Lowry Brothers Ltd & Anr v Northern Ireland Water Ltd

[2013] NIQB 23

Lowry challenged the outcome of a procurement exercise concerning the procurement of contracts as part of a framework consisting of five lots for the improvement of water and sewerage services in Northern Ireland. The PQQ described the selection process. Stage 1 entailed a pass/fail evaluation, based on the completed questionnaire. Stage 2 was to be a “detailed assessment” involving those who had successfully completed stage 1. The maximum anticipated number of applicants to be invited to engage in Stage 2 was 16 for each of Lots 2 and 4. The maximum anticipated number of applicants to be appointed to the framework, following both stages, was 8 in respect of each of Lots 2 and 4. Lowry passed Stage 1. The criteria for Stage 2 was weighted heavily in favour of resources and construction experience. Lowry was successful on Lot 4 but not Lot 2.

Lowry specifically complained about the scores allocated in respect of five questions. For these questions on Lot 4, it scored 20 points more than on Lot 2. Lowry said that this amounted to an unlawful disparity. There was no material distinction between the requirements for each lot, with the result that its substantially similar answers to the questions concerned should have attracted substantially the same marks. The Defendant said that whilst the expenditure that was anticipated under each of the multiple projects was similar, the nature of the work that was required to be undertaken was very different. Different lots required different services. Unlike Lot 2, Lot 4 did not require much in the way of M&E works. Any reasonably well-informed tenderer would have immediately appreciated that there were important distinctions between Lot 2 and Lot 4.

Judge McCloskey outlined the most important legal principles for the court to consider:

(i) A manifest error in the marking of a tenderer’s bid equates with a clearly demonstrated defect in assessment/evaluation.

(ii) The error must be material: defects belonging to a vacuum, with no material consequence, are not actionable.

(iii) By virtue of the principle of transparency, selection criteria must be disclosed in the published structure and rules of the contract procurement exercise and must not confer unrestricted choice on the contracting authority.

(iv) The professed knowledge and understanding of the tenderers are to be viewed through the prism of the hypothetical reasonably well informed-tenderer.

The Judge was clear that the Defendant was procuring a framework agreement. This meant that if Lowry were to succeed in its claim for an injunction, this would mean that the Defendant would have to suspend the entire framework. It was not the case that it could proceed with the four lots, which were not the subject of this case. There was a two-stage test for the court to consider. Did Lowry have a good arguable case and, on the balance of convenience, was it right to grant an injunction and halt the procurement process? As part of the second question, the court would need to ask whether damages would be an adequate remedy and what the demands of the public interest were.

A court will only disturb the decision of a contracting authority where there has been a manifest error. Here the Judge referred to detailed arguments developed on behalf of Lowry which involved a micro-analysis of the scores awarded. In doing so, the Judge came to the view that Lowry was not comparing like with like. Looking at the OJEU Notice and the more detailed PQQ, it was clear that there was a distinction between “non-infrastructure assets” and “infrastructure assets” which was further highlighted in the “design and build” characteristic of Lot 2, in contrast with the “build [only] feature of Lot 4”. This was, in the view of the Judge, a distinction of substance which meant that there was a distinction between the two lots in question. This manifest division clearly required differently tailored responses by bidders to questions which were common to Lot 2 and Lot 4. The same answer did not necessarily deserve the same score. Lowry’s claim therefore failed.

When it came to the balance of convenience, the Judge took into account that Lowry was prepared to offer an undertaking in damages that might occur as a result of the halting of the procurement process. However, the Judge also noted that whilst it might not be an easy exercise to assess any damages that may be awarded to Lowry, this did not mean that the damages would be inadequate. Further, the Judge felt that the public interest factor was the most important of the ingredients in the balance of convenience equation. The Defendant’s case was that there was a compelling public interest in completing this procurement exercise to enable badly needed water and waste water projects to be executed. In the view of the Judge, with each passing month, the damage to the public interest became increasingly visible and tangible. Again, this meant that Lowry’s claim failed.

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