Serco Ltd v Secretary of State For Defence

In procurement challenges, an unsuccessful tenderer should promptly receive essential information and documents showing how the evaluation was actually carried out, subject to proportionality and confidentiality. The court must assess an early specific-disclosure application on its individual merits. It should distinguish a credible challenge requiring further information from a fishing exercise designed to support a weak claim. Requests must be tightly drawn and focused on material demonstrating the evaluation process and reasons for the result. Where a public authority unreasonably delays disclosure of plainly essential evaluation records, the court may award the successful applicant its costs on the indemnity basis.

Serco challenged the Ministry of Defence procurement of fire and rescue services. The procurement was worth approximately £1.1 billion and was governed by the Defence and Security Public Contracts Regulations 2011. Serco sought specific disclosure of contemporaneous records showing the evaluation of its bid and the successful bid.

The Ministry substantially agreed to provide the requested documents shortly before the hearing. The remaining dispute concerned costs, including whether Serco should recover its costs on the indemnity basis. The court considered the proper approach to early disclosure in procurement proceedings and the consequences of the Ministry’s delay.

1. Specific disclosure. The application was substantially compromised by the Ministry’s agreement to provide the requested evaluation records. The documents were essential information and documentation relating to the evaluation process. They should have been provided promptly, rather than only after the application had been issued.
2. Applicable principles. The court applied the principles summarised by Coulson J in Roche Diagnostics Ltd v The Mid Yorkshire Hospitals NHS Trust [2013] EWHC 933 (TCC). An unsuccessful tenderer is in a uniquely difficult position because the reasons for its failure are principally within the public authority’s knowledge. Prompt disclosure is therefore generally appropriate, subject to proportionality and confidentiality. The court must nevertheless assess the application on its individual merits. It should distinguish a prima facie credible challenge from a fishing exercise, and the request must be tightly drawn and properly focused.
3. Application of the principles. The requested records demonstrated how the evaluation was actually performed and why Serco had lost. Serco had a prima facie credible challenge, and the disclosure sought was necessary and proportionate. The Ministry had failed to grapple with its disclosure obligations until an extraordinarily late stage.
4. Costs. The Ministry’s position that the costs should be costs in the case was rejected. Its failure to provide documents which it could not seriously contest Serco was entitled to receive made the application necessary. Serco was awarded £79,274.68 on summary assessment, payable on the indemnity basis. The court considered that the Ministry’s conduct fell well outside the norm and justified that order.