Webster’s Management Group Ltd v The Attorney General of Anguilla

THE EASTERN CARIBBEAN SUPREME COURT IN THE HIGH COURT OF JUSTICE (crvrL) ANGUILLA Claim N u m ber: AXAHCV2016I0024 Between WEBSTER'S MANAGEMENT GROUP Claimant ' And THE ATTORNEY GENERAL OF ANGUILLA Defendant Before: Justice Cheryl Mathurin Appearances: Mrs, Keesher Carty for the Claimant Mr, lvor Greene for the Defendant 2016: September 23'd j November 11tt RULING 1, MATHURIN J; The Parties agreed that the bifurcation of this matter from the issue of damages would assisl, in the Court's speedy determination and as such, preliminary issue before this Court is whether Executive Council (EXCO) acted ultra vires in extending solid waste collection and disposal contracts after the passing into law of The Public Procurement and Contract Administraiion Act 2012 (The Act). 2, The commerrcet"floflt date of the Act is Decr:mber 31st 2012, The Act reforms the law relating to procurement of works, goods and services src as to comply with international standards, lt requires among otherr things public competition wherever reasonably possible and the award of contracts based on fair competition, This is in contrast to the previous regime where prior to the Act, the award of tenders was done bv the Tenders Eloard. The Claimant (Webster's) alleges that solid waste collection contracts for zones 1, 2, 3 and 4, which are procurements for services and ostensibly within the ambit of the Act, were extended by EXCO from September 2012 to January 2t)13, Further, Webster's alleges that these contracts have repeatedly been extended by EX(10 since that date to the date of consideration of this preliminary issue, Webster's accordingly contends that the repeated extensions of the contracts entered into before the Act, is ultra vires, lt afgues that the proper authority for the award of such contracts is the Procurement Board as stipulated by the Act, 4, Counsel for the Attorney General, Mr. Gnrene, does not dispute as a matter of fact, the extensions, Mr, Greene however submits that EXCCT was acting in accordance with law when it purported to extend the said contracts fron 2012 to pn:sent, notwithstanding that in doing so it was to the exclusion oi'the Act, In this submission he relies on section 50 of the Act to support his contention that EXCO'was not actino ultra vires, Section 50(i2) of the Act states; "This Act does nof apply to procurement conducted by the government prior to connmencement." 5, lmportantly, it is noteworthy that this is a transitional provision. lt follows section 50(1) which provides that the " ,,,Governor in Council ma,y make regulations providing for any transitional matter arising as a conseguence of the coming into force of this Act or a provision of this Act and may make the rcgulations retroactive to the day this Act comes into force or, if all of the provisions of this Act do not come into force on the sarne day, to any day after this Act comes into force." n ln this regard, it is evident that the legislators had in clear view the rule that without clear words to the contrary', statutes do not apply to the parst. First, section 5'1(1)provided that a regulation could be promulgated in relation to any matter arising as a consequence of the assent to the Act, Second, any such regulation could only have retroactive effect to the date of the Act coming into force. Thinl, as provided for in section li1(ll), the strictures of the Act could only apply to a future orocurement after 31st December 2012,

7.Further, in my view, this section cannot be read in isolation, The real meaning to be attached to the words in section 51(2) must be arri'ved at by consideration of what the Act was intended to remedy ancl the provisions of the statute as ia whole. Purposes of Act - Section 4 B, Regard thenefore must be had to section 4 of the Act, That section provides that: "The purposes of /hls Act and the re'gulations are to simplify, clarify and modernise procurement and to make procurernent by the Government transparent and more pafticularly to- (a) require public competition in thet procurement process except to the extent that the cirt:umstances or size of the procurement make it impracticable; (b) foster and encourage broatd pafticipation in the procurementprocess by persons in Anguilla; (c) provide for increased public confidence in the Government procurement process by ma,intaining safeguards to ensure lfs falrness, openness and transparency; (d) ensure fair treatment of allpersons who participate in the procurement process; and (e) ensure fhe besf value is obtained for the procurement dollar." q To interpret section 51(2) in accordance wilth Counsel's submission would run counter to the clear stated purprose of the Act, lt would mean thrat EXC0 could lawfully continue the operation of these pre-2012 contracts ad infinitum by exbnding them under the guise that they are procurements conducted prior to the Act coming into 1brce, This would be to the exclusion of the Procurement Board and thereby would oust the power of the proper authority legislated for that purpose, lt is clear from section 4 that the legislature could not have intended this when the law was passed, This is espercially so in consideration of section 1 1, 10, Section 11 of the Act states lhat "All procuremenfs sha// be made in accordance with this Act," It is linguistic sophistry to argue that ther ertension of a procurement originally made before 3'lst December 11012 is not a procurement caugl'rt by