In a mini-competition run by the Department for Work and Pensions (DWP), the invitation to submit mini-tenders told framework suppliers that they must not exceed the framework prices. It warned that any mini-tenders where the framework prices were exceeded would be 'discounted'.

Optima Health submitted a mini-tender in which three prices in a schedule of rates were priced above the framework prices. The DWP interpreted this as a requirement to exclude their mini-tender.

The exclusion was challenged by Optima Health, who would have won the mini-tender competition otherwise. The court said that the word ‘discounted’ was ambiguous in that it could mean either that:

• the tender would be rejected; or 
• the prices in the Mini-Tender above the Framework Prices would be reduced (discounted) to the framework prices. 

The Court of Appeal said that the excess sums had been entered as the result of an obvious error, would have had no effect on the overall scoring of the bids and would have an impact of 0.02% on the evaluation of the price. In the light of this, the DPW should have clarified the tender, which would have resulted in a reduction to the three non-compliant prices, rather than the exclusion of the mini-tender. 

The challenge could have been avoided completely if a different word (e.g. excluded or rejected) had been used. However, there seems to be a preference within government departments for using ‘discounted’ to mean ‘rejected’ or ‘excluded’. 

Regulation 27(2)(n)(i) of the Procurement Regulations 2024 refers to ‘discounting’ (i.e. excluding) tenders submitted but subsequently withdrawn. This highlights the importance of clear communication, even for the Cabinet Office, to avoid any ambiguity.