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Mitigating the risk of procurement challenge – a step too far?

28/02/2017
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With procurement challenges on the rise, it’s good practice to consider mitigating strategies when planning and running a procurement. The case of Energy Solutions EU Limited v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC) is a cautionary tale of what can happen if the mitigating strategies are a step too far, and in this case, an overly defensive approach to evaluation of bids led ironically to challenge.

Background

The competitive dialogue procurement was undertaken by the Nuclear Decommissioning Authority (NDA) for the decommissioning of 12 former nuclear sites. The stakes were high – the successful bidder stood to earn approximately £100m whilst bid costs during the 4 year bid period stood at around £10m. Following evaluation the difference between the two bidders’ scores was 1.06%. Changes were made to the description of what would justify a score of “5-Excellent” and “3-Fair” in the evaluation criteria, after dialogue was closed, meaning there was no opportunity for the NDA to issue guidance on this point to Bidders. This and a number of other points led to Energy Solutions challenging the award of the contract.

A “defensive approach” to evaluation

The NDA was criticised by the judge for its “defensive approach” to evaluation:

  • On a number of occasions scores were changed after evaluation, with no reason or rationale for the change being recorded.
  • Evaluators were not allowed to write anything down at all when reviewing tender responses and were specifically asked to make notes only on the electronic “AWARD” system (the system to which scores were uploaded).

Comment

The lack of a clear and sensible explanation for scores challenged by a dissatisfied bidder could have been much more easily provided, had evaluators kept paper notes. Whilst the lack of documentation might have had the aim of deflecting challenge by restricting the amount of material available to be scrutinised by an unsuccessful bidder, it was directly at odds with the NDA’s duty to act in a transparent manner.


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