In Case C-6/15, TNS Dimarso NV v Vlaams Gewest, Judgment on Bastille Day 2016, the ECJ has held that Article 53(2) of Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, read in the light of the principle of equal treatment and of the consequent obligation of transparency, must be interpreted as meaning that, in the case of a public service contract to be awarded pursuant to the criterion of the most economically advantageous tender in the opinion of the contracting authority, that authority is not required to bring to the attention of potential tenderers, in the contract notice or the tender specifications relating to the contract at issue, the method of evaluation used by the contracting authority in order to specifically evaluate and rank the tenders. However, that method may not have the effect of altering the award criteria and their relative weighting.

The ECJ stated the principles as follows:-

“… it should be noted that where the contracting authority decides to award a contract to the most economically advantageous tender, under Article 53(2) of Directive 2004/18, it must specify in the contract notice or the tender specification the relative weighting it gives to each of the award criteria chosen in order to determine the most economically advantageous tender. That weighting may be expressed by providing for a range with an appropriate maximum spread. Where, in the opinion of the contracting authority, weighting is not possible for demonstrable reasons, the contracting authority shall indicate in the contract notice or tender specifications or, in the case of a competitive dialogue, in the descriptive document, the criteria in descending order of importance.

As stated in recital 46 of Directive 2004/18, the purpose of those requirements is to enable all tenderers to be reasonably informed of the criteria and arrangements which will be applied to identify the most economically advantageous tender. In addition, they reflect the duty of the contracting authorities under Article 2 of the directive to treat economic operators equally and non-discriminatorily and to act in a transparent way.

According to settled case-law, the principle of equal treatment and the obligation of transparency entail, in particular, that tenderers must be in a position of equality both when they formulate their tenders and when those tenders are being assessed by the contracting authority …

Thus, the Court has held that the subject matter of each contract and the criteria governing its award must be clearly defined from the beginning of the award procedure … and that a contracting authority cannot apply, by way of award criteria, sub-criteria which it has not previously brought to the tenderers’ attention … Similarly, the contracting authority must interpret the award criteria in the same way throughout the procedure …

Those requirements apply, in principle, mutatis mutandis to contracting authorities’ obligation to indicate, in the contract notice or the tender specifications, the ‘relative weighting’ of each of the award criteria. Thus, the Court has held that a contracting authority may not, in principle, apply weighting rules which it has not previously brought to the tenderers’ attention …

In particular, the relative weighting of each of the award criteria must, subject to the third subparagraph of Article 53(2) of Directive 2004/18, be clearly defined from the beginning of the award procedure, thus enabling tenderers to establish objectively the actual importance given to an award criterion relative to another during their subsequent evaluation by the contracting authority. Similarly, the relative weighting of each of the award criteria cannot be changed throughout the procedure.

Nonetheless, the Court has accepted that it is possible for a contracting authority to determine, after expiry of the time limit for submitting tenders, weighting factors for the sub-criteria which correspond in essence to the criteria previously brought to the tenderers’ attention, provided that three conditions are met, namely that that subsequent determination, first, does not alter the criteria for the award of the contract set out in the tender specifications or contract notice; secondly, does not contain elements which, if they had been known at the time the tenders were prepared, could have affected their preparation; and, thirdly, was not adopted on the basis of matters likely to give rise to discrimination against one of the tenderers …

However, neither Article 53(2) of Directive 2004/18 nor any other provision thereof lays down an obligation on the contracting authority to bring to the attention of potential tenderers, by publication in the contract notice or in the tender specifications, the method of evaluation applied by the contracting authority in order to effectively evaluate and assess the tenders in the light of the award criteria of the contract and of their relative weighting established in advance in the documentation relating to the contract in question.

Nor is such a general obligation apparent from the case-law of the Court.

The Court has held that an evaluation committee must be able to have some leeway in carrying out its task and, thus, it may, without amending the contract award criteria set out in the tender specifications or the contract notice, structure its own work of examining and analysing the submitted tenders …

That leeway is also justified by practical considerations. The contracting authority must be able to adapt the method of evaluation that it will apply in order to assess and rank the tenders in accordance with the circumstances of the case.

In accordance with the principles governing the award of contracts provided for in Article 2 of Directive 2004/18 and in order to avoid any risk of favouritism, the method of evaluation applied by the contracting authority in order to specifically evaluate and rank the tenders cannot, in principle, be determined after the opening of the tenders by the contracting authority. However, in the event that the determination of that method is not possible for demonstrable reasons before the opening of the tenders … the contracting authority cannot be criticised for having established it only after that authority, or its evaluation committee, reviewed the content of the tenders.

