Under the Procurement Contracts Regulations 2015, courts may award damages for breaches of procurement law. Damages will only be granted where a breach is sufficiently serious to justify an award of damages.
In the latest case of Braceurself Ltd v NHS England, the High Court ruled that whilst NHS England made a manifest error in its evaluation which altered the outcome of the procurement process, it was not sufficiently serious enough to justify an award of damages to Braceurself Ltd.
Braceurself Ltd were competing with Orthodontics by Eva Patersfield & Alton Ltd (the “Winning Bidder”) for a contract to provide orthodontic services for NHS England. The scoring was very close, with the Winning Bidder scoring 82.5% and Braceurself 80.25%.
In evaluating the responses, NHS England misinterpreted an answer given by Braceurself relating to the accessibility of its premises to those needing a stair lift, incorrectly scoring them a 3 rather than a 4. But for this error, Braceurself would have been awarded a higher overall score than the Winning Bidder and would have been awarded the contract.
Braceurself sought damages as a result, after NHS England proceeded to award the contract to the Winning Bidder.
The court applied the Francovich test to assess whether the mistake from NHS England was sufficiently serious to justify awarding damages. The Francovich test involved assessing factors such as the state of mind of the infringing party and the degree of excusability of an error. The court found the following:
Consequently, the court concluded that whilst NHS England had made a manifest error in the evaluation which impacted the outcome and who had won the opportunity, the breach was not sufficiently serious to justify awarding damages to Braceurself.
This judgment raises the question, what does constitute a sufficiently serious breach? For in this case, a litigant was denied damages, even though it could prove that it would have won the contract were it not for the breach. It is a blow for suppliers, and once again highlights the difficulties litigants face in seeking an effective remedy for breaches of procurement law.
The decision will, however, be welcomed by contracting authorities as it affords them slightly more wiggle room when it comes to the margins of error allowable in a procurement process. That being said, the case also demonstrates how even the slightest of errors in the evaluation of tenders can have far-reaching implications in the outcome of awards. As such, it is still vitally important that evaluation is conducted with all due care and attention. All evaluators should receive effective training prior to the evaluation exercise, and post tender submission clarifications should be used in a proportionate, transparent and non-discriminatory way.
This case also has an impact on applications by contracting authorities to lift automatic suspensions, as part of the considerations for the court in lifting a suspension is whether damages would be an adequate remedy. To decide this, a court will consider whether the breach is sufficiently serious to justify an award of damages. A contracting authority may be left in a tricky situation, because if it agrees that the breach is not sufficiently serious, this may then weaken its argument that the suspension should be lifted.
Additionally, it is worth mentioning that the courts are yet to decide on a costs order in this case. It will be interesting to see whether the court decides to award a costs order in favour of Braceurself despite not seeing fit to grant it an award in damages too.
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