The end of proofs in procurement cases?
25 March 2013
Healthcare at Home Limited v The Common Services Agency  CSIH 22
This case was about the CSA’s on-going attempts to place the provision of health care at home to patients with breast cancer on a consistent nationwide basis. Currently, the pursuer enjoys the status of incumbent supplier under local agreements with individual NHS Boards: under these arrangements home care is not universally available to patients; and the use of multi-dose vials entails significant wastage. Accordingly, the CSA determined to put out to tender a new framework agreement for the compounding, dispensing and delivery to patients of Herceptin at home throughout Scotland.
Tenders were received and scored; BUPA won; the pursuer complained: this triggered the statutory moratorium on awarding the contract. Generally contracting authorities apply to lift such prohibitions, and in this they are usually, if not invariably, successful. However, this case proceeded to a full evidential hearing on the substance of the pursuers’ complaints, following which the Commercial Judge refused to set aside the CSA’s decision ( CSOH 75): reported in the News Archive on 9 May 2012). The pursuers reclaimed and in what is thought to be the first consideration of the new procurement legislation from the Appeal Court, the Inner House has now upheld the commercial court’s decision.
On appeal, the pursuer essentially renewed all its complaints at first instance, while throwing in two new ones for good measure. Such a “scatter-gun” approach is impossible to summarise in a short news item. However, it may be worth highlighting how the Inner House dealt with the obligation of “transparency”, and the standard of clarity which invitations to tender are required to attain.
The ECJ had ruled that ITTs should be formulated in such a way as to allow all reasonable well-informed and normally diligent tenderers to interpret them “in the same way” (SIAC Construction v County Council of Mayo  ECR I-7725). According to the pursuer, it followed that if views might differ among reasonably well-informed and diligent tenderers as to the meaning of a criterion, then there must have been a lack of clarity. They had sought to support this view at a lengthy proof with evidence from their own staff as well as with expert evidence.
In its single Opinion, the Inner House gives no encouragement to this approach whatsoever. Of the SIAC test it said, “It is doubtful whether any gloss or addition to these plain terms would advance any understanding of their meaning” (para 52). It was enough that the ITT was capable of being interpreted in the same way; it didn’t have to guarantee it. A pursuer couldn’t “prove” that an ITT was unclear by testifying that he didn’t understand it in the same way as the successful tenderer (para 56, 59). His views were of “marginal relevance” (para 60). The question of how the hypothetical reasonably well-informed tenderer would construe the ITT was an “objective” question and did not require the hearing of evidence from a person “offered up as a candidate for the role of reasonable tenderer" (para 60). Further, the ITT had provided in various places that responses should “include but not be limited to” various matters: such formulae were “entirely understandable” and did not require the consideration of “expert” tenderers (para 62).
Finally, the Inner House reminded us that “it is of considerable importance that decisions of the courts on the validity of a tendering process are taken with all due expedition. It is desirable that parties know, without delay, whether or not the contract is going to proceed. Unless there is a strong reason to suppose that it will cause injustice, such decisions ought to be capable of being taken in the absence of detailed oral testimony” (para 60).
Healthcare at Home v CSA was the first procurement challenge to go to proof before answer. Against the background of this robust decision from the Inner House, the question now must be whether it will be the last.
Alistair Clark QC and Sean Smith QC of Axiom represented The Common Services Agency.
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