In any event, pursuant to the principles governing the award of contracts … the determination by the contracting authority of the method of evaluation after the publication of the contract notice or the tender specifications cannot have the effect of altering the award criteria or their relative weighting.”

There have been a number of important recent Court of Appeal decisions on the law of contract, including in relation to the following propositions: (1) if a party to an agreement promises to make extra payment in order to secure the other party’s promise to perform his existing contractual obligation to provide services and, as a result, secures a benefit, then the benefit is capable of constituting consideration for the promise: MWB Business Exchange Centres v Rock Advertising (2016) EWCA Civ 553 (“MWB”); (2) the fact that a contract contains a clause requiring any amendment to be in writing and signed by both parties does not prevent them from later making a new contract varying the contract by an oral agreement, or by conduct: Globe Motors v TRW Lucas Varity Electric Steering [2016] EWCA Civ 396, MWB; (3) a contract may be concluded where there is acceptance by the claimant by conduct of a written agreement signed by the defendant stated to be binding only after signature by the claimant: Reveille Independent LLC v Anotech International (2016) EWCA Civ 443.

On 18 April 2016 the Concession Contracts Regulations 2016, S.I. 2016/273 (“the Concessions Regulations”), come into force. They implement the 2014 Directive, 2014/23/EU, on concession contracts (“the Concessions Directive”). They extend to England and Wales, and Northern Ireland.

The Concessions Regulations impose obligations on “contracting authorities” (and utilities) concerning the award of “concession contracts”. “Contracting authorities” include local authorities. “Concession contracts” embrace both works and services concessions. They are contracts for “pecuniary interest” concluded in writing under which the consideration consists either solely in the “right to exploit” the works/services or in that right together with payment, and that meet a risk requirement.  That is that the award of the contract shall involve the transfer to the concessionaire of an “operating risk” and that the risk transferred shall involve “real exposure to the vagaries of the market”.

There is a high threshold: £4,104,394. However, below the threshold general EU Treaty principles will apply if the low threshold of a cross-border interest is applicable.

Parts 1 and 2 of the Concession Regulations set out their scope and principles. Part 3 contains rules on the award of concession contracts. Chapter 1 contains obligations relating to the publication of concession notices and concession award notices (Regulations 31 to 33), the electronic availability of concession documents (Regulation 34) and the prevention of corruption and conflicts of interest (Regulation 35). Chapter 2 of Part 3 contains provisions relating to technical and functional requirements of concession contracts (Regulation 36), the selection and qualitative assessment of candidates (Regulation 38) and award criteria (Regulation 41).

Part 4 contains rules on the performance of concession contracts, including provisions relating to subcontracting (Regulation 42), the modification and termination of concession contracts (Regulations 43 and 44) and reporting requirements (Regulation 45). Part 5 contains provisions about remedies.

Walter Lilly & Co Ltd v Clin [2016] EWHC 357 (TCC) concerned a contract for the demolition, refurbishment and reconstruction of a property to form a single residence. Whilst the works were underway, the local planning authority, the Royal Borough of Kensington and Chelsea, wrote to the parties stating that the extent of the demolition was such that conservation area consent was required.  Edwards-Stuart J held that a term should be implied into the contract that the owner would provide the authority with the information its planning officers required in order to process the application for consent, but not a term that consent should be obtained. This was not within the owner’s control.

The Judge said:-

“54.    The reasonable man in the position of the parties would, in my view, have in mind that, in general, a person who wishes to develop his land will know either that he is likely to need planning permission or, in the case of a residential development, that he must satisfy himself that the development proposed is exempt from the requirement for planning permission. The same applies to conservation area consent where the property is in a conservation area.

