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The age of reason

New guidance has been given on what constitutes sufficient information when giving reasons to unsuccessful bidders, write Deborah Ramshaw and Julie Prior.

In September 2010, the General Court handed down judgments on three appeals by the same company (Evropaiki Dynamiki or “ED”) against its rejection from procurement procedures (see the end of this article for the case citation).

In each of the three appeals, ED challenged (among other things) on the basis that the contracting authority had failed to fulfil its obligations to provide an adequate statement of reasons for its decision. Giving reasons is an area where practice within contracting authorities differs significantly and where little practical guidance is available to assist contracting authorities in deciding on what level of information is adequate. As in one of the three appeals (ED appeal 2), the contracting authority’s decision to reject ED’s bid and to award the contract to the successful bidder was annulled on the basis that they had failed to fulfil its obligations to provide an adequate statement of reasons, it is clear how important to it is to get this right. In this article we look at some of the more important aspects of the ED appeals and set out some practical advice for contracting authorities when giving reasons.

Obligation under Regulation 32 to give reasons

Regulation 32 of the Public Contracts Regulations 2006 (“the Regulations”) requires that, as soon as possible after a contracting authority has made a decision to award a contract, the contracting authority sends a notice of its decision to the economic operators involved in the bid process who have not been successful. Where this notice is to be sent to an unsuccessful bidder (different provisions apply to “applicants” excluded prior to bid stage, such as those who failed to successfully pre-qualify), Regulation 32(2)(b) requires that the notice shall include:

“the reasons for the decision, including the characteristics and relative advantages of the successful bid, the score (if any) obtained by:

(i) the economic operator which is to receive the notice

(ii) the economic operator to be awarded the contract ...

... and anything required by paragraph 10”,

in terms of reasons why the economic operator did not meet the technical specifications.

OGC guidance

The OGC Guidance on the 2009 Amending Regulations paper published by the OGC in December 2009, highlighted some of the concerns expressed by stakeholders in relation to the clarity of the phrase “characteristics and relative advantages of the successful bid”. Stakeholders, presumably contracting authority stakeholders, were concerned about the exact information (including scoring information) that would need to be revealed in order to comply with this obligation. In particular, the OGC tries to address the following questions:

  • Should unsuccessful tenderers receive only their final scores and those of the winning bidder?
  • Should unsuccessful tenderers receive a more detailed breakdown according to each criterion and sub-criterion?
  • Are contracting authorities required to give a narrative of particular strengths of the winner’s bid?

OGC’s view was that in order to comply with this obligation, contracting authorities should release the full breakdown of scores against each criterion and sub-criterion, and support his with narrative explanation of why the winner scored more heavily in relevant  areas. OGC did not consider that contracting authorities should reveal particular features of the winning bid, but thought that tenderers should be given a helpful indication of ways that their bid could be improved in a sufficiently generic way so as not to compromise confidentiality or intellectual property. OGC also expressed its opinion that the explanation given to each tenderer would need to be bespoke as each tenderer is likely to have different characteristics. However, we are aware that some contracting authorities have found difficulty in meeting the administrative demands of providing bespoke reasons.

Important principles on giving reasons from ED appeals

Anyone regularly involved in evaluation would be well advised to read the judgments in the ED appeals, as they give some helpful practical guidance to supplement the OGC guidance on how best to comply with the obligation to give reasons. Of most note are the following:

Adequacy of information dependent on context

In ED Appeal 1, the claim related to the information provided to ED as an unsuccessful bidder in relation to two separate bids for two different lots. For Lot 1, ED failed to reach a preliminary minimum threshold and its bid was therefore rejected without a full bid evaluation taking place. By way of reasons for this decision, the contracting authority provided to ED:

  • The name of the successful bidder
  • The successful bidder’s qualitative scores/final ratios
  • Extracts of the evaluation committee’s report which provided justification for ED’s scores.

The Court found that the information provided was sufficient, given that ED’s bid had been eliminated for failure to meet the minimum threshold, and not following comparison with the other bids.

In contrast, the Court found that the information given to ED in relation to Lot 2 was not sufficient. Here, ED was told that its bid did not offer the best value for money (quality/price ratio) and was provided with:

  • The name of the successful bidder
  • The successful bidder’s qualitative scores/final ratios
  • Their own qualitative scores/final ratios
  • Extracts of the evaluation committee’s report which provided justification for ED’s scores.

