Information imbalance: Early disclosure in procurement challenges

18 September 2017

Victoria Moorcroft

This summer the Technology and Construction Court published its new Guidance Note on procedures for public procurement cases. The Guidance Note is broad in scope and covers much of the detail on the practical running of a procurement procedure, but a key focus is information – what should be disclosed, when it should be disclosed, and to whom it should be disclosed.

This requirement is relatively unique to challenges to procurement decisions because of the information imbalance between the procuring entity and the bidder. Very often, all the relevant documents sit with the authority – evaluation notes, meeting notes, the winning bidder's tender, information on matters discussed with the winning bidder, the form of the final contract... the list can go on, particularly if a long and complex procurement process has been undertaken. The Guidance Note looks at the practicalities of information provision both during the pre-action phase and once litigation has commenced.

What should the pre-action phase look like?

Due to the unique time pressure involved in procurement challenges, there is almost inevitably a flurry of correspondence between receipt of a standstill letter and the conclusion of the standstill period.  The Guidance provides a shape for that correspondence:

  • An initial letter before claim from the bidder containing (i) the grounds of challenge, (ii) the information sought, (iii) the remedy that is sought, (iv) a request for extension of the standstill period or a commitment not to enter into the contract; and (v) a time limit for response. 
  • An initial response from the authority ASAP acknowledging receipt and confirming whether the standstill will be extended. 
  • Provision of information that bidder is entitled to as soon as possible and a substantive response from the authority to the bidder within the timeframe set by the bidder or as soon as possible thereafter. 
  • 'appropriate and proportionate' efforts to resolve the dispute. 

That is broadly what happens in any event in most claims so doesn't significantly change the way things are generally dealt with.  What is more interesting is the way the Guidance expects parties to act:

  • Cooperatively and reasonably in all aspects of the litigation, including requests for extension of time and amendments following further disclosure; and
  • Reasonably and proportionately regarding information provision. The Guidance specifies specifically that the aim of the parties should be to avoid the need to issue proceedings simply to obtain early specific disclosure, and that the authority is "strongly encouraged" to disclose key decision materials at an early stage where relevant to the complaint made. This is subject to "genuine concerns" regarding confidentiality, and in that regard the Guidance recommends the early establishment of confidentiality rings to help overcome these difficulties. 

Information disclosure in the early stages of the procurement

The Guidance also looks at information provision in the early stages of the proceedings. It repeats that authorities should provide "key decision making materials" very early in proceedings or in pre-action correspondence, including the so-called 'procurement report' detailing key aspects of the process, and documentation that was kept to provide a written record justifying all the key decisions that were made. 

Confidentiality

The Guidance is clear that confidentiality is not a bar to disclosure. However, it also recognises that some confidential information should be disclosed if appropriate within a confidentiality ring, established as early as possible. The participants in such a ring will vary, and indeed you may have two 'tiers' of participants in a ring, some of whom can see more information than others. That might include for example, only external lawyers being able to see some of the most sensitive information about the winning bidder, whereas other information could be shared with a 'clean team' within the claimant who will be separated from future business where the information might give them an advantage. 

Conclusion

The extent to which public authorities act reasonably in providing information in procurement processes varies enormously in our experience. The Guidance settles firmly in favour of the provision of some key information at a very early stage. Whilst it is not binding, a failure to comply with it could have adverse cost consequences for an authority. For example, a court is likely to take into account the contracting authority's behaviour if a claimant needs to discontinue proceedings having obtained disclosure of documents it had rightly requested and should in accordance with the guidance have been provided with earlier. That said it is also worth noting that the Guidance requires a claimant also to act proportionately and reasonably, and that would undoubtedly include in respect of the scope of its requests.     

For that reason, the Guidance is unlikely to resolve all skirmishes. Authorities are rightly concerned about maintaining the confidentiality of information, and want to avoid pandering to fishing exercises. In light of this, disagreements about what is relevant to any particular complaint, and what information a bidder is entitled to seem likely to continue.