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Civil engineering company Northstone was one of a number of operators in competition for a total of eight road resurfacing contracts in Northern Ireland. The eight separate contracts, with a total estimated annual value of up to £52 million, were dealt with under a single procurement competition tendering process, carried out in 2015 by the Department for Infrastructure, (formerly known as the Department for Regional Development – DRD). The challenge by Northstone focused on the Department’s handling and determination of the competitive tender process and in particular the process which was conducted with one bidder, John McQuillan (Contracts) Limited (McQuillans).
The tender criteria meant that price was weighted at 70% and quality 30% and all bidders were ranked accordingly. Northstone was ranked first in one of the eight contracts it tendered for, coming second or third in all the rest. The Department ranked six of McQuillan’s tenders first before entering into private negotiations with the company which culminated in the firm withdrawing two of its bids and then being awarded four of the eight contracts. Northstone challenged the handling of the tendering competition and in July 2020 a High Court judge held that the Department had wrongly given high marks for contracts for which McQuillans did not have the necessary resources. He also identified a lack of transparency, unequal treatment and breach of the principle of non-discrimination in the circumstances whereby that company was able to select which contracts it would deploy its resources to.
In the Court of Appeal, Lord Justice McCloskey upheld the conclusion that the post-tender evaluation and scoring interaction with the operator ranked first for six contract bids, along with resulting award decisions, breached the relevant procurement legislation and that the Department had “engaged in a secret, bilateral and unrecorded process with one of multiple bidders”, and “in consequence, the level playing field was distorted for other bidders.” He further assessed that “to design and operate this competition in such a way as to rank first six contract bids from an operator who had the resources to perform only four contracts at most defies common sense and commercial reality”.
The appeal by the Department for Infrastructure was dismissed.
The judgment can be found here.
Michael Bowsher QC and Richard Coghlin QC, instructed by Declan Magee of Carson McDowell LLP, acted for Northstone.