Trade Practices Commission v Walplan Pty Limited

Re: BERKELEY CLEANING GROUP PTY. LIMITED
And: CAPITAL TERRITORY HEALTH COMMISSION and LIMRO PTY. LIMITED
No. G363 of 1984
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Morling J.

CATCHWORDS

Administrative law - judicial review - cleaning contract at hospital - call for tenders - tender submitted inaccurately stated tenderer's offer - review of tender - tender excluded from consideration - higher tender accepted - whether decision to exclude tender invalid

Administrative Decisions (Judicial Review) Act 1977, s.5

Audit Act 1901, s.63F

HEARING

SYDNEY
#DATE 14:8:1985

ORDER

Application dismissed.

Question of costs reserved.

JUDGE1

In July 1984 the Capital Territory Health Commission (whose name has since been changed to Capital Territory Health Authority) invited tenders for the provision of cleaning services for the Woden Valley Hospital. Berkeley Cleaning Group Pty. Limited ("Berkeley") submitted a tender but did not succeed in obtaining the contract. The contract was awarded to Limro Pty. Limited ("Limro"). Thereupon Berkeley applied to the Court under the provisions of the Administrative Decisions (Judicial Review) Act 1977 for a review of the decisions to reject its tender and to award the contract to Limro. The Authority and Limro contended that the decisions were not reviewable under the Act. On the 21 March 1985 I held that the decisions were reviewable and an appeal from that decision was subsequently dismissed.

To understand the issues which fall to be determined it is necessary to refer in some detail to the facts. The period of the contract for which tenders were called was from 1 October 1984 to 30 September 1988. Tenders closed on 31 July 1984. Tender documents were made available to interested parties. They contained a statement that neither the lowest nor any tender would necessarily be accepted. They contained detailed specifications for cleaning the various buildings in the hospital complex. The specifications referred to all the buildings in the complex although, as at July 1984, parts of some buildings were not occupied and were not required to be cleaned. Included in the tender documents was a document listing the special conditions applicable to the contract. Under these conditions tenderers were required to submit details of their proposals on a Tender Schedule and were informed that any tender which was not submitted in accordance with the specifications might be rejected. The special conditions included a provision that the contract would be terminable by either party giving in advance two months notice in writing of his intention to terminate the contract. Special Condition 8 was in the following terms:

"8. Variation In Area To Be Cleaned

The secretary may at any time, by notice in writing given to the Contractor, increase or decrease the area to be cleaned under the Contract. In any such case the amount payable to the Contractor shall be varied by an amount calculated on a square metre basis in accordance with Tender Schedule. The Contract is for the total cleaning function as specified in the schedule, however, the Commission reserves the right to amend the requirements and frequency of cleaning as it deems necessary and without prior notice."

Also included in the tender documents was a document described as "General Terms of Tender and Contract". This document provided that the general terms should, unless specifically provided otherwise, be deemed to be part of and included in all tenders called and contracts entered into by the Woden Valley Hospital for the supply of goods or services. Clauses 2.3 and 3.17 of this document were in the following terms:

"2.3 Tenders may tender for all or part of the goods or services shown in the schedule unless specifically otherwise stated. The Association reserves the right to accept a tender for all or for any part of the goods or services which have been tendered for. "

"3.17 Where any schedule to a tender or contract is inconsistent with the General Terms of Tender and Contract, the former shall to the extent of the inconsistency prevail."

The tender documents contained a provision requiring tenderers to provide information which could be used as a basis for any variation by way of increase or decrease of areas to be cleaned. Tenderers were asked to indicate the price per sq. metre per annum for cleaning a number of floor surfaces in a variety of areas, such as wards and laboratories.

