A costly mistake
The High Court has ruled that a contracting authority did not act unreasonably when refusing to allow a bidder to correct a mistake in the tender and then rejecting the bid. Andrew Johnson examines the judgment.
In Hossacks (A Firm of Solicitors) v The Legal Services Commission [2011] EWHC 2700 (Admin) the High Court dismissed an application for judicial review of a tender process relating to legal services, after a mistake was made by a firm of solicitors in its tender to the Legal Services Commission.
The High Court held that the LSC had not acted unreasonably or disproportionately in rejecting the bid, having refused to allow the claimant to amend an error in its tender.
Facts of the case
In 2010 Hossacks, a firm of solicitors, submitted a tender to the LSC for a contract to provide publicly funded community care legal services. The tendering process divided England and Wales into a number of geographical areas with Hossacks tendering for each. In making its bids, Hossacks, rather than completing the same form numerous times, used a pro forma and as a result each form was headed with ‘Wiltshire’ as the area and information that they intended to open a part-time office in that location. Accordingly, when it came to submitting a bid for Northamptonshire, where Hossacks' sole office was situated, the erroneous information was given that the firm intended to have a part-time office there.
The LSC rejected all of Hossacks’ bids except that for Wiltshire, on the ground that Hossacks had not provided the information necessary to establish eligibility – but this contract was later cancelled when the true facts came to light. Hossacks subsequently obtained permission to pursue a judicial review claim in respect of the failed bid for Northamptonshire.
The judicial review claim was brought rather than a claim under the Public Contract Regulations 2006 (the Regulations), the Court of Appeal having earlier been persuaded that an application under the Regulations was not an appropriate alternative remedy particularly as it was at least arguable that it might have confined Hossacks to a remedy in damages. In hearing the subsequent judicial review application the Court commented: "the fact that there is an alternative remedy for damages for breach of the Public Contract Regulations...does not necessarily preclude recourse to judicial review where a public law issue arises...".
Judicial review
The High Court considered that it was reasonable and proportionate for the LSC to reject Hossacks’ bid for Northamptonshire. Hossacks had argued that a correction should be made to what was in reality only a trivial error and that such a correction would not prejudice other bidders, but the Court agreed with the LSC that the error was fundamental and the bid was ineligible. A tenderer was not in law able to improve a bid by supplying new information.
It was further not unreasonable or disproportionate for the LSC not to have sought to clarify the errors prior to awarding the tender. The process would have involved an entire restructuring of the bids, not clarifying an ambiguity.
Finally, the High Court determined that the LSC had not treated Hossacks unfairly in comparison to other tenderers who had made errors in their bids in similar competitions. The High Court noted that there was evidence to suggest that the LSC had sought bid clarification during other tendering processes, however, failure to meet the tender requirements had consistently been regarded by the LSC as a basis for rejection.
Comment
While sympathetic to the impact of its decision on Hossacks, a specialist firm committed to its clients, the High Court felt that, as in other cases where experienced lawyers have not been awarded contracts, it was not the Court's role to get involved in what was essentially a transparent and objective tender process – although fairness does play a part it is not the overriding consideration where there were bid terms to be followed.
The case thus operates as a reminder of the need for clarity and attention to detail when submitting a tender; judicial review will not serve to give bidders a second bite of the cherry where errors are fundamental.
Andrew Johnson is a director at Walker Morris. He can be contacted on 0113 283 2500 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it. . He regularly contributes articles and updates to reach…®, the free Walker Morris knowledge database and alerter service.
