Transparency: A New Religion Anna-Marie Curran, Partner, A&L Goodbody Institute for Competition & Procurement Studies Bangor University 29 March 2012

Outline What does transparency require? Focus on transparency in evaluations What can be evaluated? Formulation, interpretation & application of award criteria What must be published Focus on national case law

What does transparency require? Advertisement “[transparency] consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to enable the services market to be opened up to competition and the impartiality of the procedures to be reviewed” Case C-324/98 – Telaustria, para 62 Competition? “it is for the …court to satisfy itself that the award of the concession… complies with transparency requirements which, without necessarily implying an obligation to hold an invitation to tender, are… such as to ensure that an undertaking located in [another Member State] can have access to appropriate information regarding that concession before it is awarded, so that, if that undertaking had so wished, it would have been in a position to express its interest” Case C-231/03 – Coname, para 21

What does transparency require? Description of subject-matter and disclosure of criteria “[the principle of equal treatment of service providers, laid down in. . . the Directive, and the principle of transparency which flows from it . . . require the subject matter of each contract and the criteria governing its award to be clearly defined” Case C-340/02 – Comm. V. France, para 34 Duty to give reasons “the principle of transparency which informs every public procurement procedure requires that particular care is taken, when a candidate’s tender is rejected, with the statement of reasons” Case T-59/05 – Evropaiki Dynamik, para 134

Evaluation Process Breach of transparency in the conduct of the evaluation process is one of the most common grounds for challenges in national courts Why? The Review Period – i.e. application to court must be made within 30 calendar days after the applicant was notified of the decision, or knew or ought to have known of the alleged infringement alleged Tenderer will only become aware of the alleged infringement at the date of the notification of decision (or afterwards)

What can be evaluated? Lowest price or most economically advantageous tender MEAT criteria must be linked to the subject matter of the contract Weightings for award criteria must be specified Experience is not a valid award criteria - Lianakis v. Dimos [2008] ECR I-251 Cornerstone of the evaluation is the award criteria and most common ground for challenge

Common grounds of challenge Award criteria were not applied in the manner set out in the tender documentation Undisclosed award criteria or sub-criteria were assessed Undisclosed weightings were applied Information was taken into account that was not disclosed in the tender documentation Bidder information was evaluated under the award criteria

Award criteria Award criteria have to be clear and precise - SIAC v Mayo CC (C-19/00), [2001] ECR I-7725 From Tenderers’ perspective - Equal treatment and transparency require award criteria to be formulated “in such a way as to allow all reasonably well-informed and normally diligent tenderers to interpret them in the same way” From Contracting Authority’s perspective - Transparency principle requires contracting authority to “interpret the award criteria in the same way throughout the entire procedure” In the Assessment - When tenders are being assessed, “the award criteria must be applied objectively and uniformly to all tenderers”

Standard of Review SIAC test How would a reasonably, well informed and normally diligent tenderer have interpreted the criteria/tender documentation? ATI test (ATI EAC v ACTV Venezia (C-331/04) [2005] ECR I-10109) Do the sub-criteria or weightings alter the published criteria? Would the disclosure of the sub-criteria or weightings have affected the preparation of the tender? Are the sub-criteria or weightings likely to give rise to discrimination against one of the tenderers?

SIAC Test The hypothetical reasonably well-informed and normally diligent tenderer “..some insight into the characteristics and attributes of such a tenderer: well, but not necessarily fully, informed and usually careful and attentive, but not invariably a paragon of diligence… a tenderer who may be vulnerable to a certain (though not excessive) degree of error, inattention and other human weakness… the Siac hypothetical tenderer is a terrestrial, rather than celestial, being, hailing from earth and not heaven... the court should approach the matter not as an exercise in statutory construction or as one involving the interpretation of a deed or contract or other legal instrument. To adopt such an approach would not, in my view, be consonant with the Siac test. Rather, the court’s attention must focus very much on the “industry” concerned, in which the professionals and practitioners are not lawyers.“ McCloskey J, William Clinton, T/A Oriel Training Services v. Dept for Employment and Learning [2012] NIQB 2, (24 January 2012)

ATI Test Applicant must show that new criteria or weightings would have breached the ATI principles:- “… the applicant, by merely referring generically to the fact that the contracting authority subdivided a criterion into two sub-criteria, has not shown that the decision of the contracting authority to make such a division led to an alteration of the contract award criteria previously defined in the tender documents, or that it contained elements which could have affected the preparation of the tenders, or that it gave rise to discrimination against the applicant or one of the tenderers.” - Evropaiki Dynamiki v EMSA (Case T-70/05) Court of Justice on appeal agreed with the General Court:- “it must be considered that an evaluation committee must be able to have some leeway in carrying out its task. Accordingly, it may, without amending the contract award criteria set out in the contract documents or the contract notice, structure its own work of examining and analysing the submitted tenders.” Evropaiki Dynamiki v EMSA (Case C-252/10)

