Offers may be evaluated on the basis of a presentation made after opening of the bids
The National Appeal Chamber has held that it is permissible after opening the bids in an unrestricted tender to hold an exam in which the experts offered are evaluated, and for the points awarded on the exam to serve as a criterion for evaluation of the offers.
In a procurement conducted by Poland’s Ministry of Infrastructure and Development under the unrestricted procedure (no. BDG-V-281-49-MWr/14), the contracting authority decided to check the skills of bidders seeking a contract for legal advisory services and legal representation in the area of public procurement by examining the experts indicated in the offer. The exam is to be held at the contracting authority’s offices after opening of the bids and the result is to be weighted 50% in the evaluation of the offers. (We reported on this case earlier on our portal.)
The model for verification of skills applied by the contracting authority is innovative, but raises doubts of a procedural nature. Unfortunately, these doubts are not dispelled by the justification for the ruling issued on 27 August 2014 (KIO 1630/14), in which we filed an appeal.
Exam essay as a work sample?
The case law of the National Appeal Chamber concerning the contracting authority’s right to demand samples (here, a sample of the skill of writing legal opinions) clearly distinguishes between samples which are a document confirming fulfilment of the requirements specified in the terms of reference, and samples which are an element of the offer. The existing case law from the chamber leads to the conclusion that some samples may be submitted only together with the offer and cannot be supplemented pursuant to Art. 26(3) of the Public Procurement Law. If they are missing from the offer, the offer must be rejected, while doubts surrounding the content of the samples may be clarified only under the procedure set forth in Art. 87(2) (KIO 2296/12, KIO 217/13 and KIO 2511/13). Thus if the exam essay subject to evaluation as a 50% criterion for ranking of the offers were treated as a sample constituting an element of the offer, submitting the exam essay after the deadline for filing offers would be regarded as late supplementation of the offer. Until now the National Appeal Chamber has consistently held that if the sample is the sole basis for evaluating offers under the specific criterion (here the criterion of quality), then it constitutes part of the offer and not a document falling under Art. 25(1) of the act.
In this specific case, the exam papers written after opening of the offers by the two experts named in the offer are the only document enabling an evaluation under the criterion identified in the tender as “quality of legal opinion.” None of the other documents included in the offer enable examination of the offer in this respect, because the list of persons who will participate in performance of the contract is regarded as the basis for evaluation of the offer under another criterion, “staffing potential.” During examination and evaluation of the offers, only the exam papers written after opening of the offers would be relevant under the criterion of “quality of legal opinion.” Thus the finding by the National Appeal Chamber (conflicting with the terms of reference and the explanation from the contracting authority) that the 50% criterion of “quality of legal opinion” and the 20% criterion of “staffing potential” are really one and the same criterion, just examined by the contracting authority from different angles, is unconvincing.
Moreover, contrary to the position taken before, the chamber treated the exam paper as a document referred to in Art. 25(1) of the Public Procurement Law, in connection with §6(1)(1) of the executive regulation on documents the contracting authority may require from contractors—which is not possible in the case of an exam paper that constitutes an element of the offer.
Exam paper as presentation of a sample?
The possibility of regarding exam papers by experts as the presentation of a sample (or product), a notion encountered in the case law of the National Appeal Chamber, which is then treated as a sort of document submitted during the tender proceeding but not expressly mentioned in §5(1) of the regulation on tender documents, should be rejected.
Such a presentation is permissible when the contracting authority cannot examine samples itself because it lacks specialised tests or expert knowledge. Such circumstances did not occur in this case, as the contracting authority itself stressed that it had its own experts capable of evaluating the exam papers, who in the past had performed many times activities the same as the subject of the procurement. And the procurement was of a standard and typical nature, involving legal review of the correctness of the expenditure of funds in proceedings conducted by entities controlled by the contracting authority.
It is also stated in the case law and the commentaries that a “presentation” is held when examination of the sample requires the participation of the contractor, as contrasted with the rule that examination of samples submitted in the offer is conducted by the contracting authority on its own. But here the contractors will not be involved in examination of the sample opinions. The contracting authority will evaluate the samples itself using its own experts.
It is also stressed that a “presentation” refers to a document included in the offer as of the deadline for submitting offers. And as a rule that the presentation itself is not subject to evaluation; rather, the presentation is used for evaluation of the characteristics of the procurement included in the offer. None of these rules were complied with in this case.
