Tell them a bedtime story: Public sector tendering

This claim is for £11m in compensation. No, no, not for a big contract that was performed late, not a final account for a contract that got all out of shape, not a project with a whopper of a defect, not a contract with a dumper-load of drama.

This claim is for doing nothing. There was never even a contract. Actually, there was a contract that went elsewhere but the party claiming the money didn’t even tender.

Ah, now we are getting to it. The claim for £11m is because the firm was not put on the tender list. And if the firm wins its case, that £11m-plus costs will come out of your pocket.

The European regulations for public procurement are trying to take footwork and favouritism, even patronage, out of the buying game. The system is prescriptive, cold, objective

It’s all to do with European law. It’s all to do with what my Auntie Nell calls “a bunch of clever clogs getting their knickers in a twist”. Rules have been invented in the EU for buying everything from buildings to bulldog clips; they’re called the Public Contracts Regulations 2006. Snag is, the rules are full of traps. There has been a string of cases where the bidding process has seemingly fallen foul of the fancy rules and contractors are suing for compensation.

This £11m story is another framework contract proposal; it’s not about construction, but the tale applies to our building world. The enterprise that is miffed enough to bring a claim to the High Court is called Amaryllis. It supplies masses of furniture to government departments and their many agencies. It also deals with the NHS. The firm had its beady eye on the EU’s Official Journal, where a notice appeared saying that the UK’s public sector body for buying things had a four-year framework contract going. Interested persons were asked to submit a pre-qualification questionnaire, or PQQ.

So, Amaryllis filled in the six parts of this PQQ. Three months later, HM Treasury wrote to tell it that it would not be invited to bid for lots one and six of the big framework, but that it could bid for the ones inbetween. The letter published Amaryllis’ “score”. It was 372, whatever that means. The cut was 388. Twelve other furniture suppliers passed muster. Amaryllis ranked 14th.

The Treasury tried to waffle in reply. There were ‘quite a lot of words but very little content’, said the judge

Here is a question for you: what would you do if you were shut out of the game by this margin? I bet you would say, “where did we lose the points?” Amaryllis certainly did. Seemingly, the Treasury replied with a load of waffle. (There were “quite a lot of words but very little content”, said the High Court judge when the case eventually reached him.) Amaryllis got fed up and replied that it wouldn’t bid for the other lots because it had lost confidence that any tender submission would be given a fair assessment. I bet you can think of a shorter and neater way of saying that.

So Amaryllis consulted its lawyers. The European regulations for public procurement are, in all fairness, trying to take footwork and favouritism, even patronage, out of the buying game. The system is prescriptive, cold, objective. Maybe that’s good. But look what’s happening now. Amaryllis thinks the whole shebang left the legal rails as soon as the tender list was compiled. The lawyers complain that the Treasury, by failing to publish the weighted scoring system, did not comply with the rules. It should also have explained the criteria and sub-criteria devised for evaluation. It should also have explained why Amaryllis lost points. So, if you are a public procurement officer, you must treat bidders as if they are seven year olds. Explain, explain. Explain why you want certain information. Then explain what you are going to do with it. For example, Amaryllis is angry that it lost points for sustainability because it bought in certain items instead of chopping trees down and making them itself.

So Amaryllis is suing for £11m. Presumably this is a calculation of what Amaryllis might have earned if it had got onto the panel of insiders. Remember, a framework deal is only a list of folk who might, might, get some business in the coming years. This is all about a loss of chance. We don’t know yet whether Amaryllis will get its compensation. It is presently wending its way to trial. We only know about now it because HM Treasury tried for a knock-out blow on a technicality. No chance, said the judge.

Credit: Simone Lia