Public Procurement and Limitation

30-07-2012 14:55

In Turning Point Ltd v Norfolk County Council [2012] EWHC 2121 (TCC) (26 July 2012) Norfolk County Council (“the Council”) conducted a public procurement process related to a contract for various drug and alcohol treatment services. Turning Point Ltd (“TPL”) was interested in securing this contract and successfully pre-qualified for the tendering process. The tender process was governed by the Public Contract Regulations 2006 (as amended).

The Council produced an Invitation to Tender document to all tenderers dated 19 December 2011 that stated, inter alia, as follows:

“The Contract will be subject to the attached terms and conditions. No qualifications to these terms and conditions will be accepted…" 

TUPE information in respect of the employees of the Council’s existing providers was provided by the Council with the Invitation to Tender. The Invitation to Tender document stated, for example, that the successful tenderer was to be "wholly liable for all redundancy costs that the Provider incurs after any TUPE transfer, including any pension strain costs that may arise on redundancy." 

TPL therefore considered that this was a very important issue and was concerned internally during the tender period about the adequacy and completeness of the TUPE information given by the Council. These concerns were was not assuaged by the answers given by the council to TPL’s and other tenderers' questions seeking clarification about the information provided by the Council and ultimately resulted in TPL submitting a tender on 9 February 2012 with a note including as follows:

“Due to a lack of full and complete TUPE information, it is assumed that the restructure of staffing will be achieved through natural wastage and therefore we have assumed no redundancy costs. If redundancies were to occur, we would wish to enter into further discussions."

The TPL tender (at a price of £8,183,285) would have been successful but the Council considered that the note above was a “qualification” and therefore excluded TPL’s tender from the process, writing to confirm its decision on 12 March 2012. 

TPL brought its claim on 28 March 2012 arguing that the process conducted by the Council was in breach of the Public Contract Regulations 2006 (as amended). The Council replied asserting that the note above was a qualification or caveat or was otherwise not in compliance with the Invitation to Tender and that the proceedings were time limited as, pursuant to the Regulations, they should have been brought within 30 days of the date when TPL either did or should have become aware of the inadequacies (if any) in the tender information. TPL argued that its claim was not time limited as it had been brought within 30 days of the Council informing it that it had not succeeded in its tender and confirmed that this was due to the presence of the note.

The Court concluded that TPL was aware from January 2012 of the inadequacy and incompleteness of the TUPE and pensions information and knew that by the time of its tender submission on 9 February 2012 those complaints had not been remedied. TPL’s claim should have been commenced within 30 days of 9 February 2012 and was therefore time barred. The court concluded that there was insufficient cause to grant TPL an extension of time.

In any event, the court also concluded that TPL’s note was a qualification or at the very least a caveat and therefore evidenced non-compliance with the Invitation to Tender and gave the Council cause to exclude TPL’s tender from the process.

This case highlights the difficulties faced by parties tendering for public contracts when faced with a lack of sufficient information and therefore having to decide whether and if so when to commence proceedings to challenge the process.

If you would like any further information about this topic, please contact Philip Vickers.

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