Moreover, the conditions for this procurement provide that failure to appear for the examination will result in no score for the quality criterion, which is assigned a weight of 50%. But the existing case law of the National Appeal Chamber indicates that if a contractor fails to appear for a presentation, it should be summoned once more to appear , and then if the contractor again fails to appear its offer may be rejected. For these reasons, the possibility of regarding an exam conducted after the deadline for offers as a presentation should be rejected.
National Appeal Chamber position
These arguments raised in the appeal were not upheld in this case. The National Appeal Chamber found that because the offer identified two experts, the content of the offer is the designation of these two experts to perform the contract. This means that the exam held after opening of the offers is intended only to check the skills of the experts who were already an element of the offer. The mechanism of examination of the offers under the criterion of “quality of legal opinion,” in the chamber’s view, has the features of a presentation of the skills of the persons, through the medium of the persons included in the offer. In other words, according to the chamber, the experts identified in the offer are themselves a sample which will then be presented after opening of the offers.
The problem with this is that regarding an exam as a presentation leads to creation of exam papers which are then graded and assigned points. But the evaluation of the exam papers is conducted without the participation of the contractor—not what happens in the case of a presentation. So then how is such an exam permissible?
Unfortunately, the justification for the ruling in case KIO 1630/14 does not contain substantive arguments for approval of this expansion of the one-stage unrestricted tender to include an exam stage. The allegation of violation of Art. 39 of the Public Procurement Law was rejected on the grounds that conducting an exam very shortly—two hours—after opening of the offers does not distort the procedure. But by the same reasoning an unrestricted tender could also be expanded to include a negotiation stage, so long as it were brief and began immediately after opening of the offers.
Unclear evaluation criteria
Apart from recognising the permissibility of an exam phase in an unrestricted tender, the chamber in this case also upheld the description of the method of evaluating the offers under the criterion of “quality of legal opinion,” even though the criteria for grading the opinions were described vaguely in the terms of reference and the contracting authority could not explain what it would be guided by when awarding 0 to 7 points for each element of the exam paper. When asked by the chamber how many points the contracting authority would award if out of four properly cited regulations three were applied correctly and one incorrectly, the contracting authority replied, “This will be the subject of an individual evaluation by the tender committee and a determination of what weight to be assigned to this shortcoming.” The chamber upheld the contracting authority’s reasoning that a specific formula could not be established for evaluation of a legal opinion and possible mistakes, “because if the contractor makes a major error, it could result in further errors and disqualify the opinion.”
The subjective belief that it was impossible to precisely describe the method for grading the papers was thus equated with the objective impossibility of using precision (but only for the purpose of overruling the objection, as discussed below). But reluctance and objective impossibility are two different things. After all, the contracting authority itself thought up the case study which was the subject of the exam, and based on that could determine in advance the points where contractors could make mistakes leading to an incorrect result.
While stressing that the contracting authority had prepared the terms of reference with the greatest possible precision, the National Appeal Chamber then contradicted itself by stating that it would be worthwhile to apply a more optimal method for evaluating the exam papers, eliminating all subjective elements, for example by assigning the evaluation to an external expert or, when drafting the case study for the exam, to draft at the same time a model solution to be used to check the papers.
According to the chamber, “It would be commendable if prior to performance of the task, there was a solution already prepared and sealed, containing a model for the correct evaluation of the case study.” Thus, contrary to its own ruling, the chamber admitted that the contracting authority could have precisely described the method for evaluation of the offers, while the mechanism used in the terms of reference was too arbitrary. But the chamber did not require the contracting authority to take any of the steps mentioned to clarify the terms of reference because the appellant did not request such solutions.
Indeed. In connection with the allegation of violation of Art. 36(1)(13) of the Public Procurement Law, through imprecise description of the manner of evaluation of the offers under the criterion of “quality of legal opinion,” while at the same time regarding the exam stage in the proposed form as impossible, the appellant requested deletion of the entire point entitled “Description of criteria the contracting authority will be guided by when selecting the offer together with a statement of the significance of such criteria and the method of evaluation of offers,” arguing that the description of the awarding of points for the quality criterion should apply to information and documents submitted together with the offer. In effect, the contracting authority would evaluate the exam papers using hugely discretionary rules.
This ruling by the National Appeal Chamber means that contractors should be prepared to see more tenders of this type. Submission of offers will require greater personal involvement of the contractors, and the declared skills will be verified experimentally before the contract is awarded. It can only be hoped that other contracting authorities in the future avoid subjectivity and imprecision in determining the method for evaluation of offers and prepare the tender procedures more carefully.
Anna Prigan, Infrastructure & Transport and Public Procurement & PPP practices, Wardyński & Partners