The tender documents were accompanied by a Notice to Tenderers. The notice described the hospital as a "multi-storey complex consisting of ten buildings of which nine are the subject of the contract" and identified the nine buildings. The nine buildings are identical with the buildings referred to in the schedules to the special conditions of contract.
The Notice to Tenderers stated that intending tenderers could arrange to have a site inspection. A site inspection to which all prospective tenderers were invited took place on 13 July. Approximately sixteen people were in attendance. The applicant was represented by Mr Barnsley who is its contracts manager. The applicant carries on a substantial business as a cleaning contractor. For some eleven years prior to 1984 it had been awarded the contract to clean the hospital.
The site inspection was conducted on behalf of the hospital by its assistant secretary, Mr Elton. There is a conflict of evidence as to what was said by Mr Elton during the course of the site inspection. According to Mr Barnsley he asked Mr Elton whether tenders should be "on a full building basis or as it is now" and Mr Elton replied: "It would be easier if everybody tendered on a full building basis but you can either tender on a full building and present rates to take off the vacant areas or tender as it is currently occupied and use the rates to expand it upwards."
In substance, what Mr Barnsley alleged was that
tenderers were told on the site inspection that they could tender on one of two alternative bases. The first basis was that the contract was to clean all the buildings, whether occupied or unoccupied. The second basis was that the contract was to clean only those parts of the buildings which were, in fact, occupied as at the date of tender. In both cases, tenderers were to include in their tender documents information, i.e. rates per sq. metre for cleaning various surfaces, which could be used by the hospital should it require to vary the areas which the successful tenderer might be required to clean during the term of the contract.
Mr Elton disputed Mr Barnsley's account of what was said on the site inspection. According to him, he told all persons who were in attendance that some parts of the hospital buildings were currently unoccupied but that tenders should be "for whole buildings because of changes that can occur at any time". He said that at no stage did he state that potential tenderers could submit tenders based upon current occupancy levels.
There is much other evidence as to what was said on the site inspection. As might be expected, the witnesses were not agreed as to exactly what was said. According to Mr Hore, who attended the site inspection as the representative of another tenderer, he heard Mr Elton say words to the following effect:

"You can submit a tender price based on a fully occupied hospital but showing the relevant rates for areas not requiring cleaning or you can submit a tender price based on current occupancy showing the relevant rates for addition of areas requiring cleaning."

This evidence is generally supportive of Mr Barnsley's evidence but there is other evidence which supports Mr Elton's account of what he said. Having heard and seen the witnesses, I prefer Mr Barnsley's account of what he heard Mr Elton say. This is not to say that I think Mr Elton gave a deliberately untruthful account of what he said on the site inspection. I think his recollection of what he said is faulty. As will appear later in these reasons, I did not find Mr Elton to be an entirely satisfactory witness. I think he gave explanations of past events and conversations which were improbable and less than satisfactory. It may well have been the case, of course, that during the course of the site inspection Mr Elton made statements to Mr Barnsley and others which were not overheard by other persons. Thus the failure of some of the witnesses to hear what Mr Barnsley alleges was said to him by Mr Elton by no means establishes that Mr Barnsley's evidence is incorrect. I accept Mr Barnsley's account of what was said to him by Mr Elton.

In due course six tenders were submitted to the Authority. Berkeley's tender was accompanied by a letter which included the statement that "We have based our submissions on the Terms and Conditions as specified in your tender documents". Its tender price was referred to in a schedule, and since it is of critical importance I set it out in full. It was in the following terms:

"TENDER SCHEDULE

CLEANING : WODEN VALLEY HOSPITAL BUILDINGS

DESCRIPTION COST PER ANNUM

Building 1 - Main Hospital $ 454684.18

Building 2 - Auditorium & Tunnels $ 7426.64

Building 2 - Kiosk $ 1856.92

Building 3 - Community Health Block $ 166674.56

Buildings 4,5,6,7 and 8 (excludes Building 8 flats but includes Motels Building 6 and 8) $ 85767.76

Building 10 - Central Health Laboratory $ 54685.28

TOTAL CONTRACT PRICE PER ANNUM $ 771095.34

The contract period will be from 1st October 1984 to 30th September 1988 (inclusive)

We BERKELEY CLEANING GROUP PTY. LTD. hereby tender to the Capital Territory Health Commission under and subject to the attached Conditions of Tender and Contract to perform the services specified in the tender schedule.

