We had some excellent comments on our article about the UK’s Nuclear De-Commissioning Authority (NDA) legal case. The NDA lost recently when the losing (previously incumbent) supplier challenged the selection decision. Mr Justice Fraser, in a fascinating judgement, found that the NDA had treated the incumbent supplier, Energy Solutions, unfairly in the evaluation process. Substantial damages are likely to follow.
We focused in that last article on the issue of pass / fail thresholds. It seems that the NDA fell foul of their own rules as defined in the tender and “fudged” the scoring. That was because they did not want to disqualify the supplier that “won” the competition but who arguably should have been excluded completely because of these thresholds. Les Mosco put it very well in his comment:
“Where a criterion is not a simple pass/fail, then one should not use the kind of doom-laden language which the NDA used, and the judgement correctly says that one cannot change one’s mind part way through the evaluation. But if there are actual and legitimate cases of pass/fail thresholds in tender evaluations, then the evaluation score that is set up and declared at the outset should be clear about them and state that inadequate scores will indeed lead to disqualification”.
Mark Allen also agreed, and added to the debate. He also highlights the issue from a supplier perspective.
“There’s also another perspective to consider, that of prospective suppliers. Fudgey language in tender documents creates uncertainty, the fudgier it gets the greater the uncertainty. It can get to the point where the evaluation appears, to prospective suppliers, to be more of a lottery than a fair decision based on the tender they return”.
Suppliers can and do choose not to bid if they think that a tender process looks unclear or the contracting authority is liable to favouritism or worse. Allen also touches on the issue of audit trails.
“If you don’t or can’t record each element of an evaluation so you always leave an exacting audit trail then you’ve no right making the decision in the first place. You must be able to describe why you’ve (the panel) made a decision and be comfortable knowing that others will see this and potentially judge you on it. This shouldn’t mean being risk averse it should mean being confident in your capability/expertise”.
This is absolutely right of course, and it is picked up in this interesting article from law firm Mills and Reeve on their website. The NDA did not have that audit trail, and as Mills & Reeve point out, the “judge noted that serious consideration appeared to have been given to restricting the keeping of contemporaneous records of evaluation because it was known that these would be disclosable in litigation. The court took the view that if the evaluation process is performed in accordance with the obligations under the Regulations then they would present no danger to the Authority because they would constitute an ‘audit trail of the decision making’.
He also went on to find that a proposed destruction of notes relating to the evaluation was extremely worrying given the express obligations of transparency on public authorities under the Regulations”.
So the courts may look unfavourably on organisations that try to restrict or destroy records of the evaluation debate. The principles of transparency suggest that the more information about the process, the better. However, that does raise some tricky issues when it comes to major procurement exercises where there may well be multiple evaluators looking at the same question and response. How do you come to a consensus view of the “right” score, and how do you record the logic behind that in a convincing and robust manner, knowing that this may be evidence in court if you are challenged?
We will come back to that question in part two, along with some other issues of audit trails and recording of decision-making that were brought into the spotlight by the NDA case.