PLC Public Sector reports:
The Legal Services Commission has been facing considerable criticism about its public procurement activities for some time. This past week has seen some of the highlighted issues come to the boil. It seems as though the LSC will either need to take a few steps backward or risk becoming familiar with the inside of the Royal Courts of Justice.
This week, we look at the issues facing the LSC and consider what other contracting authorities can learn from the latest developments.
“Utterly absurd and totally irrational” …
Not the nicest description to receive from a High Court judge as you depart the office to head off into a traffic jam at the start of August Bank Holiday weekend. However, this is how Mr Justice Collins described the way that the LSC went about evaluating the bids made for its social welfare tender last week. The primary reason for this criticism was that the scoring system used by the LSC rewarded firms that took more appeals to the upper tribunal. This meant that firms (such as the claimant, the Community Law Partnership (CLP)) that had a high success rate at the lower tribunal were penalised for their efficiency.
While no transcript is available, reports suggest that the judge gave short shrift to an argument made on behalf of the LSC that the basis of the evaluation had been made clear some time ago and the time to challenge it had now passed. The judge noted that the LSC seemed to have been primarily concerned with “box ticking” and had lost sight of the need to ensure access to justice. The hearing was adjourned with the judge requesting that the LSC consider its position on the basis that, if the decision remained unchanged, he would expect a judicial review to succeed. He also apparently warned the LSC that:
“If you fight this and lose it, you could set a precedent”
A precedent for what you may ask? Obviously, it would impact on any other firms that felt that they had been similarly penalised for their success. Such challenges seem not only inevitable but imminent with news of a multi party action of 12 firms (and counting) alleging that:
“the selection and scoring criteria adopted [by the LSC] were arbitrary and irrational, and that the tendering process breached the Public Contracts Regulations 2006 in that is was discriminatory, lacked transparency and failed to accord equal treatment to the different firms and organisations which submitted bids.”
However, this is not where things end for the LSC, as the day after the CLP court hearing, the Law Society confirmed that it had formally commenced judicial review proceedings in respect of the LSC family tender process. The Law Society claims the LSC:
- Applied “unreasonable and unfair” criteria relating to caseworker’s panel membership.
- Breached its equality duties by failing to conduct a lawful impact assessment.
- Failed to comply with its statutory duty to secure access to justice (due to a drastic reduction in the number of successful firms).
At first glance these allegations appear to bear little relationship to the CLP claim, however, the allegation of box ticking can be inferred into the requirement for caseworkers to have panel membership. If the matter proceeds to court, the LSC will need to objectively justify the specific requirements that it has set out or risk facing further criticism.
The housing blog, Nearly Legal, also seems to have identified the basis for yet another challenge. It appears that at a late stage in the tender process the LSC has indicated that it may not hold tenderers to the levels of work that they have previously said they can deliver. As Nearly Legal speculate:
- There will surely be a legal challenge if this is the case.
- Any such challenge will have a significant chance of success.
So, all in all, there appears to be trouble ahead for the LSC. But what can other public authorities learn from these developments:
- Think your evaluation criteria through – Do they make sense? Do they achieve your goals? Are they necessary?
- Do not assume you can rely on case law finding that the three month limitation period for a procurement challenge will run from when tender documents are published, not when a contract award decision is made.
- Do not make changes late in a procurement process in favour of those bidders that have been successful if the change may have also benefited another bidder that has already been discounted.
- Do not forget to consider any applicable equalities legislation. Just because the government has decided not to introduce any specific duties for procurement does not mean that the overarching general duties do not apply. Challenges to all manner of decisions taken by public authorities are increasingly being made on equalities grounds (just ask George Osborne!) and it is likely that going forward it will be seen as a head of challenge to procurement decisions on a more regular basis.