J Varney & Sons Waste Management Ltd v Hertfordshire County Council (Rev 1)

In a public procurement exercise, not every matter used to assess a tender is an award criterion requiring separate disclosure. The court must distinguish award criteria from sub-criteria. Sub-criteria may be weighted after the tender documents are issued if they were defined in advance and the decision does not alter the published criteria, introduce information that could have affected tender preparation, or create discrimination. Transparency protects equality and non-discrimination; it does not require disclosure of every subsidiary standard where those conditions are met. A broad definition of criterion as any standard by which a bid is assessed is too wide. On the facts, the return schedules were sub-criteria and their undisclosed weightings did not breach the Public Contracts Regulations 2006.

Varney unsuccessfully tendered for contracts to operate the Council’s household waste recycling centres. The Council used the restricted procedure and identified price and customer satisfaction as the award criteria. The tender documents contained return schedules addressing staffing, service standards and pricing.

Varney claimed damages under regulation 47(6), alleging that the Council had failed to disclose criteria, sub-criteria and weightings, had applied undisclosed or inconsistent criteria, and that the claim was brought within time under regulation 47(7). Flaux J dismissed the claim in a judgment reported at [2010] EWHC 1404 (QB). The appeal concerned whether the return schedules were award criteria or sub-criteria, whether their treatment breached equality and transparency obligations, and, if so, whether the claim was in time.

1. The appeal was dismissed unanimously. Stanley Burnton LJ delivered the judgment; Hooper and Rix LJJ agreed.
2. The Public Contracts Regulations 2006 implement Directive 2004/18. Regulation 4(3) requires equal, non-discriminatory and transparent treatment. Regulation 30 requires the award criteria and their weightings to be stated and applied consistently, but those obligations are directed to protecting equality and transparency.
3. Not every standard used to evaluate a tender is an award criterion. It may be a sub-criterion or sub-set of a published criterion. The court must determine the classification in context. The broad dictionary definition adopted in Letting International v Newham LBC [2008] EWHC 1583 (QB) was too general and wide.
4. The principles in ATI EAC v ACTV Venezia [2005] ECR I-10109 permit specific weighting of pre-defined subheadings where: the published criteria are not altered; no information is introduced which could have affected preparation of tenders; and the decision is not based on discriminatory matters. Those principles were reaffirmed in Evropaïki Dynamiki – Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v European Maritime Safety Agency (EMSA) (Case T‑70/05) and explained alongside Emm. G. Lianakis AE and others v Dimos Alexandroupolis and others [2008] ECR I-251.
5. The return schedules concerned aspects of customer satisfaction and price, and were therefore sub-criteria rather than separate award criteria. The information sought was disclosed in the invitation to tender. The trial judge’s findings that the undisclosed treatment could not have affected Varney’s tender or any other tender, and that there was no discriminatory effect, were unchallenged. There was no breach of regulation 30 or the transparency obligation. It was therefore unnecessary to decide the regulation 47(7) limitation issue.

• Court of Appeal (Civil Division) dismissed Varney’s appeal against the order dismissing its procurement claim.
• High Court of Justice, Queen’s Bench Division Flaux J dismissed the claim in the decision reported at [2010] EWHC 1404 (QB).