions the maximum score was 170. The overall mark for those 17 questions was 15. The questions under paragraph 5.2.4 therefore had an overall mark of 9.70 (11/17 of 15) whilst under paragraphs 5.2.8 and 5.2.11 the score for each question was 2.65 (3/17 of 15). Similarly each of the questions under the criteria in the Works Information Section had marks of 9.2 (paragraph 5.2.5), 1.08 (paragraph 5.2.6), 1.08 (paragraph 5.2.13), 5.95 (paragraph 5.2.14) and 2.7 (paragraph 5.2.15).

In relation to the Scoring Table Mr Patel submitted, first, that LCC had failed to inform tenderers that to score more than 7 in relation to any question depended on the question having an answer which permitted of innovation and he submitted that not all questions did so. He submitted that to achieve scores of 8, 9 or 10 the questions in the Scoring Table required a response which indicated innovation or was innovative.

He submitted, secondly, that LCC had failed to inform tenderers that the ability of a bidder to score more than 9 in relation to any question depended on the bidder exceeding the requirements of the ITPD because for a score of 9 the response had to be “capable of exceeding expectations”.

In relation to the Model Answers, Mr Patel contended that some of the answers contained criteria, sub-criteria or weightings which should have been disclosed to bidders.

Mr Andrew Arden QC submitted that, on the evidence of Mr Rigby and Mr Small, the scoring guidance, including the Scoring Table, was not prescriptive but a guide and that the Model Answers were no more than “considerations to which reference should be made”. Their content was not “prescriptive or exhaustive”.

He submitted that the scoring guidance, including the Scoring Table, was not something which LCC were obliged to disclose and did not fix the way in which marks were to be awarded. He said that scores of above 7 could be awarded even where there was no innovation and that the score of 10 could be awarded without the response being capable of exceeding expectations. However, in any event, he submitted that the reference in the score of 10 was to the response being capable of exceeding expectations not exceeding the requirements of the ITPD.

In relation to the weightings for the sections in the Evaluation Table, he submitted that the weightings were based on the scores for each of the questions being the same, whether a maximum of 10 or some other figure. That was what would be expected and Mr Arden QC referred to the question which had been posed by a tenderer and was answered by LCC on 14 April 2010, prior to the extended date for return of the ITPD submission of 5 May 2010. The question was “Please could you confirm if the questions within each section are weighted equally” and the answer was “Please refer to the table at 8.2.1 on page 131 [of the ITPD]”. There was then no further query raised by any tenderer.

Mr Arden QC also referred to Letting International v Newham [2007] EWCA Civ 1522 where, in the interlocutory appeal, Ward LJ had referred to the assumption by the tenderer that equal marks would be awarded for each of five method statements which were to be awarded 50% of the marks allocated to one of three main criteria. He said at [41] that each of the method statements “was given a different percentage mark, not (as might otherwise have been expected) equal marks.” At the trial, [2008] LGR 908, Silber J said at [66] that he accepted that the person who had prepared the tender for the claimant had assumed that “there was nothing in the tender documentation to indicate that some of those headings were more important to Newham than others, this would mean that each heading would then have an equal weighting of one-fifth of the 50% attributed to them (ie 10%).”

In relation to the Model Answers, Mr Arden QC submitted that the Model Answers were not something that LCC was obliged to disclose to tenderers as they were a guide which LCC was entitled to prepare for internal use as part of their discretion in formulating and evaluating the Procurement. He submitted that, on analysis, the Model Answers were responses to the questions and did not change the question which the tenderer had to address. He said that if Model Answers were disclosed then tenderers would be being provided with the answers and this would take away the effectiveness of asking questions which sought the tenderers’ own answer so as to differentiate between tenderers.

It is convenient at this stage to summarise the law relating to claims made under Regulations 4 and 30.

Most of the decisions have been concerned with Regulation 30 or its predecessor under earlier legislation. There are a number of decisions of the European Court which have then been considered in decisions in the English courts.

In Universale-Bau AG and others v Entsorgungsbetriebe Simmering GmbHCase C-470/99 [2002] ECR I–11617 the tender indicated that the tenderers’ “technical operating capacity over the last five years” would be taken into account to rank the tenderers’ applications to tender and that the five highest would be invited to submit tenders. It also stated that the evaluation of the applications would be carried out according to a scoring procedure which had been lodged with a notary. The question was whether it was necessary for the scoring procedure to be communicated to the tenderers.

The European Court, dealing with the earlier Directive 93/37, held that the principle of equal treatment implied an obligation of transparency and that Article 30(2) of Directive 93/37 also imposed an obligation to state all the criteria which the contracting authority intended to apply to the award, where possible in descending order of their importance.

It was held at [99] and [100] that the contracting authority was obliged to inform tenderers of any rules for the weighting of the selection criteria which it intended to use.

In ATIEAC Srl e Viaggi di Maio Snc and others v ACTV Venezia SpA and others Case C-331/04 [2005] ECR I-10109. In inviting tenders the contracting authority had set out four criteria allocating points for each, showing the weighting. Under the third criterion for which there were 25 points, those assessing the tenders had to take into account five items and different points, ranging from 2 to 8 points, were allocated to each of those items or sub-criteria. The question was whether those weightings for the sub-criteria should have been disclosed.

The European Court was dealing with Article 36(2) of Directive 92/50 which was in similar terms to Article 30(2) of Directive 93/37 in the Universale-Bau case. The Court set out the general principle in the following terms at [24]:

“Similarly, in order to ensure respect for the principles of equal treatment and transparency, it is important that potential tenderers are aware of all the features to be taken into account by the contracting authority in identifying the economically most advantageous offer, and, if possible, their relative importance, when they prepare their tenders (see, to that effect, Case C-87/94Commission v Belgium [1996] ECR I-2043, paragraph 88, and Case C-470/99 Universale-Bau and Others [2002] ECR I-11617, paragraph 98).”

The Court then considered whether there was a breach of this principle when the contracting authority applied undisclosed weightings to the sub-criteria in the third criterion for the award of the contract. It first dealt at [26] to [31] with the following three matters which the European Court said had to be considered:

“In that regard, it must be determined first whether, in the light of all the relevant facts of the case in the main proceedings, the decision applying such weighting altered the criteria for the award of the contract set out in the contract documents or the contract notice. If it did the decision would be contrary to Community law.

Second it must be determined whether the decision contains elements which, if they had been known at the time the tenders were prepared, could have affected that preparation. If it did the decision would be contrary to Community law.

Third, it must be determined whether the jury adopted the decision to apply weighting on the basis of matters likely to give rise to discrimination against one of the tenderers. If it did the decision would be contrary to Community law.”

The Court then considered the circumstances in which a contracting authority could attach specific undisclosed weight to sub-criteria by dividing among those sub-criteria the points awarded to a particular criterion. The Court said at [32] that they were not precluded from doing so provided that the decision to apply those weightings:

“— does not alter the criteria for the award of the contract set out in the contract documents or the contract notice;

— does not contain elements which, if they had been known at the time the tenders were prepared, could have affected that preparation;

— was not adopted on the basis of matters likely to give rise to discrimination against one of the tenderers.”

In Emm G Lianakis AE and others v Municipality of Alexandroupolis Case C-532/06 [2008] ECR I-251 the contract notice referred to the award criteria in order of priority but when evaluating the tenders those assessing the tenders defined sub-criteria and weighting factors for each of the award criteria and the sub-criteria.

