Optima Health v DWP

This case concerns the treatment of non-compliant tenders, the circumstances in which exclusion of a tender is permitted, and in particular the application of the principles of transparency and equal treatment in the context of errors in a pricing schedule for a call-off under a framework agreement.

In summary:

The claimant (Optima Health) tendered for a call-off contract under a framework agreement. Under the framework agreement, suppliers could not charge prices in excess of framework prices for any call-off contract. Optima submitted a pricing schedule in which a small number of items were more than the framework prices. DWP considered Optima’s tender to be non-compliant and excluded it from the competition.

Court of Appeal overruled the original lower Court decision.

DWP “failed properly to exercise their discretion in respect of the obvious
errors/ambiguities, or wrongly fettered that discretion.”

Decision to disqualify Optima was “irrational” and “disproportionate”.

DWP were “obliged” to seek clarification of certain items and “could have
done so without a breach of the duty of equal treatment.”

Court of Appeal stated that “the most probable answer to the request for
clarification was that the erroneous prices should be reduced back to the
Framework Maximum Prices, and that this would have been a permissible
answer which would not have amounted to a new bid or a substantial
amendment to the existing bid.” –

A RWIND tenderer would have understood “discounted” to mean that non
compliant pricing would be reduced, rather than excluded or disqualified. “If
that is wrong then, at the very least, DWP should have sought clarification”