Optima v DWP: significant TCC judgment on disqualification of non-compliant bids

05 Apr 2024

The Technology and Construction Court (Freedman J) has today handed down a significant judgment in a procurement dispute, dismissing a challenge to the exclusion of a tender for non-compliance following an expedited trial.

The claimant (Optima Health) had tendered for a call-off contract under a framework agreement to provide occupational health and employee assistance programme services to the Department for Work and Pensions. Under the framework agreement, suppliers could not charge prices in excess of framework prices for any call-off contract. Optima submitted a pricing schedule in which a small number of items were in excess of the framework prices. DWP considered Optima’s tender to be non-compliant and excluded it from the competition, although it had the highest score on quality and would (but for its non-compliant prices) have been the winning bidder.

Optima alleged that the pricing schedule contained obvious clerical errors and that its disqualification was in breach of the principles of transparency and equal treatment and/or disproportionate. At trial, the Court was asked to determine: (i) whether the tender documentation clearly and transparently set out the consequence of exceeding framework prices (ii) if the tender documents were clear and DWP therefore had a discretion, whether it had acted unlawfully by excluding Optima rather than taking alternative action, such as reducing the prices to the maximum framework prices, waiving the non-compliances, or seeking clarification.

The Court found against Optima on both grounds, holding that (i) it was clear from the tender documentation (understood in its commercial context) that bids with prices in excess of framework prices would or might be excluded and (ii) DWP had lawfully excluded Optima from the competition.

The judgment contains an in-depth consideration of the relevant case law along with a detailed application of the principles to the instant case. It will therefore be of widespread interest to both economic operators and contracting authorities as regards the correct treatment of non-compliant tenders, the circumstances in which exclusion of a tender is permitted, and in particular the application of the principles of transparency and equal treatment in the context of errors in a pricing schedule for a call-off under a framework agreement.

Valentina Sloane KC acted for Optima Health (instructed by Eversheds Sutherland (International) LLP).

Azeem Suterwalla and Alfred Artley acted for DWP (instructed by the Government Legal Department).

A copy of the judgment can be found here.