The European Court was again dealing with Article 36(2) of Directive 92/50. The question was whether, where the contracting authority had stated the criteria to be applied, it was precluded from evaluating the tenders using undisclosed weighting factors and sub-criteria.

The court referred to Article 36(1)(a) of Directive 92/50 which set out the following examples of the relevant criteriawhere the award is to be made on the basis of the “economically most advantageous tender”: “various criteria relating to the contract: for example, quality, technical merit, aesthetic and functional characteristics, technical assistance and after-sales service, delivery date, delivery period or period of completion, price...”.

The court dealt first at [29] with the criteria and stated that the list in Article 36(1)(a) was not exhaustive and that the choice of criteria was left to the contracting authority but stated that “their choice is nevertheless limited to criteria aimed at identifying the tender which is economically the most advantageous...”.

It then differentiated between these “award criteria” and other criteria as follows at [30]:

“Therefore, 'award criteria' do not include criteria that are not aimed at identifying the tender which is economically the most advantageous, but are instead essentially linked to the evaluation of the tenderers' ability to perform the contract in question.”

In concluding that the contracting authority was precluded from later stipulating the weighting factors and sub-criteria to be applied to the award criteria, the European Court said at [38]:

“Therefore, a contracting authority cannot apply weighting rules or sub criteria in respect of the award criteria which it has not previously brought to the tenderers' attention.”

In Evropaïki Dynamiki Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v European Maritime Safety Agency (EMSA) Case T-70/05 [2010] EUECJ T-70/05 the unsuccessful bidder alleged, amongst other things, that the contracting authority had used vague criteria and then subdivided the criteria into sub-criteria to evaluate the tenders.

The relevant provision in that case was Article 138 of Commission Regulation No 2342/2002 which gave examples of the criteria which had to be stated and at Article 138(3) stated that the contracting authority should specify “the weighting it will apply to each of the criteria”.

The European Court cited the ATI and the Lianakis cases and concluded at [146] that the provisions of Article 138(3):

“require that potential tenderers be aware of all the features to be taken into account by the contracting authority in identifying the economically most advantageous tender and their relative importance when they prepare their tenders...”.

At [147] the court cited the Lianakis case at [38] and said: “a contracting authority cannot apply sub-criteria for award criteria which it has not previously brought to the tenderers' attention.”

The court then added at [148] that:

“In accordance with settled case-law, it is, none the less, possible for a contracting authority, after expiry of the period for submission of tenders, to determine weighting coefficients for sub-criteria of award criteria previously established, on [the three conditions set out in the ATI case]”.

The English and Northern Irish courts have considered the approach to the 1993 Regulations in a number of decisions. It is convenient to refer to the guidance provided in those decisions:

First, in Lion Apparel Systems Limited v Firebuy Limited [2008] EuLR 191, Morgan J had to consider whether to grant an interim order to prevent a contracting authority from entering into a contract with a tenderer. At [35] to [38] he summarised the principles that the court is to apply when being asked to review a decision or step take in a public procurement process:

“35.

The court must carry out its review with the appropriate degree of scrutiny to ensure that the above principles for public procurement have been complied with, that the facts relied upon by the public authority are correct and that there is no manifest error of assessment or misuse of power.

36.

If the authority has not complied with its obligations as to equality, transparency or objectivity, there is no scope for the authority to have a “margin of appreciation” as to the extent to which it will, or will not comply with its obligations.

37.

In relation to matters of judgment, or assessment, the authority does have a margin of appreciation so that the court should only disturb the authority’s decision where it has committed a “manifest error”.

38.

When referring to “manifest” error, the word “manifest” does not require any exaggerated description of obviousness. A case of “manifest error” is a case where an error has clearly been made.”

Secondly, in Letting International at [52], [53], [57] and [64] Silber J applied the principles derived from the ATI Case at [24] and [32] and the Lianakis case at [36], as summarised above, in deciding that:

In McLaughlin and Harvey v Department of Finance and Personnel (No 2) [2009] EuLR 82 Deeny J in the Northern Ireland High Court had to consider a case where it was contended that the contracting authority had marked tenders using a methodology which had not been disclosed, using new and undisclosed criteria, including some 39 sub-criteria and 186 sub-sub-criteria. Dealing first with the 39 sub-criteria which were given weightings, Deeny J said this at [44]:

“Admittedly, one could argue that there was not a true breach of transparency as long as these topics were reasonably predictable by an informed bidder and were consistent with the published criteria. I find that was true of these topics. But that argument is undermined by the fact that they are then given weightings which vary from topic to topic. It did not seem to me to be made out or indeed even argued, that the weightings for each topic were predicted or predictable by a reasonable bidder. There may not have been anything irrational about them but they were very much subjective judgments formed by the panel collectively. I find that the sub-weightings were not predictable. It seems to me therefore that on that basis the topics as I have called them beginning with “data base of costs information” under whole life costs in BO1 down to “liaison with employer/ICT” in EO2 are elements which ought to have been disclosed with their weightings to the plaintiff and other bidders.”

At [46] he referred to the submission that only certain criteria had to be disclosed and said:

“The defendant’s attempt at a rigid stratification does not seem to me borne out by the case law of the European Court. It seems to me that the language of ATI in particular is designed to secure, as it says, that the bidders know all the elements or sub-elements which could affect their preparation of the bid.

…

However, having chosen to have a Framework Agreement for all those tasks it is clear that at least so far as the 39 items are concerned that they and their weightings did have to be furnished to the bidders in advance to comply with the decisions of the European Court. I find as a fact that this material, and the evidence before me, could have affected the preparation of the document. Indeed I consider it likely that it would have affected such preparation. A bidder would be bound to take it carefully into account in allocating its strictly limited number of characters in each section.”

At [48] and [49] he gave an indication about the 186 sub-sub-criteria as follows:

“48.

A separate important issue is whether the 186 items to be found under these various 39 sub-criteria or elements or sub-elements are permissible. Although there was some brief reference in the oral argument it has not been substantially addressed in the written submissions which the court received in writing in lieu of oral submissions. Given that I am making a finding against the defendant in any event I am therefore minded not to make an express ruling in connection with them. However, to assist the parties I would indicate that I consider there is force in the evidence of Mr Rowsell that to have provided these in such detail to the bidders would have in fact undermined the efficacy of the process. One wanted to find the most economically advantageous tender bids. If you provided all 186 items even an incompetent tenderer might manage to and quite possibly would manage to put together a bid which referred to all 186 leaving the panel uncertain as to which the preferable bidder was. Although not a point I think made on behalf of the defendant it may be that the 186 are properly described as pieces of evidence for performance of the criteria or sub-criteria rather than ranking as either of those themselves. To approach it in another way, while unattracted by the defendant’s attempt at a rigid classification beginning with quality and price being the only two criteria, one might, on a view which I prefer, nevertheless acknowledge that the 186 were sub-sub-criteria. Also bear in mind the approach of the Court in Lianakis which drew a distinction between award criteria and what might be described as performance criteria. They are not directly analogous but they do seem to contemplate that not everything taken into account by a panel needs to be disclosed in advance to the bidder.

49.

A further distinction can be drawn between the 186 items and the 39 or 49 sub-criteria. The individual items have not been given weightings whereas the former, of course, have been given weightings. That may make their use more defensible by the defendant.”