The total cost per annum, in words Seven Hundred and Seventy One thousand and Nonety (sic) Five dollars thirty four cents

($771,095.34)"

The second page of the tender schedule gave prices per sq. metre per annum for cleaning floor surfaces as requested in the call for tenders.
The letter accompanying the applicant's tender included a paragraph in which it was stated that "our tender price for the Woden Complex offers an approximate 11% saving on the current costs."
It was the applicant's intention that its price of $771,095.34 per annum should be for the cleaning only of the occupied buildings at the hospital. It took the view, relying upon what Mr Barnsley had been told by Mr Elton, that it was competent for it to submit a price for the occupied buildings only, provided it submitted rates which could be used to calculate the cost of cleaning unoccupied areas should those areas subsequently become occupied and thus require cleaning.
When all tenders were opened it became apparent that the applicant's price was considerably lower than that of any other tenderer. Because the hospital authorities wished to clarify some points in the applicant's tender it asked Berkeley's representatives to attend a conference on 9 August. The applicant's representatives at the conference were Mr Barnsley and Mr Blake. The hospital's representatives were Mr Elton and Mr Martin, the Secretary of the hospital. According to Mr Barnsley one of the first questions the Berkeley representatives were asked was whether it had tendered a price for the cleaning of all the buildings. He said he replied in the negative and stated that his company had tendered on a current occupancy basis and included rates so that its price could be adjusted upwards if a full occupancy price was required. Mr Elton said that he had understood that Berkeley would tender on a full building basis and that he had pointed out at the site inspection that such a tender was required. Mr Martin said that he and Mr Elton had assumed that Berkeley had quoted a price for the cleaning of all buildings, whether occupied or unoccupied, and that by adjusting that price to reflect the existing occupancy levels the actual price the hospital would be paying in the immediate future would be $55,000 less than the total contract price in Berkeley's tender. Mr Barnsley again explained that his company's tender price was for buildings as currently occupied and that it would be increased, not decreased, in accordance with the rates in the tender should a full building price be required. According to Mr Barnsley, nothing was said to indicate that Berkeley's tender price could not be compared with the prices submitted by other tenderers or was, for any other reason, non-assessable. Mr Barnsley's account of the conversation was broadly corroborated by Mr Blake. He said that at no time during the interview was it suggested or stated that the applicant's tender was not assessable or was invalid.
Mr Martin was not called as a witness. However, Mr Elton claimed that during the course of the conversation Mr Barnsley agreed that it was made clear on the site inspection that tenderers were to submit prices on "whole buildings". He also said that Mr Martin said to the applicant company's representatives: "Technically you have tendered incorrectly." Mr Barnsley denied that he had said the words attributed to him by Mr Elton and said he did not recall Mr Martin having spoken the words attributed to him.
Mr Blake gave evidence that during the course of discussion he said words to the following effect to Messrs Martin and Elton:

"You have to realise that our total contract price and rates are maximum prices and that we would expect to make cost savings with the result that the amount to be added to our contract price if the full buildings were to be cleaned may well be less than $50,000."

I accept that Mr Blake made this statement. However it is fair to point out that the imprecision of Mr Blake's estimate of the additional cost necessarily led to the result that Berkeley still had not tendered a precise price for the cleaning of all the buildings.