The contracting authority relied solely on the scoring information to relate the characteristics and relative advantages of successful bidder’s bid to ED. This supports the OGC view that a narrative explanation is required in addition to scoring information, as here no further comment or explanation was given on the successful bidder’s bid. However, as ED had offered a price that was lower than that offered by the successful bidder, the assessment of quality against the quality assessment criteria was the deciding factor. Taking this into account, the Court found that the contracting authority had failed to fulfil its obligations to state reasons. It is unclear, however, if the Court would have come to the same conclusion if the successful bidder had been significantly less expensive than ED.

Importance of recording and sharing justification for marks

In ED Appeal 3 where ED again failed to meet the preliminary quality threshold, ED argued that the contracting authority had failed to provide sufficient reasons as its bid was not awarded the maximum number of points in respect of a number of award criteria and sub-criteria although no negative comment or justification was made. For example, one response was marked 3.5 out of 4 with comment “well described” with no explanation as to why the full four marks not been given. The Court took the view that it would not be possible for ED to challenge the contracting authority’s evaluation of these criteria “... owing to the laconic nature of the [contracting authority’s] comments.” The Court agreed that the statement of reasons in relation to a number of award criteria was insufficient, but that, for the main the reasons given were sufficient and that therefore the contracting authority’s decision to reject ED’s bid and to award the contract to the successful bidder was not invalidated. It was noted that even if ED had been awarded the full number of points available for the award criteria in respect of which the statement of reasons was inadequate, ED would still have failed to meet the preliminary quality threshold. This demonstrates the importance of keeping an audit trail of the evaluation process which records full reasons for the scores awarded.

Full disclosure of evaluation report not required

In each of the ED appeals, ED requested and was denied a full copy of the evaluation committee’s report. ED then cited this failure to share the evaluation committee’s report as one of the reasons why the contracting authority had failed to meet its obligation to provide reasons and had failed to comply with the principles of equal treatment and transparency. The Court did not agree and confirmed that the obligation to state reasons did not require the contracting authority to disclose this document. The Court noted that this obligation is limited to disclosing the characteristics and relative advantages of the successful bid.  It is not a duty to disclose any particular document. Contracting authorities should not, however, assume that their full evaluation report will not be publicly available as this document could, for example, be the subject of an information request under the Freedom of Information Act 2000.

Supplemental reasons given at a later date

In Appeal 3, ED were notified that they had not been successful on 20 June 2008 and asked for reasons that same day (Note: Under the amended Regulations reasons must now be given upfront by a contracting authority and not on request). On 25 June 2008, they received a table showing the points awarded in relation to the qualitative award criteria to them and to the successful bidder, together with comments on their own bid. ED complained that this was insufficiently reasoned on 1 July 2008, and on 24 July 2008, they received a document explaining how the evaluation panel had come to its conclusions. In some cases, the reasons given in the 24 July 2008 letter were considered to replace rather than supplement the original reasons (set out in the letters of 20 June 2008 and 25 June 2008).

The Court concluded that, for the purposes of determining whether the statement of reasons for the contested decision is sufficient, it may take into account the comments put forward in the letter of 24 July 2008, provided those comments only supplement and do not replace the original statement of reasons.

Practical advice on giving reasons

  • Give scores in relation to all criterion and sub-criterion
  • Do not rely on scores alone and provide a bespoke narrative for each bidder wherever possible
  • Give reasons on all areas of bid – not just the areas where the successful bidder performed better
  • Be careful not to give information which compromises confidentiality or intellectual property
  • Justify your scoring in your evaluation notes – if you haven’t given full marks for a good answer, explain why
  • Consider if a full statement of reasons is required if a bidder failed to meet a preliminary threshold
  • Remember there is no obligation to share all of your evaluation information eg reports of the evaluation panel (although your reports could potentially be required to be disclosed under a Freedom of Information Act request
  • Get it right first time – reasons given at a later date will only be taken into account if they do not conflict with original reasons.

Deborah Ramshaw is head of procurement and Julie Prior is a solicitor in the procurement team at Dickinson Dees. Deborah can be contacted on 0191 279 9836 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..

Case citation: Case T-63/06 Evropaiki Dynamiki – Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v Eurpoean Monitoring System for Drugs and Drug Addiction (“ED Appeal 1”) and Cases T-300/07 (“ED Appeal 2”) and T-387/08 Evropaiki Dynamiki – Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v European Commission.  (“ED Appeal 3”)