In Morrison Facilities Services Limited v Norwich City Council [2010] EWHC 487 (Ch) Arnold J granted an interim order preventing the contracting authority from entering into a contract. One of the grounds relied on by the claimant tenderer arose from an undisclosed scoring sheet which contained “aide memoire of expected content”. After referring to the decisions of Silber J in Letting International and of Deeny J in McLaughlin & Harvey (No2) he recited the arguments of counsel as follows:

“Against that background, counsel for Morrison submitted that it is seriously arguable that, by applying the matters set out in the aide memoire and taken into the scoring sheets, the Council had in the present case applied additional criteria to the evaluation of the bids which had not been disclosed to the bidders in advance as required by the Directive and the 2006 Regulations. Against that, counsel for the Council submits that everything that was set out in the aide memoire and taken into the scoring sheets was something that was implicit within the fairly detailed criteria that were set out in the invitation to tender. Moreover, he made the point that, as can be seen from the example of Question 1, which I quoted earlier, the criteria on their face were non-exhaustive and exemplary. Accordingly, he submitted that it is not arguable that the Council has acted in breach of its obligations.”

Arnold J stated at [29] that, on the test to be applied to interim orders:

“… there is a serious issue to be tried as to whether the Council complied with the obligation to disclose the evaluation criteria in advance to prospective tenderers. I consider it arguable that it did not do so, in the same way as the Defendants in the Lettings International and McLaughlin and Harvey cases were held not to have done so.”

In J Varney & Sons Waste Management Ltd v Hertfordshire County Council [2010] LGR 801, the unsuccessful tenderer contended that the contracting authority had breached the 2006 Regulations because it had failed to state in the Invitation to Tender that certain return schedules were criteria or sub-criteria and what weightings were to be attached to each of them. Flaux J held that the return schedules were not award criteria: some return schedules were sub-criteria or a sub-set of stated criteria; one return schedule dealt with one stated criterion and one was a summary of information given by the tenderer. He also held that there was no requirement to disclose in advance the sub-criteria or the weightings attached to them as such disclosure could not have affected the preparation of any of the tenders.

Flaux J set out the reasons for his conclusions that the return schedules were not award criteria at [88] as follows:

“My reasons for concluding that the return schedule in this case, unlike the method statements considered by Silber J. in the Letting International case, are not award criteria, are as follows. First the relevant stated award criterion in that case of ‘Compliance with Specification’ was somewhat broad and vague and so it is not difficult to see why the judge considered that the method statements, which were much more specific, were distinct award criteria. Second, Silber J. determined that the method statements were distinct criteria by reference to the dictionary definition of ‘criterion’ as ‘principle, standard or test by which a thing is judged, assessed or identified’. Applying that definition, it seems to me that the relevant principles or standards or tests in the present case were ‘customer satisfaction’ and ‘price’ and the return schedules were not separate principles or standards or tests but no more than (in the case of Return Schs1-15) sub-sets of those principles or standards or tests. Return Schedule 16 simply dealt with the criterion of price.”

In relation to the question of whether disclosure of weightings could have affected the preparation of the tenders, he rejected the evidence of the claimant that if it had known that each return schedule would be marked with a weighting of 5 marks, it could have affected the preparation of its tender. He then set out and considered at [100] to [102] the submission that the tenders of other tenderers could have been affected and said:

“100.

Mr Coppel emphasised that what Silber J held in the Letting International case that a contracting authority is obliged to disclose any sub-criteria which not merely did affect the preparation of the tender but which could have affected that preparation, so that the authority will only be excused from failure to make such disclosure if that disclosure could not have affected the preparation of any of the tenders. He submitted that the council simply could not demonstrate that this was the case here.

101.

In contrast, Mr Howell submitted that this is where the statement by the council in the ITT that ‘any queries arising from the tender documents which may have a bearing on the offer to be made should be raised’ was of considerable significance. In the event, none of the potential tenderers raised any query about sub-criteria or the weightings attached to them. He submitted that this showed that, in the present case, there was no need for notification of such matters, as the tenderers themselves did not consider that such further information could affect their offers.

102.

It seems to me that this submission is correct: in reality it was perfectly obvious that the award criteria were going to be marked by reference to the information provided in response to the return schedules and if any of the tenderers had wanted clarification of that or of what marks would be attached to each return schedule, they would surely have asked. Accordingly I am satisfied that this is a case where within the ATI principle, there was no requirement to discloses in advance the sub-criteria or the weighting attached to each of them, because such disclosure could not have affected the preparation of any of the tenders. In the circumstances, the council was not in breach of the obligation of transparency in that regard.”

I derive the following principles as to the application of the Regulations from those decisions:

With those observations I now turn to consider the complaints in this case.

The Evaluation Table at paragraph 8.2.1of the ITPD set out a series of sections which identified one or more criteria on which quality was to be evaluated. The overall score for each section and therefore the weighting between the sections was clearly identified. However, each of the criteria within a section then had a number of questions posed which the tenderers had to answer. When it came to the weighting as between the individual criteria and as between the questions within each of the criteria, the table was silent. This led to the sensible question posed by a tenderer seeking to knowif the questions within each section were weighted equally. When LCC responded on 14 April 2010 their reference to the table itself did not answer the question and was not a helpful answer. At that stage the return of tenders was imminent but was then extended to 5 May 2010. It is true that no tenderer then chased for a better reply nor was one given. However, I consider that the posing of the question is strong evidence that the issue of the way in which the scores were dealt with and the relative weightings to be given to each question were matters which could have affected the preparation of the tenders.

By applying the scoring guidance each question was to be marked equally out of 10. This meant that, depending on the number of questions under each of the criteria, there would be a total possible mark for one criterion with 11 questions of 110 and for another with 3 questions of 30. It would have been possible for LCC to specify either that this led to each of the criteria being weighted differently, as was in fact done, or to each of the criteria within a section being given the same weight so that the overall mark which could be derived, for example from the 110 marks for the questions relating to one criterion, was the same as the overall mark which could be derived from, for example, the 30 marks for the questions in respect of another criterion.

In essence the question would be whether each of the questions within a section was given an equal contribution to the overall mark or whether each of the criteria within a section was given an equal contribution.

I consider that the questions in this case represented criteria or sub-criteria. They were set out within the Evaluation Table which was the central statement of the criteria and their weighting. They were clearly aimed at identifying the most economically advantageous tender.

I do not consider that LCC can gain comfort either from the fact that tenderers did not ask any further clarification to the answer provided on 14 April 2010 or from the observations in the interlocutory appeal in Letting. The fact that the question was not pursued, given the timing of the answer provided by LCC, cannot sensibly be taken to mean that the need for that information was any less. It is evident that the information was needed and was being requested because it could have affected the tenders.

As a result, the criteria or sub-criteria referred to in the Evaluation Table at paragraph 8.2.1 are matters where LCC must properly disclose weightings and, in my judgment, by failing to notify the tenderers of the scoring guidance and consequent weighting to be applied to those criteria or sub-criteria which they intended to use, LCC infringed both the transparency provision in Regulation 4(3) and the express provision as to criteria weighting in Regulation 30(3).

There are two complaints as to the Scoring Table. First that a maximum score of 7 could not be achieved on some questions because a score of 7 required the tenderer to demonstrate some degree of innovation and not all questions permitted any innovation. Secondly, it is said that the score of 10 could only be achieved by exceeding the requirements which meant that a tender which fully met the requirements could only achieve a maximum score of 9.