section '1'l because it is the renewal or extension of that procurement albeit after 31st Decr:mber 2012, The intent and the purpose of the Act, and indeed the r\ct itself, cannot be subjugaterd b the actions of EXCO in extending contracts that were entered inb from before the end of 2012. Once the Act came into force and the Procurement Board.was appointed and constituted, section 50(2) of the Act could only refer and be applied to contracts that were in place prior to the c,cmmencement date, lt follows from this, that any residual power vesbd in EXCO in respect of public; procurement, in order to avoid a lacuna, could only have existerl between the commencement date and the constitution of the Procurement Board, ln the face of legislation enacted to deal with procurements, EXCO has no authority to supplant its decision for that of the Procurement Board. 11, Counsel for the Attorney General further submits that all processes under the Act were stopped pursuant to a letter from Counsel for the, Claimant in 2013, That letter Counsel indicates strongly advised and demanded cancellation of contracts as no Chief Procurement Officer (CPO) had been appointed under the Act. There is no indication from Counsel as to a response from the Attorney General's Ohambers in reference to this rjecidedly legal issue, Notwithstanding ihis, it may be that it was appreciated that the manner in which a piece of legislation is withdrawn from operation is by repeal, Absient the legislation being repealed, it remains good law, 12, In any event the failure to appoint a CPO would not have impacted on the powers of the Procurement Board. While the CPO is Lo hread the Procurement Unit and is to provide advice to the Board, he or she is not a member ,cf the Procurement Board. The Procurement Board was therefore frr;e to act in fulfilment of its statutory mandate even in the absence of a CPO, Among the powers open to the Procurement Board were those emergency powers under section 17 of the Act, That section provides that in situationri where the Board determines that it is necessarrl, an

13.Specifically r;ection '17 of the Act states as follows; (1) An emergency solicitation may be made when the Board deternines - (a) That fhere exisfs a thrent to public health, welfare or safety by reason of an emergency condition and the procurement is for the purpose of eliminating or m itig ati n g the th re at ;, 4A tT. The Act threpsle,. permits the Board to make emergency solicitations and determine whai procedure, if any, that is most appropriakr in the circumstances, The Act further indicates what the Board shall have regard to in the relevant cincumstances such as the time and resources required to prepare an invitation for bids or profosals and the time to permit solicitation by competitive sealed bids, AT Director of flealth Protection, Mr. Ambrell Richardson has stated in his Affidavit that "emergency procurement of work was done in the inbresit of public health mitigation at the disposal site," This puts the works squarely within the paranreters under which the Procurement Board could have taken action if consulted, Counsel for the Attorney General has not however submitted any lawful basis as to why this procedure was not f'cllowed as opposed to the continued extensions of previous contracts by EXCO. to. While the Executive can and often does carry out functions that are decisive in nature, those are in circumstances where the legislature has expnessly given that power to it, In and of itself it does not have the po'wer to alter law; that role is fc,r Parliament. In acting to repeatedly extend contracts for procurement without reference to the Procurement Board, EXCO acted to alter the law; it reserved to itself a power which no statute provided, l'hat action was ultra vires, 17, Having so fr:und, the Claimant succeeds in this preliminary issue and the Court hereby declares that EXCO acted ultra vires the Procurement act in purporting to extend continuously, contracts for procurement that were entered into before December 2012, The Court also recognises that any loss suffereti by Webster's can be met by an award of damages and as such is not of the view that setting asidt; of these contracts which would impact tangibly on the issue of public health and waste management would be a proper use of the Court's discretion, In the circumstances, it is hereby orde,red that any future procurements with reference to solid waste management and disposal at tlhe Corito Landfill be awarded in compliance with the Public procurement and Contract Administration Act 2A12 as amended, 18, This matter and the issue of costs is hereby adjourned for assessment of damages upon application unless parties arrive at a resolution otherwise, Cheryl Mathurin High Court Judge. ulw-