I accept Mr Barnsley's account of the conversation held on 9 August in preference to that of Mr Elton. However, I do not think the exact details of what was said at the conversation is of great importance. It is clear that during the course of the conversation it emerged that Berkeley's tender price was referable only to the occupied buildings. It is also clear that, up until 9 August, the hospital representatives either believed that the tender price related to all the buildings, whether occupied or not, or were uncertain whether that was the case or not. Certainly they did not understand that Berkeley's tender price of $771,095.34 related to the cleaning of only the occupied buildings.
In my opinion, a fair reading of Berkeley's tender would lead the reader to believe that it was offering to clean for its tender price all the hospital buildings whether occupied or unoccupied. It did not intend to make an offer in those terms. However, I do not think that its tender schedule, referring as it does to all the buildings itemised in the call for tenders, can be construed as an offer to clean only the occupied areas for the tendered price. There being no exclusion of unoccupied areas there is no warrant for excluding them from the buildings listed in the applicant's tender. Whilst the applicant intended that the rates given in its tender should be used to calculate the additional cost of cleaning unoccupied areas, those rates were also a means of calculating the amount to be deducted from the tender price if the hospital did not require unoccupied areas to be cleaned. Thus the inclusion of the rates did not cut down the effect of the language used to describe the buildings referred to in the tender schedule. It is true that the reference to the "11 percent saving on the current cost" in the letter which accompanied the tender might have caused the reader of the tender to wonder exactly what Berkeley's tender referred to. But that reference was not sufficient of itself to cut down the plain meaning of the words used by Berkeley in its tender schedule.
Thus, although I accept that Mr Barnsley was told by Mr Elton that it would be in order for Berkeley to submit a tender price for the cleaning of occupied buildings only with rates to enable a price to be arrived at for unoccupied areas, Berkeley did not submit such a tender. Its representatives made plain at the meeting on 9 August that its tender price of $771,095.34 per annum was not to be taken as being a price for the cleaning of both occupied and unoccupied areas. Insofar as its tender, according to its terms, was an offer to clean all occupied and unoccupied areas for $771,095.34, that offer was tacitly withdrawn at the meeting. In effect, Berkeley amended its tender.
I am satisfied that at the conclusion of the conference of 9 August, Berkeley's representatives had made quite clear to Messrs Martin and Elton exactly what the company had intended to convey by its tender. I am also satisfied that there was no real uncertainty as to the areas of the hospital buildings which were then unoccupied. Mr Elton claimed in evidence that there was still uncertainty in his mind as to the exact areas which Berkeley was offering to clean for their tender price. When asked why he did not clarify this matter at the conference, he said, in effect, that he felt unable to ask questions which would have clarified it because he was not in charge of the conference. I find his evidence in this respect quite unconvincing and I reject it. There is nothing in the evidence to suggest that he was unable to ask any questions which he thought needed to be asked. Although Mr Martin was Mr Elton's superior, Mr Elton said that he was on good terms with him. I am quite unable to accept Mr Elton's evidence that he felt unable to ask questions of Berkeley's representatives because Mr Martin, and not he, was in charge of the meeting. I am satisfied that when the meeting concluded Mr Elton knew exactly what work Berkeley was offering to perform on an annual basis for the sum of $771,095.34. I am also satisfied that he knew that Berkeley had included rates in its tender which could have been used to adjust the tender price to allow for the cleaning of areas currently unoccupied. That being so, I am satisfied that he knew Berkeley's tender was assessable in the sense that it could be compared with the prices of other tenderers whose tender prices were for the cleaning of all buildings, whether occupied or unoccupied.
No challenge could have been made to the propriety of the rejection of the applicant's tender if it had been rejected at this stage. However, it should be noted it was not within the competence of either Mr Martin or Mr Elton to reject the tender. That was the function of either the Tender Committee, to which I shall shortly refer, or the Authority itself.
It is plain that Mr Martin believed Berkeley's tender was assessable and did not share Mr Elton's professed lack of understanding of it because on 10 August he wrote to the Chairman of the Tender Committee recommending that it be accepted. He included in his letter a schedule listing the tender prices of each of the tenderers with appropriate adjustments to make the tenders comparable with each other. It is apparent from the schedule that Berkeley's tender was lower than all other tenderers and substantially lower than Limro's.

It is unnecessary to trace all that transpired between Mr Martin's recommendation that Berkeley's tender be accepted and the awarding of the contract to Limro. On 15 August the Tender Committee wrote to Mr Martin requesting further inform ation on some of the tenders. It asked for an explanation why all the tenders, other than Berkeley's, were on a complete building basis. In reply, Mr Elton informed the Committee that Berkeley had chosen to tender on areas being cleaned as at 1 July 1984. He also advised the Committee:

"Information supplied by Berkeley was not different from that given to other companies - they were instructed to tender on complete buildings."

