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Council rejection of bungled electronic tender was fair, says High Court

Out-Law News | 14 May 2009 | 9:23 am | 3 min. read

A building firm which forgot to attach files to its electronic tender for work has failed in its attempt to force a local authority to consider its bid. The High Court has said that the local authority did not have to accept the mistaken tender.

Builder JB Leadbitter was one of 25 companies invited to tender to Devon County Council to become one of the companies that it might buy services from under a four-year framework agreement.

The tender process was, the Court said, detailed and complex. It involved a deadline for submissions of midday on 16 January 2009. By that time all tenders plus four case studies per company had to be submitted via the Council's specially set-up electronic tendering system.

The Council warned companies that the deadline was final, and that a company could only make one electronic submission of documents – it could not add to or amend a submission once made.

During the course of the trial, witnesses for Leadbitter admitted that the company had understood these conditions for the submission of tenders.

The County Solicitor told the Court that the conditions of submission were so strict in order to avoid collusion between Council employees and bidders. None could see any of the submission documents until after the deadline for all submissions, the Solicitor said.

On 16th January, though, the deadline was extended. One of the tendering firms told the Council that it had suffered a power cut. After confirming that with the electricity supplier involved, the Council extended the deadline to 3pm and told all the bidders of the extension at 11.13am.

By the time it received that email, Leadbitter had finished its tender. It took the opportunity to review it, though, and submitted it at 12.05pm. But the submission was uploaded to the Council's system without the four cases studies that Leadbitter had prepared.

A Leadbitter employee noticed that the case studies were missing from the tender at 2.45, just 15 minutes before the new submission deadline. Attempts to upload the studies to the tender portal failed, as the company had been warned they would.

The case studies were later emailed to the Council, which was asked to consider them, but the Council decided not to consider Leadbitter's tender.

Leadbitter sued the Council, claiming that it had broken its legal obligation to treat each tenderer equally when it made allowances for the other company's power failure and for alleged concessions made for a third tendering company.

That firm, Midas, contacted the Council saying that it was unsure it had made a correct submission. It was permitted to send paper back up documents in case it had not. In fact its submission was correct and the paper documents did not have to be relied upon.

Leadbitter said that in changing the supposedly-strict deadline for one company and in allowing a second to submit paper backups it showed them a leniency that it unfairly withheld from it.

The High Court disagreed. It said that the power failure was outside the control of the company concerned, and was not an error such as that made by Leadbitter. Also, said Mr Justice David Richards in the ruling, the deadline was extended for all companies and Leadbitter had taken advantage of that extension to have a last check of its submission.

Leadbitter said that if Midas was allowed to submit hard copy back-up documents, it should have been allowed to supply hard copies, but the judge said that it was unlikely that such hard copies could have been delivered in the 15 minutes between the company realising its mistake and the deadline.

Leadbitter said that it was discriminated against because a company that had made a mistake in its submission but had said nothing would have been given a chance to rectify it later, but Leadbitter was not because it alerted the Council to its mistake itself.

Mr Justice Richards rejected that argument. There was no reason to think that the Council would have accepted the tender regardless of whether Leadbitter pointed out its error or not. The tender did not contain a mistake; it was incomplete, which meant it was inadmissible, the ruling said.

"It was not open to any tenderer to supply missing case studies before the deadline," said the ruling. "They could not be supplied by uploading them on to the portal after submission of the tender, as the ITT [invitation to tender] made clear, because the system would not permit it nor was submission by fax or email permitted for security reasons nor did the ITT permit delivery of hard copy versions. These rules applied equally to all tenderers."

The Court ruled that the Council had not acted disproportionately in refusing to consider the tender

"Devon CC relies on the simple proposition that a procurement process requires a deadline for the submission of tenders and that a deadline is a deadline," said the ruling. "The ITT could not have been clearer on the requirement for a single upload and submission before the deadline, and the claimant's witnesses readily accepted that they knew this was the requirement."

"There may be circumstances where proportionality will, exceptionally, require the acceptance of the late submission of the whole or significant portions of a tender, most obviously where … it results from fault on the part of the procuring authority," said Mr Justice Richards. "But in general, even if there is discretion to accept late submissions, there is no requirement to do so, particularly where, as here, it results from a fault on the part of the tenderer."