THE EASTERN CARIBBEAN SUPREME COURT IN THE HIGH COURT OF JUSTICE ANGUILLA Claim Number: AXAHCV2O14/0066 Between WEBSTER’S MANAGEMENT GROUP LTD, Claimant And THE ATTORNEY GENERAL OF ANGUILLA LUDIANNE LEVERETTE RICHARDSON (Sued in her capacity of Chief Procurement Officer and in her personal capacity) Defendants Appearances: Mr. Thomas Astaphan QC with him, Mrs. Keesha Carty for the Claimant The Attorney General, Mr, Rupert Jones for the Defendants. 2014: Decem[gp’lst, ]lth 2015: January 7tn JUDGMENT t1l MATHURIN, J.; On the 11ttt August 2014,the Claimant (Webster’s) was given leave to file judicial review proceedings with reference to the decision of the 2no Defendant Ms, Richardson, the Chief Procurement Officer (CPO) to not open envelopes submitted at the bidding process on the 25tn July,2014 for the tender of 5 projects advertised by the Government of Anguilla for solid waste disposal services in Anguilla, In this particular instance, the CPO caused to be disseminated two procurement notices to the public in lt[ay 2014 inviting bids for Management of Solid Waste t2l t3l t4l t5l Collection Services for Zones 1,2,3 and 4 and the Management of.Solid Waste Disposal Services at Corito Dumpsite, This meant that there were five contracts available for tender. The Public Procurement and Contract Administration Act, No, 6 of 2012 (the Act) regulates the procurement and contract administration procedure and provides for matters connected with and incidental to that power. The CPO is the head of the Procurement Unit and is responsible amongst other things for the opening of bids in the case of a two envelope bidding process, The advertisement stated that bidding would be conducted through a two- envelope Competitive Sealed Bid Procedure in accordance with the Act and Regulations to the Act, Bidders were invited to purchase the Bid Documents which according to the Regulations includes all instructions to the bidders as to what was required of them for the purpose of Bidding, The Regulations provide for the submission of bids and section 9(5) states that bids should be submitted in the form and in accordance with the requirements specified in the Bid Documents, Section 9(6) states that; “A bid, including a bid that requires a two-envelope process or a two stage bidding process, shall be submitted in a sealed envelope; and where a two envelope process ls used, one shallbe labeled “technical” and one shallbe labeled “financial” as appropriate.” The “two envelope bidding process” is defined in the Act to mean “a competitive sealed bidding process in which two bids are submitted at the same time, the first envelope containing a technical bid and the second envelope containing a priced bid, on the understanding that the first envelopes submitted by the bidders will be opened and the bids evaluated before the second envelopes.” The Bid Documents which were circulated to the prospective bidders described the submission process as follows; ‘2.3 Bid Lodgment Technical and Financial bids to be contained in separate sealed plain envelopes or packages and marked: “C0NFIDENTIAL”, The closing date for submission is July 4ttt, 2014 at 12:00 noon, Technical Envelope should be clearly marked: Attn: Chief Procurement Officer Procurement Unit Techhical Bid for the Solid Waste Collection Services Zone number — Financial Envelope should be clearly marked: Attn: Chief Procurement Officer Procurement Unit Financial Bid for the Solid Waste Collection Services Zone number — Both the financial and the technical envelopes should be placed in one sealed envelope marked “CONFIDENTIAL” and submitted to the Procurement Unit addressed as follows: Attention: The Chief Procurement Officer Procurement Unit Ministry of Finance The Government of Anguilla The Secretariat The Valley Anguilla, B,W,l, Bid For: Management of Solid Waste Gollection Services 23 Number of Copies of Bid The Bidder is required to lodge one (1)original Bid plus three (3)copies (including copies of all supporting documentation), each of which shall be certified by the Bidder to be true copies,” t6l For the purposes of the bidding process, the Act, at section 23(6), provides that in the case of the two-envelope bidding process, the CPO or her designate appointed for the purpose shall; ‘(a) when the first envelope is opened – (t) read aloud the name and address of each bidder or offeror, and (ii) refrain from disclosing any other information contained in the bid or proposal;” The Facts 17l The following is not disputed, 0n the 25m July 2014, the CPO was opening bids for the five projects referred to above. Upon the bids being opened for each of the projects, the CPO found that each of Webster’s five envelopes contained four envelopes inside each marked “Confidential”, She declined to act any further and refused to open any of those four envelopes, To clarify these facts and to avoid repetition, I will refer to what happened when the bids were being opened for Zone 1. lt is to be noted that the same procedure was adopted by the CPO with reference to all the five envelopes submitted bv Webster’s. The CPO states that due to the fact that none of the four envelopes for Zone t had any indication whether they contained a technical or financial bid, it was her belief that the envelopes did not conform to the bid lodging requirements and she oonsidered them to be a non-conforming bid, She explained that the issue she faced was that she may have inadvertently opened a financial bid and compromise the whole process thereby requiring the whole process to be restarted and incurring the additional expense of re-advertising etc;, Counsel for the CPO further submitted that the objective of the two-envelope bidding process is to ensure a fair evaluation of a bidder’s proposal by considering the technical criteria without any influence from the financial proposal. Mr. Webster explained that she should open the envelopes as each one contained a sealed technical bid and a sealed financial bid, Mr, Webster exolained that he enclosed the reouired copies of the technical and financial bids in the same manner thus accounting for why there were four confidential envelopes in each of the envelopes relating to all five bids, The CPO