The FCA has disputed Ediphy’s allegations that its consolidated tape provider e-auction process experienced a technical fault, and did not register its weighted average price cap (WAPC) bid in round 54.
“It is to be inferred that the claimant’s failure to submit such a bid was either deliberate or caused by carelessness and inattention and/or a failure to put in place adequate safeguards or risk management measures on the part of the personnel in charge of submitting its Round 54 bid,” the regulator alleges.
READ MORE: Ediphy slams FCA for CTP auction chaos
If the auction process had been faulty, the FCA argues, bidders would have either been unable to check the ‘Accept WAPC’ box or click the ‘Confirm Bid’ button, or seen “an incorrect presentation of the screen confirming submission or an ability to download a PDF confirmation.”
If this had been the case, Ediphy should have notified DotEcon before the conclusion of the round as advised in the user manual, the regulator notes.
As no other bidders raised an issue with the process during this round, the FCA argues that there was no technical fault. It adds that Ediphy has not provided evidence of a fault, through either a screenshot of the bid form submission confirmation screen or confirmation that this was seen by personnel.
A PDF copy of the bid confirmation was not downloaded before Ediphy contacted the FCA about its concerns.
“It may therefore be inferred that [FairCT project lead Stewart] Quinn in fact knew, prior to sending the message that the “fairct-b” user had failed to confirm a bid in Round 54,” the FCA alleges.
In the case that the auction had been re-run, and Ediphy had bid to zero as it claims it intended to, the FCA notes that Etrading Software still received a “materially higher” technical score during the assessment summary – 92.75% to 84.78%.
“In the event that the e-auction were re-opened and each of the claimant and ETS submitted a final bid at the same WAPC, the contract would still have been awarded to ETS on the basis that it had achieved a higher technical score than the claimant, which would have been used as a tie-break in those circumstances.”
“Whether and to what extent the successful tenderer in such circumstances could operate the contract without remuneration is not a matter on which the defendant needed properly to take a view, particularly given the successful tenderer would have satisfied the minimum quality standards and other requirements necessary to win.”
Etrading Software states that it has shared a witness statement to the High Court, supporting the FCA’s application to lift the suspension on the contract’s award, and has applied to participate in proceedings as an interested party.
“We will continue to advance preparatory work for the launch of the consolidated tape, while recognising that some activities can only be completed following contract signature and the required authorisations” the company affirmed.
One of Ediphy’s allegations is that the FCA failed to properly handle a potential perceived conflict of interest in the hiring of Etrading Software’s Stephane Malrait.
The issue was flagged during the recruitment process, it added, but: “It is denied that any analysis of Mr Malrait’s potential actual or perceived conflicts of interest undertaken outside the context of the Procurement is relevant to these proceedings.”
“Mr Malrait was not ‘acting for or on behalf of’ the [FCA] in relation to the procurement, such that there was no actual or potential conflict of interest. It is denied that the Defendant owes any duty to avoid the mere appearance of a conflict of interest.”
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