Hossacks (A Firm of Solicitors), R (on the application of) v The Legal Services Commission

In competitive public procurement, clarification of a tender is exceptional. It may address an ambiguity or an obvious material error, but cannot reconstruct the bid, supply information wholly omitted, or permit a new tender. Where a tender is clear but fundamentally non-compliant, rejection may be reasonable and proportionate, and may be required by equality and transparency. A claim of unequal treatment requires identification of a comparable tender that was similarly defective but was changed and accepted.

The appellant, a specialist community-care solicitor based in Northamptonshire, submitted 125 bids for geographically based legal-services contracts. Most were rejected because the applications omitted required office information and were incompatible with the staffing requirements. The Administrative Court dismissed the judicial-review claim: [2011] EWHC 2700 (Admin). On a rolled-up hearing, the Court of Appeal considered whether the bids should have been accepted, whether the Commission should have sought clarification or amendment, and whether its treatment of other applicants breached equality obligations.

The Court of Appeal, in a judgment delivered by Stanley Burnton LJ with which Morgan J and Lloyd LJ agreed, refused permission to appeal because the proposed appeal had no real prospect of success.

1. Compliance without amendment. The tender was geographically based. A bidder had to undertake to maintain an office in each service area for which it sought a contract. The appellant’s 125 bids reflected a fundamental misunderstanding of that structure and were incompatible with the tender rules and her staffing capacity. The omission of the Northamptonshire office address and the inaccurate statement that a part-time office would be operated were material defects. Extraneous information known to the Commission could not supply information which the tender documents required the appellant to provide.
2. Clarification. The principles stated in Antwerpse Bouwwerken NV v European Commission (Case T-195/08) and SAG ELV Slovensko a.s. (Case C-599/10) permit exceptional clarification or correction of an obvious error, but not a substantive change or a new tender. The appellant needed to withdraw the defective bids and submit a new Northamptonshire application. That went beyond clarification, so the Commission was entitled, and in the circumstances bound, to reject the bid.
3. Equality. Equal treatment requires comparable tenderers to be treated alike unless objectively justified, as stated in Fabricom SA v Belgium (Joined Cases C-21/03 and C-34/03). The examples relied on were not comparable: no similarly defective tender had been changed and then accepted as compliant. The scale of the tender exercise was not necessary to the decision.
4. Costs. The appellant was ordered to pay the respondent’s costs on the standard basis, subject to equitable allocation of disclosure costs among the proceedings to which they related.

1. Court of Appeal (Civil Division): Following a rolled-up hearing, refused permission to appeal and ordered the appellant to pay the respondent’s costs on the standard basis.
2. High Court of Justice, Queen’s Bench Division, Administrative Court: After permission to apply for judicial review was granted by the Court of Appeal, Blake J dismissed the substantive claim: [2011] EWHC 2700 (Admin) .