In approaching these matters, I bear in mind the nature of the tendering exercise in this case. LCC chose a competitive dialogue procedure which, as Mr Backhouse explains, was because in the view of LCC this was a “particularly complex contract” within the provisions of Regulation 18(1)(a) for which LCC could not objectively define the technical means of satisfying its needs or objectives. Mr Backhouse also says that the point of using this procedure was to shift to the tenderer some of the burden of defining or proposing solutions as to how to achieve LCC’s needs. At paragraph 9 of his witness statement he refers to various provisions of the ITPD to make good his statement that LCC were looking not just for technical skills and cost but also for the ability of tenderers to approach tasks imaginatively, innovatively, even creatively. I accept that evidence. It is clear from the provisions of the ITPD that LCC were looking for a number of benefits which required initiative on behalf of the successful tenderer. They were looking for contracts which provided innovative solutions to several practical matters which faced the ALMOs and which would also help to fulfil a number of social, economic and other benefits.

In relation to the first complaint about the need for innovation to achieve a score of more than 7, there are two aspects. First, there is a question whether the Scoring Table which formed part of the scoring guidance was intended to be and was applied in a prescriptive sense in evaluating the tenders. Secondly, there is a question whether a score of 7 could not be achieved on certain questions because innovation could not be demonstrated.

In his first witness statement Mr Rigby explained that the panel involved in evaluating the tender consisted of 31 people drawn from officers and tenants of the ALMOs and officers of various departments of LCC. He said that whilst the scoring involved a large element of discretion and judgment, to try and ensure that the large and disparate group of people on the Evaluation Panel acted in a consistent manner, they were provided with the written guidance which he produced in conjunction with consultants, in particular, Mr Small and which was sent out on 7 May 2010. He also referred to the PowerPoint presentation made to the members of the Evaluation Panel. In his third witness statement Mr Rigby states that the scoring guidance was not and could not be prescriptive or exhaustive, given the nature of the procurement exercise. He stated that the use of the term “guidance”, rather than rules or criteria, was deliberately chosen so that it was used as a guide. He says that he does not believe that there was any misunderstanding of this within the members of the evaluation panel.

In his witness statement Mr Small also refers to his involvement in producing the guidance and in giving the PowerPoint presentation on 10 May 2010. He says that it was made plain to the members of the Evaluation Panel that the guidance was not prescriptive but was designed to assist them to exercise their judgments in a consistent manner.

The wording of the guidance and of the PowerPoint slide both refer to the use of the Scoring Table in scoring the answers. The Instructions to Scorers refers to members of the Evaluation Panel using the scoring guidance to score each of the questions and the PowerPoint slide says that each question was to be scored in line with the score definition guidance. I do not consider that the wording of those documents amounts to a statement that the Scoring Table is to be treated as prescriptive or exhaustive. The evidence of Mr Rigby and Mr Small, who were both involved with the document and both gave the presentation using the PowerPoint slides on 10 May 2010, is that the Scoring Table was not to be used and was not used in that way. I accept that evidence. The descriptions under each of the headings indicate generally that better answers will receive higher scores. The statements under each score are in general terms and I consider it was intended to be and was likely to have been treated as general not prescriptive guidance. This means that a score of above 7 could be achieved for a particularly good answer, even if there were nothing particularly innovative.

In any event, even if the Scoring Table was treated as requiring innovation to achieve scores higher than 7 then the fact that innovation was being looked for was made plain in the ITPD and tenderers would therefore be aware that innovative solutions would achieve better marks. The way in which innovation can be shown in relation to particular answers can be seen from both the Model Answers and the answers given by Mears, which I have dealt with below. I also bear in mind that “innovation” is a particularly subjective concept and that what is considered innovative would be a typical matter within the general scope of the discretion of the Evaluation Panel. Those evaluating the tenders would have to a greater or lesser extent specialist knowledge of the way in which LCC’s services were currently delivered and might well see innovation in what was proposed by tenderers, particularly as a number of the individuals on the Evaluation Panel had technical expertise. I am not persuaded, having reviewed all the questions, that there are any particular questions on which no innovation could be shown. Even for some of the questions where an innovative approach may not be obvious, would not mean that some degree of innovation might not appear in the answer.

I therefore reject the complaint that, because the Scoring Table gives scores above 7 for answers showing some innovation, this means that for some questions tenderers are limited to 7 marks. I consider that this is neither the result of the scoring guidance in the form of the Scoring Table given to the Evaluation Panel nor do I consider that there were answers where scores above 7 were not possible because answers showing innovation could not be given.

The second complaint arises from the reference by Mr Backhouse in his letter to Trowers & Hamlin of 23 September 2010 to the description of a score of 10 being “capable of exceeding expectations”. He said that “bidders must demonstrate to the evaluation panel not only their experience and ability to meet the requirements of the ITPD but to exceed them”. Mears contend that this meant that a score of 9 applied to a response which fully complied with the requirements of the ITPD and that a score of 10 could only be given if a tenderer exceeded those requirements.

In his witness statement Mr Backhouse says that this was careless wording and that he did not mean that marks were set aside for going beyond the invitation document which he was aware would be contrary to the Regulations as decided in Letting International v Newham. He said that what he intended to say is that tenderers were expected to go beyond the basic requirements in the ITPD. Whilst his evidence in cross-examination as to how the basic requirements might be exceeded was not clear, I consider that there is nothing to support what is said in the letter of 23 September 2010 which was, in my judgment, just an inappropriately worded sentence. In context LCC were looking for something creative or innovative and such a solution would, in this sense, exceed expectations. I see no grounds for suggesting that LCC actually applied any scoring regime which meant that the score of 10 was reserved for answers which exceeded the requirements of the ITPD.

For those reasons I do not consider that Mears have made out any complaint in respect of the Scoring Table: it was not exhaustive or prescriptive; scores of up to 10 were possible for all questions and the top scores were not reserved for answers which went beyond the criteria set out in the ITPD.

Mears say that a number of the Model Answers go beyond the scope of the questions and that the answers therefore add criteria, sub-criteria or weightings of which Mears were not aware and which could not be allowed for in its tender. LCC say that the Model Answers were not prescriptive but were prepared as general guidance. They also point out that the Model Answers were prepared by people who also prepared the questions and were involved in the Evaluation Panel. They say that the Model Answers respond to the questions and do not contain any criteria, sub-criteria or weightings which should have been disclosed.

Mr Rigby in his third witness statement states that, as with the remainder of the guidance, the Model Answers were not prescriptive and were intended to be referred to as guidance. He says that the Model Answers represented the judgment and experience of the people who drafted them so as to provide examples of good answers without taking away the discretion of the Evaluation Panel in the light of the particular answers given. He points out that the answers gave no scores or weightings to any particular aspect.

I must therefore first decide upon the status of the Model Answers. I have found that the Scoring Table was only provided to those carrying out the evaluation on the basis that it was not exhaustive or prescriptive. Does that also reflect the position in respect of the Model Answers? I have no doubt that the intention was that the Model Answers were provided to the Evaluation Panel so that they were aware of particular aspects which might be expected to be in the answers. In that way, they took on a different role to the Scoring Table because they provided particular answers which were to be considered and used to inform the Evaluation Panel, some of whom were not expert in the field.

The fact that this is what happened is amply demonstrated by the spreadsheet which was attached to the email from LCC of 15 July 2010. It is clear from that document that LCC attached great importance to the Model Answers and stated, for instance, that Model Answers were “missing”, or answers were not matching the “full response” in the Model Answers or the Model Answers were not always “fulfilled” or there were “gaps” compared to the Model Answers.

