Do Not Pass Go? Pass/ Fail Questions And Their Consequences

A failure to spell out the consequence of failing a pass/ fail criterion in an Invitation to Tender ("ITT") may mean that an authority cannot reject a tender which fails the criteria. As the Court recognised, the judgment has potentially far-reaching consequences for authorities and bidders alike.

MLS (Overseas) Limited ("MLS") brought a challenge against the Ministry of Defence's ("MOD") decision to award a contract worth circa £385 million to a rival tenderer, Shipping Consultants Associated Ltd ("SCA") in respect of various support services to the Royal Navy - including its new aircraft carrier, the Queen Elizabeth. The procurement process was subject to the Defence and Security Public Contracts Regulations 2011, as amended ("DSPCR").

MLS's tender had been commercially compliant, offered the lowest price and was awarded the highest score in the technical evaluation. However, it received a "fail" in respect of its response to a question on how it would ensure a safe working culture throughout its supply chain ("Question 6.3"). Consequently, MLS's tender was deemed by the MOD to be non-compliant and was rejected in favour of the next highest scoring tender (being SCA's tender).

The first five questions in the ITT explained clearly, in bold type, that failing to meet a certain level would result in disqualification; The ITT set out in detail the process by which the most economically advantageous tenderer would be identified, which did not include reference to Question 6.3; and The ITT did not indicate that a "pass" score for Question 6.3 was a minimum...