Can a public works tender be accepted where it is submitted after the tender deadline?

Tuesday 08 November 2016

 

Can a public works tender be accepted where it is submitted after the tender deadline? This issue was recently examined by the Irish High Court in BAM PPP PGGM Infrastructure Cooperatie UA v National Treasury Management Agency and Minister for Education and Skills [2016] IEHC 546.

 

Facts

 

The applicant (‘BAM’) was an unsuccessful tenderer for the project in question. The first named respondent (‘NTMA’) identified Eriugena as the tenderer with the most economically advantageous tender; however due to IT difficulties some of Eriugena’s tender documents had been uploaded after the deadline set for receipt of tenders.

 

Relief Sought

 

BAM sought a number of reliefs, including orders setting aside the decision of NTMA to accept Eriugena’s late tender and the decision to accept Eriugena as preferred tenderer. Its central assertion was that NTMA was not entitled under the Invitation to Negotiate (‘ITN’) provisions and the relevant legal rules to accept a tender that was received in whole or in part after the expiration of the time fixed as the deadline for receipt of tenders.

 

Judgment

 

Did NTMA have a discretion to accept Eriugena’s late tender?

 

The Irish High Court held that, under the wording of the ITN as it would be interpreted by a tenderer, the NTMA had a discretion to accept such tenders. However the court also found that, even if the ITN did not contain a discretion to do so, such a discretion would exist under the general law. The Irish Supreme Court decision in SIAC Construction Ltd v Mayo County Council [2002] IESC 39 was cited as authority for this. In the SIAC case the court ruled that a contracting authority has a power in exceptional circumstances to accept and evaluate a late tender, or tender documents submitted late, notwithstanding that there may be no express or implied discretion in the ITN.

 

NTMA therefore had a discretion, both under the ITN and the general law, to accept a late tender.

 

Was this discretion correctly exercised?

 

The court noted that, where no express or implied discretion arises from the ITN, SIAC is authority for the proposition that there must be ‘exceptional circumstances’ to warrant the acceptance of a late tender. However it observed that the concept of ‘exceptional circumstances’ should not be defined or limited by the courts and should be considered in the context of all relevant facts.

 

Where there is a discretion under the ITN, proof of exceptional circumstances is not required; however the principles of equal treatment/non-discrimination, proportionality and transparency must not be infringed.

 

It was held that NTMA’s discretion was appropriately exercised. A number of considerations led to this conclusion:

 

  1. The late documents were not created or modified after the tender deadline, and hence the tender was not improved post deadline.
  2. Eriugena encountered technical difficulties that were not wholly within their control in the uploading of the documents.
  3. The late documents were uploaded within a short space of time after the deadline.
  4. NTMA conducted appropriate investigations, looked at other available evidence, and took appropriate advice to verify the foregoing before reaching a decision.

 

Therefore, NTMA was entitled to treat the late submission of the documents as an administrative error and to accept them. Further, and in the alternative, the court was satisfied that NTMA was entitled to treat the circumstances giving rise to the late delivery of the documents as ‘exceptional’. However it noted that, had Eriugena demonstrably left it too late in commencing the upload, or otherwise acted irresponsibly, a different decision may have been reached. Finally, the court held that, on the facts of the case, the principles of non-discrimination, proportionality and transparency had not been infringed.

 

Take-Aways

 

Where the ITN does not provide for an express or implied discretion to accept a late tender, or part of a tender, there must be proof of exceptional circumstances to warrant acceptance of the tender.

 

The concept of ‘exceptional circumstances’ is highly contextual and will depend on the facts of each case. As seen in this case, it can include IT difficulties which fell outside the control of the tenderer, provided that the tenderer acted responsibly and did not gain any undue advantage over other tenderers from the late submission.

 

If the ITN does contain such a discretion, proof of exceptional circumstances is not required; however, it must be shown that the principles of equal treatment/non-discrimination, proportionality and transparency were not breached.