Working on Wellbeing Ltd trading as Optima Health v Secretary of State for Work and Pensions & Ors

In a regulated procurement, a tenderer must comply with fundamental requirements stated in the tender documents. A contracting authority may reject a non-compliant bid where the documents, read as a whole, clearly permit that consequence to a reasonably well-informed and normally diligent tenderer.

Clarification is appropriate only where the error or ambiguity is apparent from the bid and can be resolved without changing its substantive content. It is not required where the intended price or term cannot be established objectively and clarification would create a real risk of changing the bid or undermining equal treatment.

In assessing whether to waive non-compliance, the authority may consider potential prejudice, equality between all tenderers, proportionality, responsibility for the error and the need for finality. Actual prejudice to another tenderer need not be proved.

The claimant was a supplier invited to compete for an occupational health and employee assistance services call-off contract under the RM6182 framework. Its revised pricing schedule exceeded framework maximum prices for three service lines. One other tender was also non-compliant, but PAM submitted the only compliant bid.

The defendants rejected the claimant’s bid and awarded the contract to PAM. The claimant challenged the decision, arguing that the tender documents did not clearly state that exceeding a framework price could result in exclusion, and that the defendants should have reduced the prices, sought clarification, waived the non-compliance or permitted resubmission.

The central issues were whether the consequences of exceeding the maximum prices were transparent and whether rejection, rather than an alternative course, was unlawful under the Public Contracts Regulations 2015.

1. The claim was dismissed. The defendants acted lawfully in excluding the claimant’s bid and awarding the contract to the only compliant tenderer.
2. The tender documents, read as a whole, clearly required compliance with the framework maximum prices. They also stated that bidders had to comply with the bid rules and gave the defendants a right to exclude a non-compliant bid. A reasonably well-informed and normally diligent tenderer would have understood that exceeding a maximum price could result in exclusion.
3. The reference to bids being “discounted” did not require reduction of an excessive line price. There was no contractual machinery identifying the price to which it should be reduced. In context, the natural meaning was that the non-compliant bid could be excluded. In any event, the general power to exclude non-compliant bids remained available.
4. The defendants had exercised a discretion. They considered resubmission, removal of the non-compliant items, reduction to framework prices, clarification and exclusion. They were entitled to reject the alternatives because they could disadvantage the compliant bidder, skew the evaluation or permit a change to the bid.
5. The claimant’s error was not an obvious error capable of simple clarification. The submitted figures were clear, but the intended replacement prices could have been anything between zero and the framework maximum. The intended prices were not apparent from the tender or other information available to the defendants.
6. Clarification which would first create an effective price for an item, or invite the claimant to identify a new price, would change the substance of the bid. Equal treatment and transparency therefore justified refusing clarification or resubmission.
7. The defendants were entitled to take account of the claimant’s responsibility for the errors, the possibility of call-offs despite zero indicative volumes, the potential effect on other tenderers, the risks of further challenge and the need to bring a prolonged procurement to an end. Actual prejudice to another bidder was unnecessary.
8. The decision was not irrational, arbitrary, unreasonable or manifestly disproportionate. The defendants had sufficient evidence and reasons to explain and defend the decision, and legal professional privilege did not justify an adverse inference.