A case on the duty to seek clarification of bids and the assessment of manifest error in evaluation has been finally resolved after a difficult procedural history seven years after being issued as a Judicial Review.
The claimant, Hersi & Co Solicitors, was a law firm which participated in a tender for panel firms to supply immigration and asylum and mental health work to the Legal Services Commission, the predecessor to the Legal Aid Agency in the London area. 127 of 218 bids were successful but the claimant was not.
The tender set out seven questions grouped under the heading 'Selection Criteria' and bidders were expected to answer all seven questions. The claimant answered the first three questions but left the responses to Questions 4 to 7 blank. The defendant did not award the claimant any marks for the latter four questions with the result that the claimant's tender failed.
The claimant argued that:
- the answers for the questions that were left blank were plain from the other parts of the claimant's tender and should have received marks as a result. This amounted to an argument that the scoring approach taken amounted to manifest error
- the defendant should have sought clarification from the claimant as to their answers in Questions 4 to 7.
The claimant also raised a wider argument in relation to equal treatment and sought to compare the defendant’s treatment of other tenders against its own.
In relation to manifest error the judge applied the established law, deriving from Lion Apparel Systems Limited v Firebuy Limited and concluded that there was no such manifest error in the circumstances. Similarly the arguments regarding equal treatment were not made out. More interestingly, the court reviewed the law on when there is a right and when there is a duty for an authority to seek clarification.
Scope of duty to seek clarification
There is an important distinction in clarification of bids between an authority's 'right' to clarify where it considers it appropriate to do so and a duty imposed on the authority to allow a bidder to correct its bid.
In principle, it is for bidders to comply with the requirements of tender documentation. Where they do not do so, the starting point is generally for the authority to assess only what has been provided. However, in some circumstances an authority may consider that it is right to clarify a bidder’s response. This can have the benefit of ensuring a suitable bid is not excluded on a technicality and proper competition for the award is available.
Authorities are not, however, always free to ask bidders to ‘clarify’ their bids in a manner which might allow a bidder to improve or change their bid after submission. To do so might create an unfair advantage for a bidder which had put in a weaker bid. Authorities can only ask for clarifications where the request is in full compliance with the principles of equal treatment and transparency (this is now included in s56 of the 2015 Public Contracts Regulations – although this case was decided on the former law).
The right to clarify is generally down to the exercise by the authority of its discretion regarding a bid. It will only be in limited circumstances where an authority is obliged to do so. Hence a dissatisfied bidder which wishes to claim that the authority should have taken steps to correct errors or ambiguities in the tender which that bidder submitted will have a high hurdle to satisfy.
This case reviewed the law on when the duty on an authority arises. In summary:
- A duty to seek clarification of a tender will arise only in “exceptional circumstances”, sometimes called “limited circumstances.”
- Such a duty may arise where a tender is “ambiguous”, but it will not do so in every case where a tender is ambiguous.
- It will only arise “where the terms of a tender itself and the surrounding circumstances known to [the contracting authority] indicate that the ambiguity probably has a simple explanation and is capable of being easily resolved”.
- Such a duty may also arise where there is a “simple clerical error” or “when it is clear that [the details of a tender] require mere clarification, or to correct obvious material errors”. This would appear to be the same as the “serious manifest error” referred to in Adia. It is not necessary for the error to be “clerical” (whatever that might mean) but it must be “simple”, “material”, “serious” and “manifest”.
- The duty will not arise where any amendment or clarification provided post-tender would “in reality lead to the submission of a new tender”. The contracting authority “cannot permit a tenderer generally to supply declarations and documents which will require to be sent in accordance with the tender specification and which were not sent…”.
Conclusion
Where a tender appears to have ambiguities or errors an authority needs to assess whether:
- Clarification of the tender is not permitted because to do so would necessarily allow the bidder a second attempt to improve its bid.
- A clarification could be drafted which would not allow the bidder to improve its bid but would allow the current bid to be understood better. If so (subject to (3) below) the authority needs to decide whether to exercise its discretion to allow such a clarification. Any clarification sought should be carefully drafted to ensure that the response will not amount to an opportunity to improve the bid.
- In the circumstances, it has a duty to seek clarification. This will only be in limited circumstances but may, as outlined in this case, arise where an error is obvious or an ambiguity is capable of simple or easy resolution.
Unsuccessful bidders will often consider whether the authority should have clarified any ‘clear’ error in their bids. Alternatively they may consider whether a clarification allowed to another bidder should not have been permitted as it allowed that competitor to improve its bid.
These can be fine lines and bidders and authorities are best advised to take particular care when ambiguities or ‘clear’ errors are found in bids.
For more information, please contact Ian Tucker or John Houlden.