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Legal wrangle behind Leicestershire procurement process

In the wake of Biffa winning a treatment contract with Leicestershire county council, it has emerged that the company raised a number of issues with the authority about the procurement process for the work.

Biffa's Newhurst facility, pictured earlier in 2022, is one of two the company is involved with

Biffa, in comments about the procurement, had accused the authority of “failing to act consistently with the principles of transparency and equal treatment”. At the centre of concerns was information supplied by Leicestershire about the other tenderers for the contract.

As exclusively reported by letsrecycle.com on 1 November, Biffa and Leicestershire have signed an initial eight-year residual waste treatment contract worth between £150 and £650 million for the treatment of residual waste from 2023 (see letsrecycle.com story).

Leicestershire began the procurement process in 2020. The process involved several stages, one of which involved bidders being given details of others’ anonymised bids.

Court documents seen by letsrecycle.com show Biffa deduced using “market intelligence” that it was competing solely against Veolia and drew up the final details of its bid based on this fact. However, it transpired Veolia had withdrawn from the process before Leicestershire gave Biffa details of the bids. Biffa lost out to a bid from Viridor, who had been re-admitted to the process when Veolia pulled out. Biffa later won the contract ahead of Viridor after Leicestershire launched a re-evaluation exercise.

The High Court dismissed Biffa’s application for a summary judgement on the procurement process on 28 May 2021. A summary judgment is a procedure used to dispose of a case without a trial.

Partnership

When asked for comments on the procurement process, a Biffa spokesperson told letsrecycle.com: “We’re working closely with the authority to prepare for the start of the contract and to build our relationship to create a successful partnership that delivers a long and effective waste management solution.”

And, a spokesperson for Leicestershire county council said: “Leicestershire county council has signed a contract with Biffa for the disposal of residual household waste and we are currently working together to mobilise the contract.”

Procurement

The court documents explain that Leicestershire invited bidders each to put forward two “solutions” for the county’s residual waste during the first phase of the procurement process. The solutions taken forward would be those that scored the highest during evaluation, which was broadly concerned with price and quality criteria. The process involved the anonymisation of each bidder.

Biffa passed the early stages and was informed in a letter on 12 October 2020 that its two solutions were ranked third and fourth, behind two solutions proposed by ‘Bidder 2’, the court documents say.

Biffa
Biffa was “surprised” to lose out to Viridor during the procurement process

The 12 October letter contained a breakdown of the price rankings and quality score of the various bidders, the court documents say. Biffa inferred using “market intelligence” that Bidder 2 was Veolia, the court documents say, and that Bidder 3, identified in the letter as unsuccessful, was Viridor.

Biffa submitted its final tender on 18 December 2020. On 11 March 2021, the court documents say, Leicestershire wrote to Biffa informing the company that it had been unsuccessful and it had lost to Viridor.

The margin of difference was “very small”, the court documents say, at only 1.18%. Biffa scored 90.75% during the evaluation process while Viridor achieved 91.93%. Biffa achieved the higher price score, the court documents say, but Viridor achieved a higher quality score.

Biffa was “surprised” by this information, the court documents say. According to the documents, it transpired that two bidders, including Veolia, had withdrawn from the process and Leicestershire had re-admitted Viridor before the 12 October letter had been sent.

Allegations

Biffa said it had deduced the identities of the bidders from the anonymised information Leicestershire provided and that it had relied on the fact that those were the bidders who it would be competing against in the final stage of the competition to formulate its bidding strategy.

I am not convinced that the question of breach of the transparency principle is as straightforward as the claimant suggests

  • Mrs Justice Joanna Smith of the High Court

Biffa alleged that Leicestershire had breached its duty of transparency or misrepresented the position by not updating the anonymised information it had previously provided to the bidders.

Mrs Justice Joanna Smith of the High Court dismissed Biffa’s application for a summary judgement on 28 May 2021 on several grounds, the court documents say.

Among these, she said the Public Contracts Regulations of 2015 “does not contain any provision imposing the legal duty” to disclose details of a bidder’s decision to withdraw from or re-join an ongoing procurement.

“I should be very cautious, particularly on a summary judgment application, of making new law which seeks to impose an enforceable legal obligation on contracting authorities to inform bidders each time one or other anonymised rival bidder withdraws or is readmitted to a procurement process,” she said.

Mrs Justice Smith added: “I am not convinced that the question of breach of the transparency principle is as straightforward as the claimant suggests.”

She also noted that Biffa was engaged in a re-evaluation exercise, which might result in it being awarded the contract after all – as it was.

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