As will be apparent from my conclusion as to what was said on the site interview, I do not think this was an accurate description of the information supplied to Berkeley by Mr Elton.

The first meeting of the Tender Committee was held on 3 September 1984. At that meeting Mr Elton said that he had difficulty in assessing the Berkeley tender because Berkeley had tendered on occupied areas of the hospital and not on the hospital as a whole. He told the meeting that the specific ation required tenders to be for the hospital as a whole. The meeting decided to send a telex to Berkeley asking it to confirm the basis of its tender. This was done and on 3 September Berkeley replied by Telex stating that its tender was "based on current levels of occupancy in the building (sic) tendered".
Berkeley's reply was considered at a second meeting of the Tender Committee held shortly after 3 September. The Committee decided to seek legal advice as to whether Berkeley's tender was in accordance with the specifications and, if not, whether it could be considered by the Committee.
The Tender Committee again met on 7 September. The members of the Committee were Mr. Reynolds, who is the Director of Finance of the first respondent, Mr Ritchie, the Secretary of the Royal Canberra Hospital and Mr Elton. The Committee had in front of it a Minute Paper prepared by the secretary of the Committee. After referring to earlier meetings of the Committee, and the tender prices of the various tenderers, the secretary made the following observations on Berkeley's tender:

"At the inspection of the complex representatives of all prospective tendering firms were asked specifically to submit tenders based on whole buildings, irrespective of the fact that various sections might presently be unused or unoccupied. Additionally tenderers were directed to calculate a price for the currently unused areas (referred to above as "Deletions") which would be off-set against the overall figure but still forming an important part of the tender on a future basis. It will be seen that each of the other five firms listed above complied with tender specifications and their "Deletions" figure is listed in each case. Berkeley's however, (for some reason not apparent) had disregarded the "Deletions" request and appeared to have tendered only on all occupied areas of the complex. Reference to Berkeley's submitted tender documents was inconclusive as to the exact basis of their price so the Tender Committee directed that a Telex be sent to the company requesting clarification. Berkeley's Telex reply of 3 September stated ('... Tender based on current levels of occupancy'.

The Committee met again on 4 September and its members were unanimous in agreeing that a (sic) Berkeley's tender could not be considered on the ground of non-compliance with the requested specifications. The Committee felt that it was impossible to evaluate the Berkeley tender in comparison to the others as the ignored "Deletions" component was a completely unknown factor.

Prior to the confirmation Telex, Mr R. Hurley, A/g Director of Services, had spoken to Mr R Ruby, A/g Assistant Secretary (Operations) of the Dept. of Admin. Services who had dealt with many Common wealth Govt. cleaning contracts. It was his considered opinion that, in these circumstances, their tender was not assessable and therefore there was no option but for it to be excluded from consideration."

