The Supreme Court has dismissed an appeal by SIAC Construction Limited over Mayo County Council’s award of a major sewerage scheme contract in Ballinrobe to Pat Mulcair, affirming the High Court order that rejected SIAC’s challenge.
The judgment, delivered by Fennelly J on 9 May 2002, concerned a 1992 tender process. SIAC’s corrected tender was the lowest at £5,378,527.69, compared with £5,508,918.82 for Mulcair. The consulting engineer reported that SIAC’s total might be “more apparent than real” because of how it priced the bill of quantities, and recommended Mulcair. The contract was awarded to Mulcair and the works were completed.
SIAC argued that its lower tender should have been accepted and challenged the Council’s reliance on the engineer’s assessment of likely costs over the life of the measure and value contract. The Court of Justice of the European Communities had ruled that an authority using the “most economically advantageous tender” criterion could consider likely ultimate cost, provided the criterion was stated in the tender documents and the assessment was objective and applied equally.
On the resumed appeal, SIAC argued that the tender documents had not notified bidders that ultimate cost would be considered. The Supreme Court declined to hear that point: it had not been raised in the High Court or included in the relevant appeal grounds, and the High Court had not decided it. The court said an appellate court should not entertain an issue that had not been argued or decided below.
The court considered SIAC’s remaining challenge under a standard that recognised the Council’s wide, but not unlimited, discretion. It concluded that the Council had adequately explained its decision. The engineer’s concern was that SIAC’s pricing approach could make contract management and cost control significantly more difficult. Given the uncertainty over final quantities in a measure and value contract, the court said the Council did not need to produce calculations predicting how those quantities would affect the final cost.
The judgment also rejected SIAC’s argument that the Council should have sought further clarification from tenderers after bids were submitted, saying that process could give one bidder an opportunity unavailable to competitors. Fennelly J observed that clearer tender documents about the possible effect of zero-rating and the use of likely out-turn cost would have been desirable; that observation was obiter and did not determine SIAC’s case.
The Supreme Court dismissed the appeal and affirmed the High Court order. The judgment did not decide SIAC’s excluded argument about whether ultimate cost had been notified as an award criterion.