Procurement Update: High Court in Ireland upholds Awarding Authority Decision on Eligibility
In Sere Holdings Ltd v Health Service Executive Sere, which had ranked eighth in a tender process conducted by the HSE for emergency air ambulance services, alleged that the winning tenderer had not satisfied the eligibility requirement to have turnover of €4 million relating to the tender services.
The issue in dispute was what was included in the tender services under the terms of the Request for Tender and supporting documentation.
Sere contended that the tender services were restricted to a transfer involving a patient (with a medical team in specifically equipped aircraft). The HSE contended that the tender services also included the transfer by airplane of organs and organ retrieval teams. The Court agreed with the HSE for the reasons set out below.
The Court indicated that the relevant legal principles are in Gaswise v. Dublin City Council; Word Perfect Translation Services Ltd. v. The Minister for Public Expenditure and Reform; Sanofi Aventis Ireland Ltd. v. HSE; and Transcore v. The National Roads Authority. The task for the Court was not to approach the interpretation of the documentation from the perspective of a lawyer interpreting legislation but, instead, in the way in which all ‘reasonably well informed and normally diligent tenderer[s] – known as “RWIND tenderers” – who would be responding to the documents would ‘uniformly’ interpret them. The correct approach was to consider the terms of the documentation as a whole, rather than on the basis of one sentence or paragraph alone, with the guidance at paragraph 191 (second part) of Transcore being cited as relevant to selection criteria (in this case), as it had been to award criteria (in Transcore).
Reviewing the content of the tender documents, the Court found that all RWIND tenderers would uniformly interpret the transport of organs and organ retrieval teams to form part of the service required to be provided. The Court therefore agreed with the HSE’s interpretation of the ‘tender services’ with the consequence that the winning tenderer had satisfied the eligibility criteria. Sere’s challenge therefore failed.
One point remains outstanding: whether it is now a good use of court resources to deliver a judgment on a further issue advanced by Sere, namely whether the awarding authority verified that the successful tenderer satisfied the selection criteria. The Court has invited Sere to consider whether, in light of the above finding, the Court still needs to decide this issue.
In the same vein of the theme of careful use of public resources, the Court then took the opportunity to say that the State should, at least, consider mediation in every dispute in which it is involved, and that litigation should be the last resort for the resolution of disputes in all cases, and particularly in disputes involving State agencies. We look further at this in a separate briefing here.
While the procurement issue in this case engaged well-established principles, the judgment has wider significance as regards the comments on dispute resolution. In the case of procurement challenges, it is always prudent for the awarding authority to review the processes that led to the contract award decision in order to identify whether there was any indefensible error. Depending on the circumstances, it could be open to the awarding authority to rewind the procurement competition to a point at which the error can be rectified. However, if an awarding authority is confident in standing over its decision, it may be difficult to see what might be achieved in mediation, given that the likely remedy sought – quashing of the award decision – will not be possible without trammelling the winning tenderer’s legal entitlements.