The High Court dismissed Smart Telecom plc’s challenge to RTÉ’s award of a two-year television weather sponsorship contract to Glanbia plc, holding that Smart’s bid, which offered 5% above the highest competing bid, was not valid under the tender terms.
In a judgment delivered on 26 May 2006, Mr Justice Kelly ruled that RTÉ’s invitation required bidders to submit a specific price per year and for the full two-year term. Its promise to award the contract to the highest bidder did not permit a bid whose value depended on what others offered.
RTÉ invited four interested parties to submit sealed bids by 4pm on 7 April 2006. The existing sponsorship contract was due to expire in June. RTÉ said the sponsorship was available for at least two years at an asking price of €1.25 million a year, and told bidders it would accept the highest bid. Identical highest bids would trigger a second round.
Smart’s chief executive submitted a bid for 5% above the highest-priced bid received from another business. A Smart subsidiary, Smart Telecom Holdings Limited, also submitted a fixed bid, but the letter contained a garbled amount and did not say whether it was annual or for the full term. After RTÉ sought clarification, the company’s agent sent an email stating that Smart Telecom was bidding €1,500,100 a year. RTÉ treated the subsidiary’s bid as the only valid bid from the Smart group.
Glanbia bid €1,595,500 a year, or €3,191,000 for two years. RTÉ accepted Glanbia’s bid at 5pm. Smart then threatened proceedings, claiming it was the highest bidder and seeking specific performance or damages, an injunction, and declarations about RTÉ’s handling of the process.
The judge found that, read as a whole, the tender invitation called for confidential, independent fixed bids. The words “best offer”, the requirement to state a clear price in annual and total terms, and the provision for a second round if there were identical highest offers all pointed against allowing bids tied to rival bids. He concluded that Smart’s referential bid was invalid and RTÉ was not obliged to award the contract to Smart.
Smart also argued that RTÉ should have told all bidders that referential bids would not be accepted after it gave that explanation to another bidder. The judge found RTÉ’s response merely restated the existing terms and did not change them. RTÉ was not required to notify the other bidders or re-tender, and had not breached a duty to Smart.
The court dismissed the action. The judgment records that RTÉ had accepted Glanbia’s bid; it does not make a separate order awarding the contract.