Mears Ltd. V. Leeds City Council, UK High Court, 21 April 2011 Award Criteria Mears Ltd. V. Leeds City Council, UK High Court, 21 April 2011 Tender competition for capital improvement, refurbishment and maintenance for social housing in Leeds using a competitive dialogue process (value of £420m) Award criteria – Price (60%)/Quality (40%) Quality assessed by reference to 8 criteria (each weighted) and responses to questions posed under each criteria – questions were not weighted Leeds developed internal scoring guidance and model answers which were not disclosed to bidders (note the guidance suggested that full marks should only be awarded to bids which showed innovation or exceeded the specification) Mears claimed that the questions constituted criteria and should have been weighted, that the model answers constituted criteria and that the internal guidance should have been disclosed

Mears Ltd. V. Leeds City Council, UK High Court, 21 April 2011 Award Criteria Mears Ltd. V. Leeds City Council, UK High Court, 21 April 2011 Court summarised the principles applicable to disclosure (para. 122):- CA must disclose those award criteria or sub-criteria which it intends to apply to the award. CA is obliged to disclose any rules for the relative weighting of the selection criteria CA could attach specific undisclosed weight to sub-criteria by dividing among those sub-criteria the points awarded to a particular criterion if that weighting: does not alter the criteria set out in the contract documents or the contract notice; does not contain elements which, if they had been known at the time the tenders were prepared, could have affected that preparation; was not adopted on the basis of matters likely to give rise to discrimination

Mears Ltd. V. Leeds City Council, UK High Court, 21 April 2011 Award Criteria Mears Ltd. V. Leeds City Council, UK High Court, 21 April 2011 There is a distinction between award criteria which are aimed at identifying the tender which is economically the most advantageous and criteria linked to the evaluation of the tenderers' ability to perform the contract in question. There is a level of assessment below the criteria, sub-criteria and weightings which the CA may use in evaluating the award criteria which it does not have to disclose because: it does not, on a reasonable view, introduce different or new criteria, sub-criteria or weightings (this aspect must be considered in the light of what would be reasonably foreseeable to a reasonably well-informed and normally diligent tenderer); it could not have affected the tenders; and it is not a matter aimed at identifying the most economically advantageous tender but instead is linked to the evaluation of the tenderers’ ability to perform the contract in question.

Mears Ltd. V. Leeds City Council, UK High Court, 21 April 2011 Award Criteria Mears Ltd. V. Leeds City Council, UK High Court, 21 April 2011 Court held that:- the unweighted questions amounted to sub-criteria & should have been weighted as bidders may have prepared bids differently had they understood the relative importance of each question the internal scoring guidance was guidance only and although it suggested that innovative bids might score top marks, it was not impossible to score full marks without innovation. It did not need to be disclosed (note that Court appeared to be influenced by the fact that this was a competitive dialogue process where innovated solutions would have been expected) Two of the model answers amounted to undisclosed award criteria and should have been disclosed. There was no requirement to disclose the other model answers as they were guidance Court found that there was a real or significant likelihood that Mears would have succeeded in the procedure if proper disclosure Remedy - damages rather than set-aside

Release Speech Therapy v. HSE Challenge to the Health Service Executive’s failure to award a framework agreement for speech and language therapy services for children aged 0-5 years. Only one bid received and this tender offered group therapy services only Applicant argued that it was not clear from the tender documents that ‘group therapy only’ service providers would be automatically disqualified Court considered that the standard for reviewing the tender documents was that of a “reasonable and intelligent speech therapist provider”. HSE’s expert stated that the tender requirements clearly specified that a range of services were required to treat all children. Group therapy services only did not meet this requirement.

Release Speech Therapy v. HSE Tenderer had also stated at interview that its refusal to provide individual therapy services was “non-negotiable” Fact that the contract involved a framework agreement did not address the situation that there was only one tenderer and there was no other tenderer who could complement the tenderer’s services No breach of the principle of transparency as in circumstances where:- “a reasonably well informed and normally diligent tenderer would have understood that it was a requirement that the tenderer should be in a position to provide both group and individual therapy to qualify for the contract.... the interview gave the applicant the opportunity to expand the services.. but it declined to amend its application” Even if the applicant correct on its interpretation of the tender docs, it would not have had a significant effect on its preparation of its tender

What must be published? Sub-criteria and sub-weightings Scoring methodologies Scoring systems Tender Returns Model Answers BUT only to the extent that these contain elements which could have affected the preparation of the tenders…

Transparency obligations Timing – have the criteria, sub-criteria, lack of weightings etc. being alluded to in the tender documents? – if so, time for challenge is limited (30 days from date of publication (i.e. when complainant knew or ought to have known) unless good reason for extending time) Complainant is more likely to be successful if CA takes into account a criterion that is not alluded to in the tender documents Complainant will need to be able to clearly demonstrate how its tender could have differed if criteria, weightings etc. had been disclosed Disclosure obligations are likely to be the same for Annex IIB contracts or contracts which have a cross-border interest Below threshold contracts – administrative law principles at play – is it reasonable not to disclose? Prudent to err on the side of caution – if in doubt, disclose

Transparency: A New Religion Anna-Marie Curran, Partner, A&L Goodbody Institute for Competition & Procurement Studies Bangor University 29 March 2012