Court confirms no right of correction for tender proposals after deadline

by Bryan Cave

On 19 October 2016, the Scottish Court of Session in the Renfrewshire Council case [ 2016 ] CSOH 150 CA 78/16 (Dem-Master Demolition Ltd V Renfrewshire Council as lead authority for Scotland Excel) confirmed that a contracting authority has no duty to allow a tendering party to correct errors after a tender deadline. The Court considered that equal treatment should take priority when handling tender errors, in accordance with obligations set out in the Public Contracts (Scotland) Regulations 2012 (2012/88).

The lesson from this ruling is that tenders need to be well prepared and should ensure that correct and comprehensive information, as requested in the tender, is supplied well ahead of deadlines so that there is ample time to correct clerical or other mistakes or omissions. Tenderers should not rely on a contracting authority’s discretion to allow clarification in the form the submission of new information after deadlines, however simple.

In this case, Renfrewshire Council (“the Council”) on behalf of Scotland Excel, invited tenders fora framework agreement for the provision of demolition services to Scottish public authorities. The services to be provided under the framework agreement were divided into three lots. On 14 April 2016, the deadline for the submission of tenders, the contractor Dem-Master Demolition Limited, submitted a tender via the portal in respect of the three lots. However on 12 May 2016, the Council informed the contractor that it had failed to provide a valid commercial offer for any of the three lots due to the fact that it had failed to provide percentage figures for overheads and profit under Lots 1 and 2 and had submitted a blank template for Lot 3.

The contractor immediately responded and provided the missing information. However, several days later the council notified the contractor that its tender would not be considered further.

Following this notification the contractor launched legal proceedings in which it argued that as its omissions were obvious and easily corrected, it should have been allowed to correct the mistakes.

In reply the Council argued that the requirements for all tenders were clearly set out in the tender documentation and these needed to be strictly complied with. These were not just formalities. The Council submitted that there was no general duty to allow corrections as it was not obvious what the contractor had intended to submit the information because no figures were submitted whatsoever.

The Court found for the Council, holding that there was no duty on the Council to give the contractor a chance to correct the errors made after the tender deadline. The reservation of a right in the tender documents to ‘clarify’ allowed the Council to resolve uncertainty, but not to seek late submission of information which should have been supplied before the deadline. The Court came to their decision, even though the section for the information that the tenderer had failed to provide was not marked with a red asterisk, the signifier of mandatory information on the web portal. The Court responded, siding with the Council, that there had been specific instructions in the tender process that failure to provide the information would lead to disqualification. So notwithstanding the lack of an asterisk, the claimant tenderer should have been well aware of the risk.

The Court observed that the claimant left itself no margin of error and submitted its tender on the deadline day.

So what are the implications for tenderers arising from this ruling? The Court was very clear that it would only allow the submission of missing information after tender submission deadlines in the most exceptional cases, and these exceptional circumstances did not include mistakes made by the tenderer, however simple and easily remedied.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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