The High Court of England and Wales has recently handed down two interesting procurement law judgments, each a helpful reminder of the importance of adhering to time limits, whether in the context of a live procurement process or a procurement challenge.
InHealth Intelligence Limited v NHS England [2023] EWHC (TCC)
In the first case NHS England procured Child Health Information Services. InHealth attempted to submit a tender but due to errors in the document uploading portal it missed the deadline for doing so. It challenged its resulting exclusion, arguing that it had been unlawfully prevented from participating in the procurement due to NHS England's refusal to accept its submission late.
The Invitation to Tender stated that “[t]he Contracting Authorities will not consider any tender response received after the stated deadline and failure to submit a response by the deadline will result in the exclusion of the bidder from participating any further in this procurement.”It also included a note stating that "[t]he e-tendering portal In-tend does not accept files with the same name".
The deadline for submission was noon. InHealth attempted to submit its bid at 11:49am. The file they were attempting to upload had the same name as another already uploaded and so the portal produced an error message (an issue that had been flagged to tenderers in advance). InHealth did not manage to resolve the issue before noon and NHS England subsequently excluded InHealth from the procurement process in accordance with the terms of the Invitation to Tender.
InHealth argued that: (1) the design of the portal was defective; and (2) the decision to exclude InHealth from the process was "manifestly flawed".
The Court rejected InHealth's challenge, noting that it "had failed to comply with the clearly stated deadline for reasons which were, unfortunately, its fault" and that "the consequences for failing to submit a compliant bid by the deadline were clearly spelt out and clearly understood". The Court also agreed with the NHS that a decision to waive the rules would likely have been a breach of its equality and transparency duties and that strictly applying the deadline, in circumstances where the failure to comply was squarely InHealth's fault, was well within the NHS's discretion.
This case serves to underline the importance, from a contracting authority's point of view, of outlining clearly the circumstances in which a tender may be excluded from the process in its Invitation to Tender, as well as identifying any technical constraints that apply to the tendering system (i.e. the 'same name' issue in this case). However, it is also a reminder that decisions to exclude late bidders, while typically supported by the ITT, have to be taken on a case-by-case basis.
As far as bidders are concerned, the key lesson is to ensure they begin the submission process in good time to deal with any issues. The Court noted that the problems InHealth's employees encountered in submitting their documents could have been easily remedied had they given themselves more time.
Altiatech Ltd v Birmingham City Council [2023] 2 WLUK 296
This case concerned time limits where litigation had already commenced. Birmingham City Council (the "Council") had awarded Altiatech a contract for the supply of cybertechnology. The Council subsequently ended the contract due to concerns about conflicts of interest (though this was not disclosed to Altiatech at the time) and awarded the contract to an alternative bidder.
On 19 October 2022, Altiatech issued a claim form against the Council which was deemed to be served on the Council on 26 October 2022. In the claim form, Altiatech sought a declaration of ineffectiveness which, if granted, would mean that the contract the Council awarded to the alternative bidder would be ineffective from the date on which the declaration was made. It also sought a financial penalty order.
Altiatech argued that the Council was in breach of its equal treatment and transparency obligations under procurement regulations, and specifically the Council's duty not to design a procurement with the intention of excluding or unduly disadvantaging certain bidders.
The Council, instead of lodging a defence, sought to have the case thrown out on two grounds.
- The claim form had been issued more than 30 days after Altiatech knew the basis for its claim (gained from letters of 14 September 2022) and it was therefore time barred
The Court held that the contents of the letters were not sufficient to allow Altiatech to form the view that it had grounds to bring a challenge and that it required further information to make this decision. In fact, it was not until further correspondence on 7 October that Altiatech had what it needed to bring a claim, and so Altiatech's challenge had been brought in time.
- Altiatech had served its particulars of claim late
The Council also argued that the particulars of claim (i.e. the more detailed statement of the challenger's case that follows the claim form) had been served late: they had to be served on the Council within seven days of service of the claim form but Altiatech had served them fifteen days late.
Altiatech accepted this was the case, and therefore asked the Court for a retroactive extension of the time limit to allow the case to progress to a full trial. It said the reason for the delay was that the solicitor responsible had misunderstood the rules applicable to service of particulars of claim, and also submitted that the fifteen day delay was not serious or significant (highlighting that the Council had not picked up on this argument until 23 December, even though the correct service date had been two months earlier).
The Court accepted each of these arguments. It acknowledged that while an error of law by a solicitor was generally not considered to amount to a good reason, it should be given at least some weight when considering all the circumstances – in particular since the relevant provisions were difficult to apply. Because they rely on an unusual combination of court rules and procurement rules, they frequently catch out those who are not procurement law specialists.
The Court decided that to refuse the orders sought by Altiatech would be "grossly disproportionate" because it would deprive Altiatech of a claim of some substance. The Court therefore agreed to retroactively extend the time limits for service of the particulars of claim, allowing the case to progress to a full trial. It also granted an order relieving Altiatech from any financial penalty as a consequence of serving its particulars of claim late.
Though the Court took a lenient approach here, it is a good reminder that deadlines for procurement challenges can be both particularly short and particularly difficult to navigate. The 30-day clock starts when the challenger "first knew or ought to have known that grounds for starting the proceedings had arisen". Complex claims can therefore feature different grounds each with a different 30-day clock, and if an authority only 'drip feeds' feedback to a bidder then there is more scope for the bidder to argue that they did not have the necessary full picture until later on.
It is also a good reminder of the importance of court deadlines and procedural rules – and of engaging the right specialist support as early as possible. We frequently bring procurement actions in courts in Scotland and in England and Wales, with different deadlines, different requirements and different procedures.
Just as with submitting a tender, the earlier you identify and seek support on a potential issue the less likely you are to miss something important. This of course includes what is usually the most time-critical aspect of any procurement challenge: the 10-day standstill period that follows on from the issuing of an authority's decision letter, within which litigation will usually have to be commenced if the challenger is to have any prospect of changing the award decision and securing the contract.
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.
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