The evidence is not entirely clear as to what legal advice was tendered to the Committee at the meeting held on 7 September. However, it is clear that the Committee was advised, in substance, that Berkeley's tender should not be considered because it was not in accordance with the specific ations of tender. Mr Hurley, a senior executive officer of the first respondent, had earlier been requested to speak to an officer in the Department of Administrative Services with experience in the letting of government cleaning contracts. Mr Hurley informed the Committee that he had spoken to Mr Ruby, a senior officer of the Department of Administrative Services, and sought his advice. According to Mr Ruby, he advised the Committee that Berkeley's tender should not be considered because it was incomplete and did not comply with the specifications. He told the Committee that if it was going to accept the further information from Berkeley then, in his opinion, the Committee should call for fresh tenders.
The Committee adopted a recommendation that the contract for the cleaning of the hospital be awarded to Limro and on 12 September the recommendation was adopted by the first respondent.
It is of importance to observe that according to Mr Reynolds (whose evidence I accept) the Committee agreed not to consider the Berkeley tender further after it had considered the legal advice tendered to it. I think it fairly appears from his evidence that Berkeley's tender was not rejected because it was not considered assessable in the sense that it was not possible to calculate what Berkeley's price would be for the cleaning of all the areas, whether occupied or unoccupied. Rather, it was not considered further after the Committee had received advice to the effect that the tender should not be considered if it was not in accordance with the specifications which had been made available to prospective tenderers.
Limro was not advised that it had been awarded the contract until 12 October 1984. Before Limro was advised of its success, Berkeley's solicitors wrote to the Chairman of the Tender Committee asserting that the tender documents issued to tenderers did not contain any requirement that tenders must be based upon the whole area of the hospital buildings irrespect ive of occupancy. They also brought to the Chairman's attention Berkeley's claim that at the site inspection its representatives had been led to understand that tenderers could tender either on the basis of the area of the whole buildings, or on the basis of the areas presently occupied. Thus it was clear that, notwithstanding what Mr Elton may have told the other members of the Committee as to what was said at the site inspection, the members of the Committee were aware prior to the contract being awarded to Limro of Berkeley's claim that it had been entitled to tender on the basis of occupied buildings only.
On these facts Berkeley seeks judicial review of the decision of the Tender Committee that its tender was non-assessable and should be excluded from consideration. It also seeks review of the Committee's decision that Limro should be recommended to the Authority for the award of the cleaning contract. Further, it seeks review of the Authority's decisions to award the contract to Limro and to enter into the contract with that company. There is much over-lapping of the various grounds upon which the several decisions are attacked. For the purposes of considering the applicant's arguments I think it is unnecessary to attribute them to particular decisions. It is apparent that if the applicant is to achieve success in the litigation it must succeed in its attack on the decision to award the cleaning contract to Limro and it is therefore convenient to consider whether any ground has been made out for setting aside that decision.
Before addressing the several arguments presented by counsel for Berkeley it is necessary to reiterate two matters to which I have already referred. The first is that, in the view I take of Berkeley's tender, its tender price of $771,095.34 was (albeit mistakenly) a price for the cleaning of both occupied and unoccupied areas in the hospital buildings. At the meeting held on 9 August Berkeley made it plain that its tender price related only to the occupied areas of the buildings and to that extent it amended its tender. The second matter is that the Tender Committee did not further consider Berkeley's tender after it had received advice to the effect that it should not be considered because it was not in accordance with the specifications. In my opinion these two matters are of central importance to all the arguments advanced on behalf of the applicant.
It is convenient first to consider the applicant's argument that the Authority failed to take into account a number of relevant considerations when deciding to award the contract to Limro. The relevant considerations were said to include that Berkeley's tender was comparable to other tenders submitted, that it had in fact been compared with the other tenders, that no direction had been given to Berkeley that its tender price was to cover currently unoccupied areas, and that Berkeley had tendered for the cleaning of all the buildings in its tender. In my opinion this submission fails because at the time the Tender Committee recommended that Limro's tender be accepted, the Committee had already determined not to consider Berkeley's tender because it had not been made in accordance with the specifications in the call for tenders. Accepting, as I do, Mr Barnsley's account of his conversation with Mr Elton on the site inspection which preceded the close of tenders, it nevertheless remains the fact that Berkeley did not make clear in its tender documents that its tender price of $771,095.34 was for the