Overview

The case of Varney, decided in the High Court on 16 June 2010, is a shift away from the run of pro-tenderer cases. The case considered a number of important current issues which have previously been decided by the English Courts and the European Court of Justice (ECJ) and, at a practical level, frequently arise in the course of a procurement. It reflects a less rigid approach to the Regulations than previous cases and will be well received by procuring authorities.

However, given that several of the key findings cut across ECJ decisions, whether it will be followed is another matter.

To put the decision in context the case does involve a lot of commentary about the quality and nature of the disgruntled tenderer's case and it seems that the Judge's decision is founded on the deserving party principle. In commenting on the tenderer and his witnesses the Judge comments: "as happens far too often in civil litigation, his witness statements were something of a lawyer's construct, carefully crafted to cover particular aspects of Varney's case and to argue that case, displaying a level of sophistication which Mr Varney himself lacked in the evidence he gave in the witness box".

In summary, the following key lessons emerge:

There is a clear risk that a tenderer who waits for three months from notification that its tender has been unsuccessful before bringing a claim based upon a lack of transparency will be struck out on limitation grounds, where the intended use of undisclosed sub-criteria or weightings was apparent on the face of the ITT
In some cases, where it can be shown to be relevant and it has been identified as an evaluation criteria in the ITT, tenderers' financial strength can be used at the evaluation stage
Even though the obligations on an authority in respect of abnormally low tenders may be less than previous cases might suggest, careful consideration should be given to whether unusually low bids are sustainable in terms of contract performance and, if so, whether they should be rejected on this basis
Tenderers intending to challenge under the Regulations should pay particular attention not just to whether there has been an infringement, but also to demonstrating the impact on their tender if they are to succeed in a damages claim.

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