A reminder of some basic procurement dos and don'ts for contracting authorities: the latest judgment in Bromcom

On 19 December 2022, England's Technology and Construction Court published its judgment in the case of Bromcom Computers Plc v United Learning Trust [2022] EWHC 3262 (TCC)

This decision follows the Court's preliminary decision of November 2021, in which it rejected ULT's assertions that Bromcom's claim had been brought out of time and allowed the action to proceed. We published a blog on this decision at the time, which can be found here.

The December 2022 judgment concerns the substantive breaches of procurement law alleged by Bromcom and is a reminder of some important points for contracting authorities.

Bromcom alleged multiple breaches of the Public Contracts Regulations 2015 in relation to the procurement of a contract to supply ULT with a cloud-based information management system for a number of schools.

The Court held that there had been several breaches of procurement law under four main headings.

• Scoring

The Court found that ULT had improperly added costs to Bromcom's bid during the evaluation process. In particular, ULT added £4,405 to Bromcom's data transfer costs on the basis that they had not been properly accounted for in Bromcom's pricing submission. The Court found that, in fact, these costs had been accurately calculated and ULT's addition was a manifest error by the evaluators and a breach of procurement law.

It also held that ULT had incorrectly calculated the bidders' scores. Rather than giving each bidder a single score out of five for each section (which would have been based on the evaluators scoring independently and then discussing their scores in a "moderation meeting" to reach an agreed score) ULT simply took the average of all of the evaluators' individual scores. Not only was this a breach of ULT's duty to act transparently (i.e. to do what it had said it would do), it also had the practical effect that outlying scores were not removed – as they would have been in moderation – and the court found this had inflated some bidders' scores. The lack of a discussion also meant that ULT was unable to explain how the scores had been reached.

• The Drop Box

The ITT asked each bidder to make their submissions by email alone. The winning bidder, however, sent an email containing a link to a "drop box" hosted by the winning bidder itself, from which ULT would be able download the winning bidder's submission. The winning bidder had round the clock access to this drop box, so ULT had no way of monitoring whether the bid was changed after the tender deadline.

While there was no evidence of changes, and the court agreed with ULT that there was nothing in the ITT precluding it, the court held that use of a drop box amounted to a breach of Regulation 22(16) of the PCRs which requires that when submitting bids, the methodology used must allow contracting authority to determine the exact time and date of receipt of the tender documentation.

• The Discount

Bromcom alleged that the winning bidder was seeking to "leverage its incumbency" by including in its price bid a rebate on a separate contract with ULT, which fell outside the scope of the procurement in question.

The Court agreed that such a rebate was contrary to procurement law because it rewarded the winning bidder for offering something which did not relate to the contract in question, in breach of rules on the award criteria that contracting authorities may apply, as set out in Regulation 67 (2) and (5) of the PCRs.

• Manifest Error

The Court looked at individual evaluators' scoring exercises, identifying several manifest errors – that is to say that the contracting authority just got its evaluation wrong.

Examples included:

• a miscalculation of the winning bidder's mobilisation costs, unduly inflating their score.
• a misunderstanding (by the evaluators) of what the invitation to tender required in each bidder's response to the "Meet Local Needs" part of the tender such that scores awarded were inaccurate.
• a misinterpretation of Bromcom's response to one question where the evaluator had incorrectly concluded that Bromcom could not meet ULT's requirements. The court concluded, however, that Bromcom were "plainly offering what the tender required".

Bromcom's claim was for damages only, and having identified the breaches set out above, the Court had to decide whether these breaches were "sufficiently serious" to merit an award of damages. The Court found that there had been several breaches, without which Bromcom would have won the contract "by some margin". On this basis, the Court concluded that the breaches were indeed "sufficiently serious" to merit a damages award.

Lessons for contracting authorities

The case is a useful reminder of some key rules for contracting authorities:

• Remember to stick to the process and criteria that you set out in the ITT – if you said you would have a moderation meeting of evaluators, have one.
• Remember to read submissions carefully and, if something is unclear, it may be more appropriate to ask clarification questions rather than to guess. That is particularly acute when adding costs that appear to be missing.
• Remember that award criteria must relate to the contract being awarded, and not to any other contract.
• Remember that the process must be transparent and proportionate and treat bidders equally.

With the substantive issues decided in favour of Bromcom, the litigation now proceeds to a trial on exactly how much it should receive by way of damages. This hearing is expected to take place later in 2023.

If you have any questions in relation to the above, or indeed in relation to procurement law more generally, please get in touch with Jamie Dunne, Charles Livingstone or your usual Brodies contact.