cleaning of only the occupied areas of the hospital buildings. After the meeting held on 9 August the Tender Committee correctly did not treat Berkeley's original tender as being a tender for what it purported to be, i.e. an offer to clean both occupied and unoccupied buildings for the price of $771,095.34. What happened was that after 9 August some persons, including Mr Martin, were prepared to consider Berkeley's tender as if it had been amended so that the price of $771,095.34 was referable to the cleaning of only the occupied areas. This was a sensible approach to the situation as it existed, since there were manifest advantages to the hospital in treating Berkeley's tender in that fashion. Not the least of those advantages was the great saving to the hospital which would have been made if the amended Berkeley tender had been accepted. Nevertheless, it is impossible to say that the Tender Committee was obliged to take the same attitude. It was entitled to adopt the view that it should not have regard to Berkeley's original tender since Berkeley had not clarified its terms until after tenders had closed. In one sense Berkeley's tender was not lodged within the time limited for the submission of tenders. Since it was not until 9 August that Berkeley made plain that its offer was to clean only the occupied areas for the price specified in its tender, that was the date of the offer which it desired to have considered by the Authority.
As I have already observed the Tender Committee knew on 7 September that Berkeley's tender price referred only to the cleaning of the hospital buildings as currently occupied. Further, Berkeley's claim that its tender was in accordance with the information given to its representatives at the site inspection was known to the Authority before it actually entered into the cleaning contract with Limro because Berkeley's solicitors had written to the Tender Committee on 24 September putting Berkeley's position in plain terms. But unfortunately for Berkeley the events which occurred after 31 July when tenders closed did not change the situation that, as at that date, it had not submitted a tender which accurately stated the offer it wished to make to the Authority.
Counsel for Berkeley submitted that the Minute which went before the Tender Committee on 7 September contained many inaccurate, and indeed untrue, statements. In particular, it was submitted that the statement that Berkeley had "tendered only on all occupied areas of the complex" was wrong, and was known by Mr Elton to be wrong. A similar criticism was made of the statement in the Minute that it was impossible to evaluate the Berkeley tender in comparison with the other tenders. I see the force of this criticism and indeed, I think much of it is justified. This aspect of the case has caused me concern because it is apparent that the Minute was misleading in important respects. Moreover, Mr Elton did not communicate to the other members of the Committee information which was in his possession. I am satisfied that Mr Elton knew the areas in the hospital buildings which were not being cleaned, that Berkeley's tender included a rate for the cleaning of these areas, and that its tender price of $771,095.34 was referable to the occupied areas. He was therefore able to compare Berkeley's tender with the other tenders. Yet Mr Reynolds gave evidence that, so far as he was aware, Mr Elton did not inform the Tender Committee that Berkeley had in fact supplied a price for the cleaning of areas which were unoccupied. He also said that it was his understanding that Berkeley had disregarded a request to calculate a price for the currently unoccupied areas and that he did not know that Berkeley had provided a rate by which a calculation could be made of its price for the cleaning of unoccupied areas. He also said that the recommendation of the Tender Committee which he supported was based upon the information which had been given to the Committee by Mr Elton.
This evidence discloses a situation which I can only describe as unsatisfactory, to use the most charitable term which I can command. The Committee was considering tenders for the performance of work over a five year period. The work was going to involve the hospital in the expenditure of millions of dollars. It is disturbing that all members of the Committee were not fully apprised of the fact that Berkeley had furnished information which made it possible to calculate its price for the cleaning of all the buildings, and what that price would be.
However these considerations do not alter the position that the Committee was justified in discarding Berkeley's tender, not because it was not comparable with the other tenders, but because in the form in which it was originally submitted it did not clearly communicate what work Berkeley was offering to perform for its tender price and thus did not sufficiently comply with the call for tenders.
It was also submitted that, whilst the Authority could have declined to consider the explanation of Berkeley's tender given after the closing of tenders, having chosen to do so it could not thereafter disregard the tender. I reject this submission because at no stage did the Committee or the Authority do anything which committed them to treat the tender as having been, in effect, retrospectively amended.