55. In principle, planning permission needs to be obtained in advance: it can be obtained retrospectively, but this is obviously risky. But even when applied for well in advance, everyone knows that planning permission cannot be taken for granted. For example, the prospects of planning permission being given may depend to a large extent on the attitude of owners of neighbouring properties. Similar considerations may apply to conservation area consent.
56. In this case it seems to me to be obvious that the parties must have intended that someone should have the responsibility for applying for planning permission. This is not a case where, because nothing is said expressly in the contract, the parties could have intended that nothing should happen about planning permission: planning permission had to be obtained in order for the development to go ahead. In addition, it seems to me that it would be equally obvious to an informed bystander that the party best placed to obtain planning permission is the employer, not least because he is the party who knows well in advance what he wants to do. The contractor does not find that out until he is invited to tender, by which time it may be too late for planning permission or conservation area consent to be obtained in time. Any reasonable person would know that a failure to make a timely application for the necessary permission or consent might well result in delay (unless of course the contractor has indicated that is prepared to take the risk of carrying out the work without that permission or consent).
57. It appears to be common ground that the primary responsibility for applying for planning permission rests with the employer. The essential point at issue between the parties is whether a term should be implied to the effect that the employer will ensure that planning permission is obtained, or whether there should be a more limited obligation – for example, to exercise reasonable diligence to obtain the necessary planning permission.”

The Judge said, at paragraph 67, that he could see no justification for imposing on either party sole responsibility for the consequences of capricious conduct by the local authority. For the contract to work it was not necessary that either party alone should bear that risk. The contract can work just as well if that risk is left to lie where it falls. It is a situation where, since the contract has not provided how the risk should be borne, no provision should be made.

The Judge concluded that the correct formulation of the implied term was not one for which either side contended.

A Judge recently struck out a claim brought by two dogs. He did not see how a dog could give instructions for a claim to be brought on its behalf.  Nor did he see that it could be liable for any orders made against it.  Another limitation on litigating is that you cannot sue yourself.  If there is a dispute it must be resolved without recourse to litigation when the disputants do not have separate legal personalities.  A local authority has only one legal personality. So for example the client side of the authority cannot sue the contractor side or vice versa; and the department, say the social services department, cannot sue another department of the same authority, say the housing department.  This is a somewhat anomalous situation, because it means that in the case of a unitary authority the departments have to resolve any differences without going to Court, whereas in a two-tier area, with the functions split between the tiers, the potential is there for the authorities to litigate with each other.

Section 27 of the Children Act 1989 is headed “Co-operation between authorities”. It contains a power: where it appears to a local authority that any other authority could help in the exercise of their functions with respect to the provision of services for children in need, the first authority may request the help of that other authority.  The Section also contains a duty: an authority whose help is so requested shall comply with the request (if it is compatible with their duties and obligations and does not unduly prejudice the discharge of any of their functions).

The case of M&A v Islington LBC [2016] EWHC 332 (Admin) was an application on behalf of two severely autistic children for judicial review of a failure to rehouse them, in accordance with Section 17 of the Act, where the sole authority involved was a London Borough, a unitary authority, both social services and housing authority.  Therefore Section 27 could not apply directly in the way it would as between a county council as social services authority and a district council as housing authority.

However, Collins J ruled that the requirements of Section 27 did apply indirectly. This was because the Council was statutorily required to act under the general guidance of the Secretary of State, and such guidance required the same degree of co-operation between departments in a unitary authority.

On 5 February 2016 HMG has issued (1) a Consultation Paper on “Limiting Public Sector Exit Payments”, and (2) a Guidance Note on “Public Sector Pay and Terms”.

The Government has replaced its Code of Practice on Consultation issued in July 2008. The new guidance includes that “consultations should last for a proportionate amount of time”, rather than prima facie for a 12 week period.

A contracting authority must verify the suitability of its potential service providers. That verification is intended, in particular, to enable the authority to ensure that a tenderer, if successful, will have the means necessary to perform the contract, and to enable the authority to be confident that, throughout the period of the contract, the successful tenderer will be able to use whatever resources it relies upon, including the capacities of other entities.

That gives rise to two questions: first, as to what proof the authority can call for that these resources will be at the economic operator’s disposal; and, second, as to the nature of the links between that operator and those other entities. EU policy is that the tenderer is free to choose the legal nature of the links it intends to establish with those other entities.

In a case from Latvia, C-234/14, the ECJ has on 14 January 2016 held that Directive 2004/18/EC precluded a Latvian local authority from requiring a tenderer, which relied on the capacities of other entities for the performance of the contract concerned, to establish links of a precise legal nature with those entities, so that only those particular links were capable, in the eyes of the authority, of proving that the contractor does in fact have the resources necessary to perform that contract. The municipality required the tenderer, before the award of the public contract, to conclude a cooperation agreement with those entities or to set up a partnership with them. That requirement was ruled impermissible.