Cases - Harmon CFEM Facades (UK) Ltd v The Corporate Officer Of The House of Commons

Record details

Name
Harmon CFEM Facades (UK) Ltd v The Corporate Officer Of The House of Commons
Date
(1999)
Citation
67 Con LR 1
Legislation
Keywords
Construction Contracts - public works - invitation to tender - equal treatment - non discrimination - whether breach of European law - whether breach of an implied contract - whether liable for the tort of malfeasance in public office - Public Works Contracts Regulations 1991
Summary

Within the UK, government policy states that all public procurement of goods and services, including works, is to be based on value for money, having due regard to propriety and regularity. Value for money in procurement is defined as:

'the optimum combination of whole life cost and quality (or fitness for purpose) to meet the customer's requirement'.

The policy is set out in the guidelines from the Office of Government Commerce (OGC). The emphasis on whole life costs means that departments are required to take account of all aspects of cost, including running and disposal costs, in addition to the initial purchase price. The reference to 'quality to meet the customer's requirement' enables departments to specify what they need to meet their own operational and policy objectives while contributing to the government's objectives on environmental matters. Departments must, of course, satisfy themselves that specifications are justifiable in terms of need, cost-effectiveness and affordability.

The most important issue to note is that selection must be on the most economically advantageous tender, not necessarily the lowest. In addition, there must be no post-tender negotiation, and within the tender enquiry it must be made explicit exactly how any tender analysis will be carried out. If details of how tenders will be appraised is not published at the outset, the only lawful criteria for selection will be lowest price on the same technical specification. In this case, the court decided that the defendant had failed to explain what criteria for selection would be used. In the absence of this information, the only correct award should be lowest price on the same technical specification. Harmon's tender was the lowest, but was not on a like-for-like basis with the finally selected tender. The court was critical of the tender evaluation process and found in favour of the plaintiff.