I am therefore satisfied that the guidance given in the Model Answers was intended to be and was used by the Evaluation Panel as a template against which they decided whether Mears had given a proper answer. If the Model Answers introduced relevant new criteria, sub-criteria or weightings they should, in principle, have been disclosed. The issue is then whether the Model Answers did introduce new criteria, sub-criteria or weightings which were not but should have been disclosed to tenderers.

The approach to this aspect of the case must, I consider, first depend on whether the Model Answers introduce criteria, sub-criteria or weighting which were not disclosed. This requires consideration of the principles I have already set out: whether on a reasonable view, it introduces different or new criteria, sub-criteria or weightings in the light of what would be reasonably foreseeable to areasonably well-informed and normally diligent tenderer; whether it could have affected the tenders and whether it is a matter aimed at identifying the most economically advantageous tender rather than ability to perform.

It is convenient, first to see whether it introduces new criteria, sub-criteria and weightings. In relation to criteria or sub-criteria, I consider that the Model Answer must be reasonably foreseeable to a reasonably well-informed and normally diligent tenderer so that, in essence, it is a reasonable response to the question posed. If it responds to a different question and introduces some further criteria or sub-criteria which such a tenderer could not take into account in preparing its tender then it should, in principle, have been disclosed. In dealing with that aspect, I must bear in mind that any question might give rise to a very broad range of answers all of which might be treated as responding the question. In this case where LCC were looking for innovation from the tenderers, the range of possible answers is likely to be very wide.

In relation to weighting, if the Model Answer emphasises one aspect of the answer above others in a manner which alters the weighting to be given to that particular matter which would not be reasonably foreseeable to a well-informed and normally diligent tenderer then that should, in principle, be disclosed.

Where new criteria, sub-criteria or weightings are added by the Model Answers which should, in principle, have been disclosed then they would not need to be if they could not for some reason affect the preparation of the tenders or if they introduced matters which were concerned with performance rather than evaluation of the most economically advantageous tender.

In the light of those considerations, the initial test to be applied is, in my judgment, whether the answer is a reasonable response to the question, as set out above and also whether the answer over-emphasises a particular aspect so as to give it a weight which was not foreseeable.

With those matters in mind I now turn to consider the particular complaints which Mears makes about the Model Answers. I shall set out the relevant question and then the aspect of the Model Answer which gives rise to the complaint in the Amended Particulars of Claim, as developed in cross-examination of Mr Rigby. I also take account of what Mr Rigby and Mr Lester said in their evidence.

Q2.1: “Please outline your plan for provision of local employment and training opportunities in the first year of this contract, including the resources within and external to your organisation that will support that. In addition describe how the first year plan will be developed to deliver sustainable benefit by way of indicative plans for years 5 and 10 of the contract.”

Mears refers to the Model Answer in which it is stated at the second bullet paragraph: “Identify how health and safety issues will be managed” and says that it is not obvious from the question and the ITPD that the question required an answer as to how health and safety issues would be managed.

Mr Rigby said that health and safety was a principle applied throughout the ITPD and in his third Witness Statement he referred to paragraphs 3.3.2, 3.4.6 and 3.11 of the ITPD which stressed health and safety requirements. He said that by asking for the long term plan of training LCC were asking for a planned structure, part of which would include health and safety issues. He accepted that there was also a completely different health and safety section in the submission but said that there was an option for the bidder either to provide a cross-reference or to provide the same answer as in another question. In any event, he said that Mears had understood and dealt with health and safety in their answer.

This question is contained in section 5, Quality Deliverable Questions at paragraph 5.2.2 “Added Value Questions”. In the context of employment and training opportunities I consider that health and safety issues would have to be managed and would be one of the matters which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with. I accept Mr Rigby’s evidence on this. Whilst Mr Lester seeks to minimise the effect of Mears’ answer which mentioned the Mears Training Academy and skills and trades training which included health and safety, I consider that the answer shows that these issues were a foreseeable part of the question. In my judgment, the Model Answer reasonably responds to the question.

Q2.4: “Provide details of how the Bidder will adopt innovative approaches to reduce the environmental impact of their activities to deliver the repairs and maintenance contract in accordance with good practice (in accordance with the Reduce, Reuse, Recycle initiative) and the Employer sustainability strategy”

Mears refers to the second of two bullet points in the Model Answer which stated: “Fuel poverty reduction proposals detailed”. Mears says that it was not obvious that the innovative approaches would require a reference to fuel poverty.

Mr Rigby said that his understanding was that in terms of energy efficiency people dealing with this aspect would address fuel poverty which refers to residents’ inability to pay for the energy required to run their homes. He referred to paragraph 2.7.2 of the ITPD under the heading “Environmental Policy & Commitment to Socioeconomic Wellbeing”. In any event, he said that Mears had understood and dealt with fuel poverty in their answer.

This question is contained in paragraph 5.2.2 “Added Value Questions”. In the context of reducing environmental impact and encouraging sustainable procurement I consider that fuel poverty reductions would be one of the matters which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with and I accept Mr Rigby’s evidence on this. It is also evident that these issues were a foreseeable part of the question because Mears in its submission referred to the need to address fuel poverty by providing practical advice on the best way for residents to achieve energy efficiency in their homes. The Model Answer therefore reasonably responds to the question.

Q2.7: “Please describe your approach to improving construction efficiency and quality, and outline what options you may seek to explore to maximise new technologies and supply chain efficiencies to reduce the use of harmful materials: to improve building quality standards; and increase operational performance with regards to the works information”.

Mears refers to the second of two bullet paragraphs in the Model Answer which stated “Proposals identified to access grants for energy efficiency”.

Mr Rigby said he thought that this was a clear requirement and that accessing energy efficiency grants was part of improving the efficiency and quality of homes. In any event, he said that Mears had understood and dealt with these grants in their answer.

This question is contained in paragraph 5.2.2 “Added Value Questions”. In the context of improving construction efficiency and quality I consider that energy efficiency grants would be one of the matters which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with and I accept Mr Rigby’s evidence on this. Whilst Mr Lester states that Mears referred to grant funding he says that they could have provided more detail. However, it is evident that such issues were a foreseeable part of the question because Mears did in its submission refer to the energy initiative funding streams. The Model Answer therefore reasonably responds to the question.

Q3.5: “Please provide details of staff and management training and development arrangements.”

Mears referred to the Model Answer which at the first bullet point noted: “lists of staff”.

Mr Rigby’s evidence on this was not clear. In his third witness statement he said that Mears had provided names, position and responsibilities, experience and key attributes of its staff in answer to Q4.1 marked by some of the same people as Q3.5. In his evidence in cross-examination by Mr Patel he said that what was required here were the roles of the people involved and the answers came back with disciplines or management level and not a list of names. In re-examination by Mr Arden QC about the CVs of key staff, he indicated that they would be the same people within the organisation but, after a number of further questions, said that the same people would not be doing the training and carrying out the management.

This question is contained in paragraph 5.2.3 “Performance Questions”. It relates to staff and management training and development proposals. As Mr Rigby’s evidence showed it is not easy to see that a tenderer responding to this question would reasonably foresee that the question posed would require a list of staff. I also note that Mr Lester says that tenderers would not be expected to provide a list. Rather, if LCC had wanted “lists of staff” then they should have expressly said so. The question sought details of training and development proposals and I consider such lists would not be one of the matters which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with.

The Model Answer therefore does not reasonably respond to the question. I consider that this is a matter which could affect the preparation of the tenders and which is concerned with finding the most economically advantageous tenderer, not performance criteria. The list of staff could affect the quality of the services provided by the tenderers.

