Companies lose challenge over Luas contract process

A joint venture which came second in the bidding for Dublin’s €368 million cross-city Luas line has lost its High Court challenge over the process for awarding the contract.

Portuguese construction company, Somague Engenharia SA, and Mayo-based civil engineers, Wills Brothers Ltd, who established a joint venture to bid for the project, came second in the tendering process for the 5.6km of track linking the existing Green and Red Luas lines and extending to Cabra.

The winners were another joint venture, Sisk Steconfer, comprising Dublin-based construction company, John Sisk & Son and Steconfer, a Portuguese construction company specialising in railway works. Work is already underway on the project due for completion in October 2017.

Somague/Wills claimed the tender competition was vitiated by a number of serious errors and breach of the rules relating to public procurement. It was accepted by them during the case it was primarily about damages and no application was made to have the contract suspended pending determination of the proceedings.

The case was against Transport Infrastructure Ireland (TII), formed by the merger of the National Roads Authority and the Railway Procurement Agency under 2015 legislation. Somague/Wills' main grounds for the challenge alleged TII applied inapplicable and/or identified criteria to its qualitative assessment in relation to the tie-in of the new line with the existing Red Line (to Tallaght).

It was also claimed TII failed to apply certain identified and applicable criteria or to properly engage a process involving the most economically advantageous tender. TII denied the claims and opposed the application for judicial review.

Ms Justice Marie Baker refused Somague/Wills application. She found there was no manifest error in how the tenders were evaluated under a number of headings. An 11-person evaluation team dealt with bids from five different joint project bidders. The matters considered in the evaluation included how authorities such as Dublin City Council, the Luas operators and property owners along the line would be dealt with. They also included proposals on how quality management processes and procedures would be implemented during construction stage as well as traffic management during construction, fencing-off of works, traffic lights, and how it was proposed to complete the project within a 34-month time frame.

The judge also found there was no error in how marks were given on how maximum marks were given to the winning bidder on the public relations strategy for communicating with affected parties during construction. Somague/Wills contended TII breached the rules of contract by abandoning negotiated procedure and by doing so breached general principles of transparency and equal treatment, the judge said.

The judge found it was incorrect to say TII manifestly erred in not returning to Somague/Wills to negotiate further elements of its tender or to negotiate between the two top tenderers to achieve the best and final offer. The judge said she was handed a sealed envelope which contained the price of the winning bidder which Somague/Wills said the court should consider in order to understand the extent of irrationality in not doing such post-competition negotiations. The judge returned the envelope unopened because, she said, this competition was not intended to be awarded on the basis of a best price offer. No benefit could be gained from her knowing what the winning bid was because Somague/Wills lost marks in the evaluation process “on qualitative and not quantitative criteria”. It was sufficient for her to know Somague/Wills bid was lower than the winner’s, she said. She also concluded TII was under no duty to negotiate after the competition decision.