Challenging the tender process: documents and disclosure
Over the past few years the majority of reported cases have tended to focus on two issues: changes made during the tender process without telling the tenderers, or cases where the contracting authority has judged tenders by reference to criteria which it had not disclosed.1 In 2010, as Jeremy Glover explains, a new issue came to the fore, namely documents and disclosure. What (possibly confidential) documents might the contracting authority have to provide to an aggrieved tenderer?
Questions about documents are frequently raised. What documents must be disclosed by a contracting authority? What limits are there on documents that discuss how bids were treated or evaluated? What documents are disgruntled tenderers entitled to see? What if the documents requested contain confidential information – confidential to other tenderers or information that is commercially sensitive to the contracting authority? Will a contracting authority be able to withhold documents on grounds of public interest immunity (“PII”)?
These issues have been discussed in a number of cases and not just cases brought under the Public Contracts Regulations 2006. These judgments are important because they help to clarify the extent to which documents relating to a contracting authority’s decision-making have to be disclosed. And in short, if a dispute does arise about a contract award procedure, the contracting authority should be aware that it may well be required to disclose a very broad range of documents relating to its internal decision-making process. Contracting authorities should also be aware that the PII defence is unlikely to assist in preventing the disclosure of internal documents. A good example is Amaryllis Ltd v HM Treasury (No. 2),2 a decision of Mr Justice Coulson following an application for disclosure and inspection of documents made in a claim brought by a furniture supplier against HM Treasury for an alleged breach of the public procurement rules.
Amaryllis Ltd v HM Treasury (No. 2)
Amaryllis maintained that HM Treasury (HMT) failed to deal with its first-stage tender in an equal, transparent and non-discriminatory way. Ultimately the claim for damages was said to be worth some £11 million. Close to trial, disputes arose about HMT’s disclosure. HMT had objected to disclosing a number of documents, including, pre-tender supplier meetings; pre-qualification development and evaluation documents; and the original version of the pre-qualification report (HMT having sent a redacted version to Amaryllis following a request for information made under the Freedom of Information Act).
HMT gave a number of reasons for refusing to produce the documents as follows:
“i) that inspection of the documents would damage the public interest. Disclosure of that information would seriously if not irreparably damage the reputation of the Defendant leading to a loss of confidence in the wider market place if information that the Defendant had received from other potential suppliers at the PQQ stage were to be released to a competitor;
ii) that the matters contained are highly commercially sensitive and confidential and to disclose them to a competitor would undermine not only the present procurement decision but also HM Government’s public procurement processes generally, all of which being clearly damaging to the public interest;
iii) that the documents are irrelevant to the litigation given the nature of the allegations as pleaded and/in the alternative the alleged breaches complained of by the Claimant are particular to its own circumstances so that the details of its competitors’ bids are also irrelevant to the claim.”
Disclosure under the Civil Procedure Rules (CPR)
In response to an application to CPR 31.12 seeking an order for disclosure, HMT issued a separate application for an order pursuant to CPR 31.19 that it be permitted to withhold inspection or disclosure of the documents because “disclosure would damage the public interest”. Whilst the focus of the arguments between the parties was on the public interest issue, Mr Justice Coulson began by looking at disclosure tests imposed by Part 31 of the CPR, namely relevance and proportionality. He noted that in the majority of procurement disputes arising out of the treatment or evaluation of one company’s tender, comparisons with at least some aspects of the tenders of other third party companies are almost inevitable. Here, some of the allegations in relation to timber sustainability and business activities raised a direct comparison issue. The Defence, too, raised issues about the comparison and evaluation of the tenders. Therefore, the other PQQs and HMT’s evaluation regime were prima facie relevant documents in these proceedings. The documents sought included:
(i) Documents previously provided in redacted form
These included the Marked Version of the Amaryllis PQQ. The Judge was in no doubt that this - a document evaluated by HMT, and from which the claim actually stemmed - was highly relevant and should be disclosed in unredacted form. The same was true of HMT’s PQQ Evaluation Report and PQQ Scoresheet.
(ii) The so-called Appendix B documents, which included:
- Pre-tender supply meetings: HMT had meetings with around 30 suppliers before the PQQ process commenced, although not with Amaryllis. Whilst some of the issues discussed at the meetings were irrelevant, those parts which were plainly relevant to the issues in this case should be disclosed.