In the events which happened, the better course for the Tender Committee and the Authority to have adopted may have been to call for fresh tenders, particularly as the cleaning contract was to run for a period of four years. In the absence of a call for fresh tenders, they were put in the position of either having to pay regard to Berkeley's tender notwithstanding that it had been effectively amended after the close of tenders, or disregarding it with the consequent major financial disadvantage to the hospital flowing from the acceptance of Limro's higher price. However, the circumstance that Berkeley's tender was effectively amended at 9 August was not irrelevant to the Tender Committee's deliberations. Certainly, it was not a matter which the Tender Committee or the Authority was obliged not to consider: cf. Sean Investments Pty. Limited v MacKellar (1981) 38 ALR 363 at p.375 per Deane J. I am of the opinion that no basis has been shown for setting aside the decision to award the contract to Limro because the Authority took into account irrelevant considerations in arriving at that decision.
It was also submitted that the Authority failed to take into account a number of relevant considerations in arriving at its decisions. Those considerations were said to include the facts that Berkeley's tender was comparable to other tenders submitted, that it had in fact been compared to the other tenders, that Berkeley had in fact tendered for the cleaning of all the buildings which the hospital required to be cleaned and that the alleged direction by Mr Elton that Berkeley and other tenderers were to include in their tenders a price for currently unused areas had not been given. I think what I have already said sufficiently answers this submission. The evidence establishes that what the Committee did was to discard Berkeley's tender from further consideration, not because of its inability to compare it with the other tenders, but because of its view that the tender as submitted was not responsive to the specifications in the call for tenders. Had Berkeley made it clear in its original tender that its price of $771,095.34 was for the cleaning of occupied areas only, no problem would have arisen. But having failed to do that and not having clarified the matter until after the date for the closure of tenders, it was not erroneous for the Committee to take the view that it would not further consider Berkeley's tender.
Counsel for Berkeley also argued that the decision to award the contract to Limro was an improper exercise of the powers conferred on the Authority because it was made in breach of s.63F of the Audit Act 1901, which is applicable to the Authority. That section provides, inter alia, that the Authority shall do all things necessary to ensure that all payments out of its moneys are correctly made and properly authorized and that adequate control is maintained over the assets of, or in the custody of, the Authority and over the incurring of liabilities by the Authority. It was submitted that, by failing to have regard to Berkeley's tender, the Authority acted in breach of this section and therefore improperly exercised its powers. I do not accept this submission. The Authority was not obliged to accept any tender, let alone a tender which required explanation after tenders had closed in order to make clear the tenderer's intention.
It was next argued that the decision to award the contract to Limro involved an exercise of power so unreasonable that no reasonable person could have so exercised it. In support of this argument it was urged that at the time the contract was awarded Berkeley's tender was comparable with Limro's and that it was plain that if Limro's tender was accepted the hospital would be committed to pay an unnecessarily large sum for the cleaning of the hospital buildings. When it is borne in mind that Berkeley had been cleaning the hospital buildings for many years to the apparent satisfaction of the hospital authorities it is not easy to appreciate the wisdom of accepting the tender of another cleaning contractor who had no proven record of past performance and whose price was significantly higher than Berkeley's. It was submitted on behalf of the respondents that the importance of maintaining what was described as the integrity of the tender system outweighed the disadvantages of accepting the Limro tender. I am not impressed by this argument, particularly as the Authority made it clear in its call for tenders that it would not necessarily accept any, or the lowest, tender received. Nevertheless, I do not think that the facts establish that the decision to award the contract to Limro was so unreasonable as to attract an order for review on the ground referred to in para. 5(1)(e) of the Administrative Decisions (Judicial Review) Act 1977. It was Berkeley's obligation to make its intentions plain in its tender. It did not do so, and it cannot complain because the Authority declined to treat its tender price as being the price for the cleaning of occupied areas only when, on its face, it did not bear that meaning. Nor can it complain that the Authority did not give it the opportunity of correcting its mistake by calling for fresh tenders.

It was next submitted that there was no evidence or other material to justify the making of the decision to award the contract to Limro because that decision was based on facts which did not exist. The facts were said to be the direction to tenderers to calculate a price for the currently unused areas at the hospital, the direction that the applicant should tender by way of a lump sum price for all areas at the hospital, and that it was not possible to compare Berkeley's tender with the other tenders. A variation of this argument was that the decision to award Limro the contract involved an error of law because it depended upon the exclusion of Berkeley's tender from consideration. Because of the view which I have already expressed as to the reasons why the Tender Committee discarded Berkeley's tender for consideration I do not think that either of these arguments are valid.
For these reasons the application must be dismissed. I will hear the parties on the question of costs.

[1985] FCA 389

14 AUGUST 1985