Case Law Update: J Varney & Sons Waste Management Limited v Hertfordshire County Council - Abnormally Low Tenders - Award Criteria And Sub-Criteria - Equality Of Treatment Amongst Bidders

In J Varney & Sons Waste Management Ltd v Hertfordshire County Council [2010] EWHC 1404 (QB) (Varney) the High Court of England and Wales (Mr. Justice Flaux, Queen's Bench Division, 16 June 2010) dealt with some issues arising in two actions by the claimant company (Varney) seeking damages under Regulation 47(6) of the Public Contracts Regulations 2006 for breach by the defendant County Council of its obligations or, alternatively, damages for breach of an implied contract. Varney was one of a number of unsuccessful tenderers for contracts for the operation of household waste recycling centres in Hertfordshire over a five year period from 2008 to 2013. Varney was in fact the incumbent operator at three of those sites. A tender for the contract to operate all but one of the eighteen sites was awarded. Varney's claim centred on the tendering process and alleged a number of aspects in which the Council was supposedly in breach of the Regulations with regard to obligations of transparency, equal treatment and non-discrimination.

Varney's allegations covered a wide range of aspects of the processing of the procurement and prompted some interesting guidance from the Court.

the Council had failed to disclose the criteria, sub-criteria and weightings which would be applied when determining which of the tenders was the most economically advantageous; the Council had applied criteria, sub-criteria and weightings which were inconsistent with the information which it had disclosed; the Council had decided which contracts should be awarded to which tenderers by applying an overriding criterion of financial strength or stability and therefore used a qualification criterion at the award stage; the Council negotiated with tenderers after tenders had been marked and before deciding which tenderer should be awarded which contract; the Council officers did not treat tenderers equally when applying the criterion of financial stability, but chose to ignore the directions of its own Corporate Services Department in the case of two bidders; the Council erroneously accepted tenders as "Most Economically Advantageous" which included prices which were abnormally low and not sustainable over the life of the contracts; the Council was guilty of various inconsistencies and manifest errors when marking the tenders; the Council failed to enforce the commitments made by the winning bidder when it succeeded in winning its contracts; and after the contracts had been in...