- Pre-qualification evaluation: Amaryllis sought here the PQQs provided by the other suppliers, the notes prepared by the HMT team relating to Amaryllis’s PQQ and the PQQs of the other suppliers. In terms of relevance and proportionality, the PQQs of the other suppliers were said to be plainly disclosable documents, albeit that there remained questions about confidentiality. The same was true of the notes prepared by the members of HMT’s team. Amaryllis needed to know precisely how its own PQQ was evaluated and these notes might provide some insight into that process. However, the Judge doubted whether HMT’s evaluation notes relating to the PQQs of the other suppliers were of much (if any) relevance to this case. Further, he was firmly of the view, particularly in view of the lateness of this application, that it was not proportionate to require HMT to disclose them.
(iii) Other documents
The evaluation report of 12 March 2008 came with three attachments: the marking and weighting criteria spreadsheet; the evaluation results spreadsheet; and the project plan and timescales. As the report was plainly a relevant and disclosable document, so were the attachments. It was not, however, relevant to know precisely how percentages and weightings were calibrated in advance of the PQQ; what mattered were the percentages and weightings that were actually applied to Amaryllis’s tender and to the tenders of the other suppliers who completed the PQQ. In addition, HMT had “a product and supplier strategy” which contained “a high level view” of its aims. That was relevant.
Confidentiality and public interest immunity
The second issue the court had to consider was the question of public interest immunity (“PII”) and confidentiality. The general principle in the UK is that a litigant is not entitled to claim privilege for documents and information merely because they were supplied to him in confidence by a third party. Although there are exceptions to this principle, the only relevant exception in the present case, in the view of Mr Justice Coulson, appeared to be the alleged public interest in their non-disclosure.
The situation regarding PII was more complex. In 1996, the then Attorney General, Sir Nicholas Lyell QC announced that the process of claiming PII would involve three distinct steps. First a decision would be taken as to relevance. Only then would a decision be taken as to whether the document attracted PII. In doing this, one should ask whether disclosure of a particular document would cause real damage to the public interest. Third, if the document attracted PII, the decision-maker would need to undertake a balancing exercise between the public interest in non-disclosure and the public interest in the proper administration of justice and the need for a fair trial.
There was, in this case, no evidence that any senior official had considered these issue at all. This was of some concern to the Judge. Indeed, until the day before the hearing, HMT no application had been made to withhold disclosure of documents on PII grounds. Therefore, the Judge did not see how HMT could confirm, on the one hand, that they were committed to open government and compliance with Regulation 4(3) of the Public Contracts Regulations 2006, and then to assert, on the other, apparently without proper consideration, that it would cause real damage to the public interest if the public knew how this part of HMT had approached and performed such an important procurement task. The way in which HMT went about the evaluation exercise lay at the heart of this case. In those circumstances, it would be a truly exceptional case where there was some form of public interest in keeping secret any aspect of that internal evaluation process.
Further, the Judge noted that General Instruction 7 in the PQQ made plain that “any information submitted to [HMT] may be subject to disclosure in response to a request under the Freedom of Information Act”. Tenderers were asked to identify and explain (in broad terms) what harm may result from disclosure if a request is received, and the time period applicable to that sensitivity. Even then, HMT made it clear that they still may be required to disclose it. There was no evidence that any of the other suppliers had said that the information in question was confidential. Therefore the Judge ruled that:
“[a] mixture of redactions and substitutions will be more than sufficient to ensure that such confidential information as there might be is not unnecessarily disclosed, whilst at the same time ensuring that the Claimant is given sufficient information to make its full case by reference to all the relevant material.”
Conclusion
Typically in these types of case, the key issue is whether the tender process has been carried out in a fair and transparent way. This can only be ascertained if the evaluation process carried out by the contracting authority can be assessed and reviewed. In terms of Public Interest Immunity, this means that it is most unlikely (or in Mr Justice Coulson’s words “a truly exceptional case”) that there would be any public interest in keeping secret the internal evaluation process. Therefore public authorities should take care to remind everyone concerned in the tender process that internally generated documents are, more likely than not, going to be classed as “disclosable”.
However, parties should not forget that the usual starting point for the court will be the usual disclosure rules to be found in Part 31 of the CPR. The courts will, if asked, carry out a two-stage test. First they will look to see whether the documents requested are actually relevant to the dispute in issue. Is the disclosure and inspection necessary for disposing fairly of the proceedings? Here it is important that those making the requests, make them at an early stage in proceedings and draft their requests as tightly as possible, otherwise they may fall foul of the principles of proportionality. Second the courts will consider questions of confidentiality and also whether any special measures (i.e. limiting the class of people who can review the documents) should be adopted.
So, tenderers must be careful as it does appear that where disputes arise from complaints about the bidding process then a very broad range of documents and information could potentially be disclosable. Tenderers too should not assume that commercially sensitive information disclosed to the contracting authority will automatically benefit from confidentiality in the context of a legal dispute.