Facts

In August this year, the High Court handed down judgment in Braceurself Limited v NHS England [2022] EWHC 1532 (TCC) which was a tender about the NHS's procuring orthodontic services. Our analysis of this judgment can be found here. In summary, the incumbent provider (Braceurself) lost the competition by a gap in points of a mere 2.25%, the equivalent of a single mark on one question. 

The Court found that the error in marking which resulted in the difference in points constituted a "manifest error" and that upon re-scoring, Braceurself should have been the successful bidder. 

There is a new update in this chapter, with a further judgment this week on whether the manifest error found in August was sufficiently serious to justify an award of damages. The seriousness of a breach gives rise to debate in many procurement cases, particularly where damages may be the only remedy left for a bidder if the automatic suspension has been lifted – either by consent or by order of the court. 

Here the Court considered that: 

1. although the breach had a powerful impact on the tender outcome, only one breach had occurred. 
2. the breach was minor, inadvertent, occurred in good faith and was the result of a misunderstanding by the NHS Trust involved.
3. the purpose of the score in question was actually to maximise access to orthodontic services for those who have a disability. 
4. the procurement as a whole was carefully planned and well executed. 
5. the impact on the Claimant was significant, but not existential (i.e. it would not risk the Claimant's solvency).
6. there was no material impact on the provision of the services in that area. 

The Court concluded that, in all those circumstances, despite the fact that the breach changed the outcome of the procurement, it was not sufficiently serious to justify an award of damages.

Comment

This Judgment provides helpful analysis in situations where a manifest error has occurred and summarises the factors that will be taken into account when deciding whether a breach will be "serious" and give rise to damages. 

The praise received by the NHS for its overall conduct in the procurement emphasises the need for awarding bodies to carefully plan, execute and document any tender process and confirms that the general approach to the competition process will be examined in detail, and be persuasive in any decision made by the Court. It also shows the value of clarification in any tender process, as the point about access for disabled service users could perhaps have been resolved with a careful clarification question and reply. Awarding bodies should not misinterpret the judgment as the Courts effectively absolving mistakes in evaluation providing they are made in good faith, as if a series of mistakes had been identified in the procurement and evaluation processes, the outcome may have been different.

Similarly, bidders should not be discouraged from challenging awarding bodies where irregularities with evaluation are identified; particularly as future judgments may take a different approach where awarding body errors have not led to a contract being awarded to the highest-scoring bidder. The case also highlights the need to provide as much clarity and detail in tender documentation to avoid a situation upon which, through no fault of the bidder, significant losses can be suffered simply from an honest mistake on the part of awarding body.

This judgment does strike a very different note to other procurement cases, and it may be that this decision is appealed. A breach which changes the outcome of a procurement is normally one which would be categorised as sufficiently serious, even if the breach itself is an isolated event. Rarely will a challenge be brought where there is substantial space between winning and losing bidders, so a change on a single score can be, and usually is, material.

If there was a breach of the procurement rules which was a 'manifest error', and that error meant the contract was accidentally awarded to the wrong bidder, then we do question whether the challenging bidder has had access to a viable remedy. If the contract has been signed already, as the suspension was lifted some time ago, then damages are the only remaining possible remedy for a bidder who has been deprived of a contract it should properly have been awarded. It may be that the factors the Court looked to listed above would be taken into consideration when looking at the amount of damages, but ordinarily damages would be accepted by the Court as a viable remedy for an aggrieved bidder in these circumstances. So low (or lower...) damages – rather than no damages. One to watch. 

If you are a public body in receipt of a procurement challenge, or a bidder who is considering challenging the outcome of a public procurement exercise, you should contact a member of our UK Public Procurement team to discuss your options and next steps.