did not open the envelopes despite his explanation. t81 teI l10l t1 1l So it appears that whereas the CPO interpreted the directions for bid lodgment to mean that the Technical Bid with three copies would be enclosed in a sealed envelope clearly identifying it as the Technical Bid and the Financial Bid would similarly be enclosed in a sealed envelope. For its part, Webste/s interpreted the direction to mean that the Technical Bid and Financial Bid would each be enclosed in a separate sealed envelope and these two envelopes would be enclosed in another sealed envelope, Webste/s also understood that this process was to be repeated three times to provide three copies of each bid. Thus, for Webster’s there would be four envelopes, And these four envelopes would all be placed in another envelope to be submitted. To amplify, it is clear the CPO interpreted the directions to require that Bidders enclose the separate Technical Bid envelope and the separate Financial Bid envelope in another (main or outer) envelope marked “Confidential” and addressed to the Chief Procurement Officer. Therefore, the CPO considered the two-envelope process called for the submission of two envelopes, to be enclosed in a third outer or main envelope, In contrast Webster’s interpreted the direction to mean that a separate Technical Bid envelope and a separate Financial Bid envelope should both be enclosed in a (presumably larger) envelope marked “Confidential” and that this confidential envelope should further be enclosed in a (main or outer) envelope addressed to the Chief Procurement Officer, Therefore, Webster’s considered the two-envelope process called for the submission of two envelopes, to be enclosed in a third envelope, which was in turn to be enclosed in a fourth, main or outer envelope. The CPO decided not to act any further upon opening Webster’s envelopes and finding four envelopes marked “Confidential” instead of the two that she states she was expecting, This is the gravamen of the matter that finds itself before the Court, In considering the direction, I am of the view that a correct interpretation of the direction is for Technical Bids and copies to be sealed in an envelope identifying them as Technical Bids and for the Financial Bids to be treated similarly, The two envelopes are then to be placed in an envelope marked confidential and addressed to the Chief Procurement Officer, I therefore uphold the CPO’s interpretation of a three envelope process. u2l

[13]114l The Substance and Aim of the Act The Act, according to its preamble, was enacted to reform the procurement and contract administration procedures of the Government of Anguilla as well as to provide for matters connected therewith and incidental thereto, Section 4 of the Act states specifically that; “The purposes of fhls Act and the regulations are to simplify, clartfy and modernize procurement and to make procurement by the Government transparent and more particularly to- (a) require public competition in the procurement process except to the extent that the circumstances or s2e of the procurement make it impracticable; (b) foster and encourage broad participation in the procurement process by persons in Anguilla; (c) provide for increased public confidence in the Government procuremenf process by maintaining safeguards to ensure lfs farrness, openness and transparency; (d) ensure fair treatment of allpersons who participate in the procurement process; and (e) ensure fhe besf value is obtained for the procurement dollar, It seems to me that the purpose of the statute generally apart from identifying the best qualified bidder with firstly, the technical expertise and secondly, the most financially viable bidder, is to provide an impartial, transparent, competitive and fair process among potential bidders for any given project put up for tender by the Government, The Learned AG has submitted authorities in support of his submission that procedural noncompliance with the procurement process is strictly approached in other jurisdictions. He submits that this strict approach was upheld in Barriere Construction Co Llc v Terrebonne Parish Consolidated Government Court of Appeal Louisiana where the General Bidding Requirements stated that “Bids must be prepared and submitted in accordance with Secfion 102 of the Standard Specifications”. In that instance, Section 102 required that all the information on the envelope were to be filled in to indicate its contents, Barriere’s bid did not meet the reouirements as it did not include the name and number of the project on the envelope, A reading of the judgment also identified that the problem was that there were other bids on that day and that the officer assigned

