DWF's procurement challenge and the importance of clear evaluation criteria

Law firm DWF is preparing for a High Court battle with the Government following the award of one of six Insolvency Service contracts (a sub-division of the Department for Business, Innovation and Skills) across England, Wales and Scotland to one of its competitors. In July DWF stated that it hoped to continue working with the Insolvency Service after its procurement challenge had been resolved, though this is a case which has already found itself in the Court of Appeal following an accusation that the Government's evaluation process led to DWF being unfairly marked down. One of the points which came out in the Court of Appeal hearing involved DWF receiving a lower mark for its bid in England and Wales than for its bid in Scotland, despite having significantly more experience in England. 

The DWF case highlights the importance of making it clear to bidders how their final tenders will actually be assessed when determining the contract award (known as the evaluation criteria). 

It is worth pointing out here that the Pre-Qualification Stage of a procurement is an entirely separate stage and should only be used to narrow down the bidders who expressed an initial interest in the contract. After the European Court of Justice's decision in the Lianakis case, it is clear that the manner in which a bidder's economic and financial standing is tested at pre-qualification stage (known as the selection criteria) and the way in which a bidder's tender is assessed (via award criteria) should be completely separate. However, whilst this position is fine in principle, as the Procurement Regulations do not provide a comprehensive list of award criteria to consider before making a contract award, it can prove difficult to maintain the distinction between the award criteria used at the pre-qualification stage and the selection criteria used to identify the successful contractor. This inevitably leads to aggrieved bidders who feel their efforts have been unfairly assessed.

The Lettings case is another landmark decision of relevance here, and ensures that in the absence of any explanation to the contrary, a bidder must be awarded the maximum score for a particular section if they have met the stated requirements set out in the tender documentation.

Whilst the outcome of DWF's procurement challenge is awaited, the Insolvency Service contract awarded to one firm has been suspended. Suspending contract awards can be hugely costly to both parties, which again highlights the importance of having clear evaluation criteria. This not only ensures bids are fairly assessed in accordance with the Procurement Regulations, but will also go a significant way towards mitigating the risk of a future procurement challenge.

This article summarises complicated issues and should not be relied upon for legal advice. If you think you may be affected by any of the issues raised in this article please contact Jason Phelps, Partner and Head of Michelmores' Competition and Procurement team.