After a Summer break, our public procurement case law digest returns with a look at cases on a variety of subjects including the latest fallout from the Legal Services Commission procurement.
Please feel free to submit a comment below or contact us at: feedback@practicallaw.com if you have any views on the cases covered or think that we have missed a case that should be brought to the attention of public procurement practitioners.
Lower standards for larger procurements? (Hossacks (A Firm of Solicitors) v The Legal Services Commission [2012] EWCA Civ 1203)
The Court of Appeal has refused a claimant permission to appeal an order that dismissed their application for judicial review of a decision by the Legal Services Commission (LSC) to reject its tenders for the provision of legal services relating to community care. The Court of Appeal considered that the appeal had no prospect of success and therefore refused permission to appeal.
Perhaps the most interesting aspect of this judgment is the court’s acceptance of the LSC’s argument that the scale of a particular tender exercise may well be relevant in assessing whether, and if so to what extent, the actions of a contracting authority in a given case are reasonable, proportionate and otherwise compliant with the rules laid down (this tender exercise involved some 2,000 tenders). However, the court held that it was not necessary to take into account the size and scale of LSC’s tendering exercise in this particular case.
Too late to turn back (Turning Point Ltd v Norfolk County Council [2012] EWHC 2121 (TCC))
The High Court has struck out an action alleging breach of the public procurement rules in a tender for various drug and alcohol treatment services. The High Court found that the claims alleging breach of the procurement rules (due to the alleged failure of the council to provide adequate or complete information in the tender documents) had not been brought in time. Turning Point knew of the circumstances giving rise to the alleged breaches by the time it submitted its tender, which was more than 30 days before it brought its claim. The High Court did not consider that there was good reason to extend the 30-day time limit in this case. The court also found that Turning Point had added a caveat to its tender, which was not permitted by the tender documents and struck out Turning Point’s arguments claiming breach of an implied contract in relation to the conduct of the tender procedure. It did not consider that any of the implied terms relied on by Turning Point existed.
The case is a good example of the position that has now been reached where, due to the limitation period, it is unlikely that a mistake made by a contracting authority early in a procurement process will be able to be challenged by a provider that does not seek to challenge until the procurement process has been completed. It will be interesting to see if we start to move to a phase of greater challenge during the course of procurement processes.
Public law trumps contract (R (A) v Chief Constable of B Constabulary [2012] EWHC 2141 (Admin))
A contract case as opposed to a public procurement one, but still interesting for those involved in procuring public contracts. In this case, the High Court rejected a police authority’s argument that it was not required to provide reasons for its refusal to authorise a sub-contractor following a vetting process on the basis that the contract did not require it to do so. Applying the test set out in R (Tucker) v Director General of the National Crime Squad [2003] EWCA 57, the court held that the authority was carrying out a public function and, whatever the contract said, was subject to the public law duty to give reasons. The judge was clear that he did not accept that a public authority could by contract lawfully reduce the extent of the duty to act fairly that would otherwise be imposed by public law. Many public contracts will have provisions in them exempting the authority from providing information in certain circumstances, this case suggests that relying on such a provision could be open to challenge.
Ombudsman upholds approach taken by Commission to complaint about Greek motorways procurement (complaint 483/2011/(ANA)CK)
The European Ombudsman has upheld the European Commission’s decision to close its file in relation to an alleged infringement of the public procurement rules by the Greek authorities. The Ombudsman concluded that the Commission had been correct to close its files as the issue had become devoid of purpose given that the works under the contracts at issue had been fully completed. Further, the Commission had explained to the complainant why it considered that the Greek authorities’ response to its inquiries was satisfactory and also was entitled to take the view that some of the complainant’s allegations were unsubstantiated.
Something from a little further afield…
Denmark to be precise, where the Danish Supreme Court has held that the Danish Coastal Authority has infringed the public procurement rules and, for the first time, has awarded damages to a foreign tenderer. The court concluded that a flawed process had been followed and the authority was liable for damages for the loss of profit suffered by an unjustly rejected German tenderer. The damages were assessed to be a total of DKK4 million, which by our calculations equates to around £400,000 – a considerable sum.