Q9.5: “Bidders are to provide details of the ICT system used for running repairs”.

Mears refers to paragraph 3.17 of the ITPD and the third item under the Model Answer to this question: “Indicate if any major changes are planned for the next 2 years - this could be major new version or system replacement”.

Mr Rigby was asked whether, in this way, LCC were favouring tenderers who had made major changes. He said that he did not think so and that the Model Answer was there to see if a major change was going to take place of which LCC needed to be aware in terms of links to their system. He said this had been explained in detail during the dialogue sessions.

This question is in a section dealing with IT links and communications at paragraph 5.2.9 of the ITPD. It relates to the details of the ICT system and if any changes were to be made to that system. I consider that this would be one of the matters which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with under this question, if there were to be such changes. This would not mean, though, that this favoured a tenderer who was to make those changes. The Model Answer therefore reasonably responds to the question.

Q9.6: “Bidders are to provide details of what platform their IT systems run on? If applicable the Bidder is to provide relevant examples of working with the Orchard system?”

Mears refers to paragraphs 4, 5 and 6 of the Model Answer which stated as follows:

“4.

Detail what they require from our ICT applications and development teams.

5.

Detail what we would need to do to access their software if this is proposed by them. This should include minimum client PC hardware and software requirements.

6.

Confirm that they are willing to let their staff access our applications if required. This includes the use of Vasco tokens to do so.”

Mr Rigby stated that these aspects were inherent to the proper working of any IT system and the necessary communications with LCC’s system. He was asked whether the relevant question for those answers would have been how the tenderer’s IT system interfaced with the LCC system. He said that he thought the interface would be part of the system and he noted that there was reference to the Vasco Token in paragraph 3.17.1 of the ITPD. He also referred to Mears’ answer which referred to the fact that Mears already had links with the Orchard system.

This question is in a section dealing with IT links and communications at paragraph 5.2.9 of the ITPD. It relates to Mears’ IT platform but evidently also in the context of the interface with the Orchard system. I consider that the Model Answers all relate to aspects of that interface with the Orchard system and would be matters which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with under this question. The answer given by Mears shows that they were aware of the need to explain that interface. The Model Answer therefore reasonably responds to the question.

Q9.7: “The Bidder is to demonstrate the mobile front end which their workforce utilises?”

Mears refer to answers 6 and 7 of the Model Answer which provided as follows:

“6.

Describe what happens when there is a signal loss.

7.

Explain what can be done if the PDA solution is unavailable for a period of time for any reason.”

Mr Rigby stated that it was inherent in demonstrating the mobile system that the tenderers should address what would happen in the event of problems with the devices. It was put to him that the Model Answers were not related to the question asked. Mr Rigby said that, not being an expert, he considered that the answer dealt with the question in terms of operating the system and the impact of a failure.

This question is again in a section dealing with IT links and communications at paragraph 5.2.9 of the ITPD. It relates to the “mobile front end” or PDAs (personal digital or data devices) and, like all electronics devices, one of the aspects would be the issue of what happens if they go wrong. I consider that the Model Answers all relate to aspects of the mobile front end which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with under this question. The Model Answer therefore reasonably responds to the question.

Q9.8: “The Bidder is to demonstrate ways in which they exchange data electronically with Clients already? How is this done and in what Format?”

Mears refers to the Model Answer under paragraph 4 which stated as follows: “Cover error procedures to ensure no data is lost in either direction.”

Mr Rigby stated that measures to prevent loss of data were part of demonstrating a robust system. It was put to him that this answer was not clear from the question and was related to delivery of the service. He said that it was an answer to the question about delivery of the service.

This question is again in a section dealing with IT links and communications at paragraph 5.2.9 of the ITPD. It relates to the electronic exchange of data and, again like all electronic systems, one of the aspects would be the issue of what is done to prevent data loss. I consider that the Model Answers all relate to aspects of electronic data exchange which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with under this question. The Model Answer therefore reasonably responds to the question.

Q7.3: “Describe your lone working policy and the measures you have in place to ensure suitability of: a) Operatives which you send to the homes of customers who may be classed as being vulnerable?”

Mears refers to the Model Answer and one of the bullet points which states “The safety of the staff is of paramount importance” and says that the Model Answer deals with the risks to the tenderer’s staff when working alone, not the risks to vulnerable customers. Mears says that the question and the ITPD at paragraph 3.1.5 dealt with vulnerable customers.

Mr Rigby stated that this question related to section 6.7 of the ITPD which dealt with health and safety. It was put to him that the focus of the question was the safety of the vulnerable customers but the Model Answer was solely concerned with the vulnerability of the contractor’s staff who were dealing with customers. He said that there was an interface and he could not say that the question was dealing with one aspect rather than the other. In his statement he referred to Mears answer which dealt with both vulnerable customers and Mears’ lone working policy.

This question is in a section dealing with “health and safety questions” at paragraph 5.2.7 of the ITPD. It relates to Mears’ lone working policy and ensuring that operatives are suitable to work in properties with vulnerable customers. The answer given by Mears deals first with vulnerable customers and then exhibits the part of Mears Safety, Health and Environmental Policy which deals with lone working, including issues of vulnerable staff. I consider that the Model Answer relates to aspects of lone working in terms of vulnerability of staff and appears to do so even in relation to the reference to “Operatives dealing with vulnerable tenants”. I consider that on a fair reading of the Model Answer it is limited to lone working or, at the very least, puts all the weight of the answer onto that aspect of the question.

In my judgment the Model Answer emphasises vulnerability of staff in terms of lone working in a manner which has the effect of giving that particular matter a weighting which would not be reasonably foreseeable to a well-informed and normally diligent tenderer. That weighting could affect the preparation of the tenders and is concerned not with performance but with the whether a tender is the most economically advantageous tender from the point of view of the quality of the services.

Q14.1: “Describe what expertise and knowledge your organisation has with servicing/inspection/repair and installation of the following areas of work.” The question then listed various areas of works from “(a) fire alarms” to “(m) electrical rewiring”.

Mears refers to the Model Answer at the fourth bullet point where it says: “Lets say, minimum of 5 years experience” and say that it raises a new criterion or sub-criterion.

Mr Rigby states that it is inherent in asking about expertise and knowledge in Q14.1 that the tenderer should provide information about experience. He refers to the references to experience in the OJEU Contract Notice and the ITPD. He was taken to his third witness statement where at paragraph 52 he said that Mears response to Q14.1 had referred to their service improvement experience “in excess of thirty years”. He accepted that that was not stated in Mears’ response to the question but said he had seen it somewhere.

This question is in a section dealing with Electrical Works Information Questions at paragraph 5.2.14 of the ITPD. It relates to expertise and knowledge in a number of areas of electrical work. This necessarily involves consideration of experience. I consider that the Model Answer relates to knowledge and experience which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with under this question. In the answer to this question Mears referred to its involvement in these areas as being “on-going for many years” The Model Answer therefore reasonably responds to the question.

Mears also refers to the Model Answer to Q14.1 which stated: “partnership agreements with electricity distributor” and says that this introduces a new criterion or sub-criterion. This was also included as a Model Answer to Q14.3 which stated: “Describe how you interrogate the suitability of your subcontractors and how you then supervise them whilst on site, ensuring their work is to the expected standards, equipment specified and H&S is not ignored in the following areas of work” relating to the same areas of work, (a) to (m), as in Q14.1.

