Bite size update on Bechtel Limited v High Speed Two and what it means for public sector tender evaluation

Our bite size update summarises the 150-page judgment and the important takeaways for both public sector purchasers and bidders.

Facts

This case concerned a challenge to the outcome and process of High Speed Two's ("HS2") procurement of a construction partner for the Old Oak Common Station: a complex interchange station development in West London. Bechtel was an unsuccessful bidder and challenged the outcome on the basis that HS2 had:

1. committed manifest errors in evaluating the tenders of Bechtel and the winning bidder; and
2. breached the principle of transparency.

Bechtel also argued that the:

1. contract entered into for the project was different to the version procured; and
2. the winning bid should have been disqualified for being abnormally low.

Decision

Judgment was handed down on 4 March 2021 and Justice Fraser effectively rejected all of Bechtel’s arguments. The judge held that Bechtel had failed to demonstrate that any of the evaluations were in error "let alone manifestly in error" or establish unequal treatment or lack of transparency in HS2's evaluation. In addition, it was held that there was no evidence to substantiate a suggestion that HS2 acted "either irrationally, or manifestly erroneously, in approaching the issue of an abnormally low tender in the way that they [HS2] did" and rejected the argument that there was an abnormally low bid or that the contract or winning bid had been unlawfully modified.

Comments

This case provides a useful example of the application of the transparency principle under Regulation 36(1) of the Utilities Contracts Regulations 2016 in a high profile and technically complex procurement. Importantly, the Court has made it clear that it will not interfere lightly with a public body's tender evaluation and will require either evidence of manifest error (i.e. a clear and obvious mistake) or a breach of a similar obligation to enable it to do so. Public bodies and utilities will likely find this to be a particularly useful authority to rely upon when defending procurement challenges as it confirms that it is not sufficient, in order to bring a successful challenge, for an unsuccessful bidder to argue simply that it disagrees with the scoring awarded by the public body.

If you are a public body in receipt of a procurement challenge, or a bidder who is considering challenging the outcome of a public procurement exercise, you should contact a member of our UK public sector team to discuss your options and next steps.