[15]t16l to the opening of the bids was unsure as to which bid it related. The Court upheld the decision not to open the bid stating that there was non-compliance with the law, The Public Bid Law nowever specifically states the the provisions of this section and those sfafed in the advertisement for bids shall not be considered as informalities and shatl not be waived by any pubtic entrty” and the Court recognized this new amendment to the Law was to restrict previous waivers bv the relevant entities. The Act has no similar provision, ln Harrow v Legal Services Commission (2011) EWHC 1087 (Admin) in essence what the Claimant in fact sought was an amendment of the bid after it had been opened on and determined on the ground that there was an error. The Court refused his appeal recognizing not only the responsibility of the bidder to ensure documents are accurate but also to ensure that all tenders are considered in a fair, like for like and reasonable manner, not affording an applicant an opportunity to amend the bid and improve its prospect of success in the competition after the submission date had passed. Similar consideration by the Courts was given to R (On the application of All About Riqhts Law Practice v Legal Services Commission (2011) EWCH 964 (Admin), lt seems to me however that in the judgments referred to, such absence of compliance necessarily entailed a substantive or fundamental non{ulfillment of a statutory procedural requirement, ln considering the necessary criteria in order to establish whether the provisions of a statute were mandatory or directory in nature if the requirement which has not been observed may fairly be said to be an integral and indispensable part of the statutory intendment, the courts will hold it to be truly mandatory, and will not excuse a departure from it, But if, on the other hand what is apparenly a requirement is in essence merely a direction which is not of the substance of the aim and scheme of the statute, non compliance may be excused, See De Smith’s Judicial Review, Ztn ed; Sweet & Maxwell; Para 5-052 Mandatory and Directorv Duties and powers My view is that the opening of the envelopes by the CPO at that stage is more of a mechanical exercise given that all that is required of the CPO at that stage is to call out the Bidders names and addresses and disclose nothing else. ln fact, after the Technical Bid is opened, the content is analyzed by an evaluation committee formulated for the purposes of assessing whether the technical proposals are viable. Can it be said then in the circumstances that the mistaken t17l t18l tl el t20l enveloping process compromised the integrity of the bids? can the error of webstefs fairly be said to have compromised an integral and indispensable part of the statutory intendment as defined in section 4 of the Act referred to in paragraph 14 above? In considering the Act and submissions with authorities of Counsel, I am of the view that the labeling of the envelopes to identify the nature of the contents in a two-envelope bidding process is a substantive requirement as the need to keep the Technical and Financial bids apart has been clearly explained. The cPO clearly has the responsibility of ensuring that this process is adhered so as to prevent any predisposition towards cost without the expertise being clearly evaluated, In some situations the violation of a provision will, in the context of the statute as a whole and the circumstances of the particular decision, not violate the objects and purpose of the statute, In order to assess this, the Court considers the whole scope and purpose of the enactment and assesses the importance of the provision that has been disregarded, and the relation of that provision to the general object intended to be secured by the Act. The importance of the procedural requirement in the overall administrative scheme can also be considered. In considering the purpose of the statute is to identify the best qualified bidder with firsfly, the technical expertise and secondly, the most financially viable bidder, as well as to provide an impartial, transparent, competitive and fair process among potential bidders for any given prolect put up for tender by the Government of Anguilla, I am of the view that in these particular circumstances, that no prejudice has occurred to the procedure of the opening of the bids save in the most technical way. I do not consider that a bidding process which involved no more than a dozen bids could cause the administrative disarray that clearly influenced the amendment to the Public Bid Law referred to in paragraph 15 above. The opening of the bids was done in public and Webster’s was present to explain in public that his understanding of the enveloping process did not compromise the integrity of the Technical and Financial Bids. Webster’s clearly gave an on the spot explanation of a bona fide attempt to comply which was not accepted, ln these particular circumstances, I find that there was no good reason for the CPO to have rejected Websters explanation. I therefore conclude that it would have been reasonable for the CPO to have opened the envelopes and that the mistake of the enveloping process by Webster’s contravened a direction which is not of the substance of the aim and scheme of the statute and as such non compliance may be excused. I accordingly grant an order of certiorari quashing the decision of the CPO not to open Webster’s envelopes, In consideration of the fact that it was the error of Websters that occasioned this judicial review hearing, I make no order as to costs, The evidence however, in my view, does not disclose a personal cause of action against the CPO who was clearly acting in accordance with the Act and regulations and as such the claim against her personally is dismissed with costs assessed in the sum of US$1,500,00, The Court Further orders as follows; (a) That the injunction dated the 11tn August 2014 is hereby discharged, (b) That the Chief Procurement Officer opens the Claimant’s bid and continue the procurement process with reference to Management Collection Services for Zones 1 to 4 and Management of Solid Waste Disposal Services at Corito Dumpsite, I thank Counsel for their assistance in this matter, Cheryl Mathurin High Court Judge