Procurement in a Nutshell: Court emphasises the importance of complete and diligent note taking

The judgment is a particularly useful reminder to Contracting Authorities of the importance of taking proper and contemporaneous notes and ensuring that there is a clear audit trail detailing the rationale for any decisions made.

The case

The dispute concerned Lancashire County Council (the “Defendant”) and its decision not to award a contract relating to the provision of public health and nursing services (the “Contract”) to two local NHS Foundation Trusts (the “Claimants”) who were the incumbent providers of the services.

In challenging this decision, the Claimants alleged that the Defendant:

• Failed to provide sufficient reasoning explaining its evaluation;
• Failed to apply the correct scoring methodology; and
• Made manifest errors breaching the principles of procurement law.

The judgment

As stated above, Mr Justice Stuart-Smith’s judgment is useful in providing a reminder to Contracting Authorities of the correct procedures that should take place when carrying out procurement processes.

Did the Defendant provide sufficient reasoning explaining its evaluation of the bids?
Upon consideration, the Court held that the Defendant failed to provide sufficient reasoning as to how it arrived at its scoring decisions.

In particular, the Court was critical of the technique employed whereby each evaluator completed a score sheet before submitting their scores at a moderation meeting in which they commented on each tenderer’s answer and attempted to reach a consensus on the score for the question under discussion.

In criticising this approach, Mr Justice Stuart-Smith explained:

“although the panel reached consensus on scores, there was not necessarily or even probably congruity of reasoning that led each evaluator to subscribe to the consensus score for the question.  It is also clear that the moderated discussion had the result that the evaluators might be persuaded to change their minds on particular points so that, for example, a point that they had felt to be influential when carrying out their original evaluation became less influential… it means that the evaluators’ original score sheets are not a reliable guide to the reasons that ultimately caused the group to reach their consensus scores.”

In this regard, the judge stated:

“I am satisfied that [the records] do not provide a full or accurate account of the reasons or reasoning that led either individual panel members or the panel as a whole to reach the consensus scores that were reached.”

On this basis, it is clear that when conducting procurement processes it is essential that Contracting Authorities maintain accurate and thorough records explaining the rationale behind how scores are determined.  Furthermore, the Court upheld previous case law finding that there must be an adequate statement of reasons to allow a bidder, and a court, to understand why a particular score has been awarded.

Did the Defendant fail to apply the correct scoring methodology?
Despite dismissing this ground of claim and finding that the Defendant correctly applied the scoring criteria, the Court once again questioned the manner in which the Defendant recorded how it approached aspects complying with the required criteria and methodology.

Again, this serves as a pertinent reminder to Contracting Authorities that they should accurately document all aspects of a procurement process so that it can be shown at a later date that the correct levels of compliance occurred. Such practice is an effective technique in dealing with any challenges that may arise at a later date.

Did the Defendant make manifest errors breaching the principles of procurement law?
With regard to this final issue, the Court emphasised the principle that its function is not to “carry out its own re-marking exercise for both tenders to give a reliable answer on materiality overall”.

However, Mr Justice Stuart-Smith emphatically stated:

“a procurement in which the Contracting Authority cannot explain why it awarded the scores which it did fails the most basic standard of transparency.”

Why is this important?

This case highlights the importance of ensuring there is full, comprehensive and diligent notes taken at the evaluation and moderation stages of procurement procedures.  Evaluators must explain their scores for bids properly and ensure they consistently apply award criteria clarifying where, why and how decisions have been made.

How can I find out more?

If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.