Mr Rigby states that agreements with electricity distributors are essential to carry out electrical installations in buildings so that, for instance, electricity supplies could be isolated for work or testing to be carried out. He said that he understood it was common practice to have such arrangements in place to deliver the work.

I consider that the Model Answer under Q14.1 relates to an aspect of expertise and knowledge in respect of electrical work which necessarily requires the involvement with electricity suppliers. The Model Answer under Q14.3 relates to the way in which the tenderers deal with the suitability and supervision of sub-contractors such as electricity suppliers. The Model Answer under Q14.1 and Q14.3 therefore covers something which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with under this question and therefore it reasonably responds to the questions.

Mears also refers to the following Model Answer given under Q14.1 to 14.3: “Identifying areas of work where alternative practices may be implemented through dialogue to achieve energy savings.” It says that this introduces a new criterion or sub-criterion.

Mr Rigby said that efficiency savings were an overarching requirement of the process, referring to paragraph 2.8.2 of the ITPD “Efficiency Savings Agenda”.

The Model Answer given under Q14.1 to Q14.3 deals with energy savings which are part of a tenderer’s expertise and knowledge in respect of electrical work; depend on monitoring and carrying out quality assurance checks for that work and are derived from the suitability and supervision of sub-contractors. The Model Answers under Q14.1 to Q14.3 therefore cover something which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might be expected to deal with under those questions and therefore reasonably respond to the questions.

I have found that in respect of two Model Answers, those responding to Q.3.5 and Q.7.3 that they introduced criteria, sub-criteria or weightings which meant that LCC should have disclosed those matters under Regulations 4(3) and 30(3).

Subject to that, I consider that the other Model Answers cover something which would have been reasonably foreseeable and which a reasonably well-informed and diligent tenderer such as Mears might have been expected to deal with under this question in response to the relevant question. Whilst some of the Model Answers might be considered to be tangential to the question, they deal with aspects which were covered by the ITPD and not new criteria and were within the margin of appreciation or discretion where the court will only disturb the contracting authority’s decision in relation to matters of judgment or assessment if the authority has committed a manifest or clear error. The other matters relied upon by Mears in this case do not come near to establishing anything near that.

Where, as is now common, the contracting authority provides those people who evaluate tenders with information such as model answers then, as shown in this case, there is generally no reason to disclose those. I accept that to have to do so would raise practical difficulties in being able to assess tenders when the tenderers had seen those model answers. However, the information such as model answers needs to be scrutinised to ensure that undisclosed criteria, sub-criteria and weightings are not introduced in this way.

For the reasons set out above, I consider that Mears have established a breach of Regulations 4(3) and 30(3) in respect of the Evaluation Table, a limited breach of those Regulations in respect of the Model Answers but no breach in respect of the Scoring Table.

I now turn to consider causation of loss.

In order for a breach of the Regulations to be actionable Regulation 46(6) provides:

“A breach of the duty owed in accordance with paragraph (1) and (2) is actionable by any economic operator which, in consequence, suffers, or risks suffering, loss or damage and those proceedings shall be brought in the High Court.”

What then is the test to be applied in relation to this issue where a breach of the Regulations has been established? I accept Mr Patel’s submission that the correct test, in the context of this case where I am not considering the detail of the loss, is whether there is a real or significant as opposed to a fanciful chance that Mears would have been selected for the ITCD stage of the Procurement had LCC given advance disclosure of the weightings in the Scoring Table. I consider that this follows from the following decisions.

In the interim relief appeal in Letting International at [20] Moore-Bick LJ said this:

“The argument is that in order to be entitled to pursue a claim of any kind a bidder, in this case the contractor, has to show that were it not for the alleged breaches of the regulations, his tender would have been successful. I find it difficult to accept that submission. The purpose of regulation 47(6) is to render a breach of the regulations actionable at the suit of an economic operator who has suffered or risks suffering loss or damage as a result. In other words, it is concerned with providing a cause of action, not with establishing a precondition to the commencement of proceedings. If a tenderer seeks a remedy in damages, it will of course, be necessary for it to prove its loss at trial, but I doubt whether in every case it need go so far as to show that it would have been successful in obtaining the contract. If the breach of duty has compromised the transparency and fairness of the process as a whole, the claimant will have lost the opportunity of taking part in a properly constituted and properly operated tender process, and it is at least arguable that the loss of a significant chance of obtaining the contract is enough to found a claim. That is really what the contractor is saying in this case. In my view, therefore, regulation 47(6) does not provide a complete answer to the contractor’s claim in the present cases.”

In the substantive decision in Letting International at [131] to [141] Silber J dealt with the submissions by counsel for Newham that to comply with regulation 47(6) the claimant had to show that it had suffered actual loss in that if the errors complained of had not occurred, it would have been awarded a contract and in consequence, it would have made some profit whereas the claimant submitted that a party can satisfy Regulation 47(6) if there is a chance of suffering a loss. His conclusion at [141], relying on [20] of the judgment of Moore-Bick LJ in the interim relief appeal, was that: “Regulation 47(6) means that the claimant is not precluded from claiming that there has been a breach of reg 30 provided that it can show that it has suffered in the words of Moore-Bick LJ ‘the loss of a significant chance of obtaining the contract’ and it is in unnecessary to show actual loss.”

In Lion Apparel Morgan J referred to regulation 32 of the 1993 Regulations and said at [42]:

“The bidder will be able to show that a breach of duty will cause him to suffer loss or damage, or the risk of loss or damage, if he had a chance (which the law recognises sufficiently good to merit consideration) that if the breach had not been committed, the contract would be awarded to it and the breach causes the bidder to lose that chance: Matra Communications SA v Home Office.”

In relation to the Model Answers I have found that there was a limited breach of the Regulations. However, I do not consider that Mears could establish any risk of loss arising from that breach. On the basis of Mr Small’s evidence, which I accept, even if the other tenderers had remained at their current scores and Mears had achieved scores of 10 in respect of all the questions where they complain about the Model Answers, not just the one aspect which I find was made out, Mears’ score would still not have achieved a score sufficient to place it in third place so as to pass through to the next stage. On that basis any chance which Mears might have had comes into realms of being fanciful and would not provide a route to the recovery of damages. There was therefore no risk of loss as Mears would not have been successful in proceeding to the ITCD stage.

In relation to the scoring guidance Mr Arden QC made the concession, to which I have already referred, in these terms: “For the purposes of this hearing, Leeds do not contend that Mears suffered no loss if it establishes a breach of the Regulations in respect of non-disclosure of the scoring guidance.”

So far as the Evaluation Table is concerned, that table when read with the reference in the scoring guidance to each question being given an equal score of 10, gave rise to the breach of the Regulations. On one view of the concession in relation to the scoring guidance, it would be sufficient for me to rely on LCC’s acceptance that, for the purpose of this hearing, Mears would on this basis suffer a risk of loss because of the loss of a chance of being one of the three tenderers who were selected to go through to the next round.

Even if that concession does not apply strictly to this breach then, on the current evidence, the fact that the weightings could have affected the preparation of the tenders means that whilst the extent of Mears’ chance of being successful cannot be finally determined, I must approach the matter on the basis set out above.

At this stage I consider that there is a real or significant, rather than a fanciful chance that Mears would have been successful given that Mears and the other tenderers were not provided with the weightings to be applied and with knowledge of the correct weightings the tenderers would have had the opportunity to concentrate on the answers to the questions which gave the greater share of the marks. Mr Small’s analysis for the questions where Mears complained about the Model Answers shows that Mears would have been able to narrow the gap but not sufficiently to achieve third place, just by taking account of those limited questions. That supports the view that, on the current evidence, there is more than a fanciful chance. Such a finding does not pre-determine what might be the outcome on a full analysis but is sufficient for me to decide that, in principle, Mears is entitled to relief under the Regulations.

