The case was AbbVie v NHS England [2019] and concerned a £1bn contract for Hepatitis C drugs. This case confirms that contracting authorities/utilities benefit from a broad discretion when designing and setting award criteria. Notably, the fact the model might favour a particular bidder over another does not automatically make the methodology unfair.
The case also confirms that the margin of appreciation when considering award criteria is not a black and white issue. Rather, only where the treatment is “arbitrary or excessive” will the contracting authority have no further margin of appreciation.
Finally, the fact that NHS England’s aims of achieving greater value, increasing competition, reducing cost, maximising desired outcomes and enabling comparison of inherently different bids/bidders were all deemed to be legitimate and were considered to outweigh the potential discriminatory effects on Abbvie, will provide further comfort to contracting authorities. Whilst contracting authorities should strive to avoid unequal treatment, the pursuit of legitimate aims may well provide a useful safety net.
Practical tips
- Remain cognisant of the equal treatment principle: be aware of the principle of equal treatment throughout the process of setting and applying award criteria and consider the market in which you’re procuring. Where aspects of the bidding field are comparable, ensure that there is no differential treatment. Where there are clear differences between bidders (e.g. due to the existence of incumbents or differing product offerings) differential treatment may be justified to allow a level playing field and a like-for-like comparison.
- Be clear on the aims of the procurement process: ensure that the aims of the procurement are clear and clearly set out in procurement documents and that they are reiterated throughout the process so you are fully transparent. Provided that your aims are legitimate and the means of securing them are proportionate in the context of the procurement, the courts may decide in favour of the contracting authority/utility even if the evaluation methodology could favour one bidder over another.
- Use experts for complex procurements: this case deals with esoteric specifics of a complex evaluation methodology and highlights the importance of specialist support when undertaking complex procurements. Perhaps due to the significance and high value of this procurement, NHS England engaged Game Theory and Auction Theory consultants to design and test their evaluation methodology and their evidence played no small part in the outcome of this case and the procurement.
In2 the bargain 