As a result of the findings made above, Mears is entitled to the appropriate remedy for breach of Regulations 4(3)(b) and 30(3) to (5) in respect of the weighting for the answers in the Evaluation Table on the basis that Mears has suffered a risk of loss by not being included as one of the three successful tenderers who passed from the ITPD to the ITCD stage. As the contract in relation to which the breach occurred has not been entered into, Regulation 47(8)(b) provides that, without prejudice to any other powers, the court may:

“...if satisfied that a decision or action taken by a contracting authority was in breach of the duty owed in accordance with paragraph (1) or (2)-

(i)

order the setting aside of that decision or action or order the contracting authority to amend any document;

(ii)

award damages to an economic operator which has suffered loss or damage as a consequence of the breach; or

(iii)

do both of those things.”

In this case the possible remedies are therefore, first, to set aside the decision on which tenderers are to pass to the ITCD stage leading to LCC having to re-tender the ITPD stage with amended documents and, secondly, to award damages. It is evident that the court has a discretion as to the appropriate remedy and it is common ground between the parties and I accept that, in exercising that discretion I need to balance the public interest in LCC proceeding with the award of contract and the private interest to Mears of the harm of not having the chance to be included in the ITCD stage of the tender.

Some guidance on the relative importance of the two remedies can be derived from the decision in Case C-81/98 Alcatel Austria AG and others v Bundeministerium für Wissenschaft und Verkehr [1999] All ER (D) 1174 where, in answering a question referred for a preliminary ruling, the European Court said that:

“… Member states are required to ensure that the contracting authority’s decision prior to the conclusion of the contract as to the bidder in a tender procedure with which it will conclude the contract is in all cases open to review in a procedure whereby an applicant may have that decision set aside if the relevant conditions are met, notwithstanding the possibility, once the contract has been concluded, of obtaining an award of damages.”

As was stated by Coghlin J in the Northern Ireland High Court in Partenaire Limited v Department of Finance and Personnel [2007] NIQB 100 at [13]:

“On the other hand, it is important to bear in mind that the primary objective that the 1993 Regulations and Council Directive 92/50/EEC are intended to implement is the open and transparent award of public service contracts. Such open and transparent competition is not only in the interest of the applicant but also that of the general public. Indeed it seems to me that it might well be argued that the European jurisprudence reflected in the Remedies Directive as interpreted by the decisions such as Alcatel [1999] ECR 1-7671 intended injunctive relief to the primary remedy. After giving the matter careful consideration I am not persuaded, given the particular circumstances of this case, that damages would be an adequate remedy.”

In Severn Trent plc v Welsh Water (unreported, 10 October 2000) the claimant sought to prevent a contract being entered into on the basis that there had been a breach of the relevant procurement regulations. Langley J set out a number of features of the regulations and at pages 8 and 9 of the transcript said this about relief:

“I see nothing in the Regulation, nor in the Remedies Directive 92/13, which justifies the submission made by Mr Carr that the effectiveness of enforcement of the Regulations requires or supports a presumption in favour of the grant of restraining relief rather than confining a provider to a claim for damages. I think the factors with which the courts are familiar are material to what is expressed to be a general discretion as to whether to grant relief and if so to decide the appropriate relief to be granted. Those factors include delay, prejudice, the adequacy or otherwise of damages and the general policy considerations to which I have referred.”

As Buxton LJ said in R on the application of Cookson & Clegg v Ministry of Defence [2005] EWCA Civ 811 at [14] in relation to the then current regulation concerning relief:

“14.

Where the relief is sought in respect of breaches of the Regulations...the remedies will turn on the effect in English law, including therein the relevant Community law of Regulation 29(6). That is a question to be determined in the light of Alcatel. The court's duty is to interpret legislation purporting to transpose the Directive in the light of that Directive. That very familiar proposition is to be found not least in a case shown to us by Mr Béar, Case C-106/89 Marleasing, in which, to generalise somewhat the dispositif of the European Court, the court held that a national court hearing a case which falls within the scope of a Council Directive is required to interpret its national law in the light of the wording and the purpose of that Directive.”

On the basis of those decisions I consider that the court has a discretion as to the appropriate remedy. In a given case, in exercising that discretion, the court must pay regard to the need for the Regulations to be applied and to the availability for that purpose of the remedy to set aside the relevant action or decision, as well as the availability of damages. I do not consider that there is a presumption in favour of one remedy but rather the matter is a question of the exercise of discretion based on the facts and circumstances of a particular case. There is no doubt that an important remedy is injunctive relief in support of the Regulations but equally the availability of damages must be taken into account.

In this case, I have to balance the public interest in LCC proceeding with the award of the contract and the private interest to Mears of the harm of not having the chance to be included in the ITCD stage of the tender.

In my judgment the factors which have to be taken into account are these. First,LCC currently have no contractual arrangements in place from 1 April 2011 for capital improvement works for 37,000 houses or for repairs to 14,000 houses. Secondly, whilst LCC are now at a stage where they are in a position to sign a contract with the tenderer who was ultimately successful, on the evidence of Mr Rigby and Mr Statham which I accept, it would take a minimum of 9 months to the end of October 2011 to re-run the tender from ITPD stage to contract award. Thirdly, LCC currently has money available from central government and from its own funds which it wishes to commit in 2011/2012 to improve the housing for the benefit of the occupants of 37,000 houses and which would not be expended under interim arrangements for the provision of services although it would be available for later years. Fourthly, there are proper concerns that any such interim arrangements may be challenged for failing to comply with public procurement procedures. Fifthly those interim arrangements would be likely to be more costly and would not achieve the benefits of the Procurement.Sixthly, the lack of proper arrangements for the provision of services will be to the detriment of the occupants of the ALMO housing because the standards of housing currently achieved will be unlikely to be maintained. Seventhly, the award of damages would properly compensate Mears for the loss. In this context I adopt the statements of Akenhead J in European Dynamics v HM Treasury [2010] EuLR 397 at [23] that whilst damages may be difficult to assess and may not be a perfect remedy, they are an adequate remedy. Eighthly, the burden of the additional expense of such interim arrangements and of the Procurement will fall to be met by the council tax payers of Leeds. Ninthly, I take account that the remedy of setting aside LCC’s decision is available and this would then allow compliance with the Regulations. Finally, I bear in mind that, whilst damages would compensate Mears for the loss of a chance in the Procurement that would not put them in the position of being able to make use of that chance.

The remedy must be proportionate. There will obviously be cases at one end of the scale where the impact of the breach of the Regulations is so serious or obvious that it can only be met by setting aside a decision or action. At the other end of the scale there will be cases where the impact is less serious or obvious where damages will deal adequately with the breach. In between there will be many cases where the court must perform a balancing exercise of the various interests in deciding on the appropriate remedy.

In this case, I am clear that the overall balance favours awarding Mears the remedy of damages alone and not setting aside the Procurement. The prejudice in terms of the housing arrangements for a significant number of tenants and the delay in the provision of those arrangements weigh heavily against requiring the procurement process to start again. This is a case where Mears loss or risk of loss can be adequately compensated by damages and that provides a proportionate remedy.

For the reasons set out above my conclusions, in summary, are as follows:

I therefore award Mears damages to be assessed for the above breach of the Regulations.