October’s case digest includes a number of applications to lift automatic suspensions (including one failure!), as well as details of a bad month for EU institutions being investigated by the European Ombudsman.
Please feel free to submit a comment below or send us an Ask query 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.
Damages not adequate: suspension kept in place (NATS (Services) Ltd v Gatwick Airport Ltd  EWHC 3133 (TCC))
The High Court has ruled that Gatwick Airport should not be able to enter into a new contract for the provision of air traffic control services, pending the outcome of an appeal by NATS (Services) Limited. The High Court found that there was a serious issue to be tried as to whether the Utilities Contract Regulations 2006 applied or, alternatively, as to whether there was an implied tender contract. Gatwick Airport accepted that there was a serious issue to be tried in relation to alleged errors in the procurement procedure.
The High Court also concluded that damages would not be an adequate remedy for NATS. It would be very difficult to estimate the damages arising from NATS’ loss of chance as the alleged errors related to the use of undisclosed, irrational and inappropriate award criteria. Further, the loss of the contract would have a significant impact on NATS’ reputation. By contrast, any losses incurred by Gatwick Airport resulting from the delay could be compensated in damages. Overall, the High Court concluded that the balance of convenience lay in maintaining any automatic suspension or, if the Utilities Contracts Regulations do not apply, in granting an injunction preventing the conclusion of the contract.
For more information on the decision, see Opinion, Suspension maintained: the decision in NATS (Services) Limited v Gatwick Airport Limited.
A serious issue to be tried but damages adequate: suspension lifted (NP Aerospace Ltd v Ministry of Defence  EWHC 2741 (TCC))
After the decision in NATS, normal service was resumed here when the High Court granted an application by the Ministry of Defence (MoD) to lift the automatic suspension on the award of a contract pending resolution of a challenge against a procurement procedure under the Defence and Security Public Contracts Regulations 2011. The High Court considered that there was a serious issue to be tried relating to whether the price of the winning tender was abnormally low and should have been rejected. It concluded, however, that damages would be an adequate remedy for the claimant if it were successful. However, it would not be in the public interest to further delay the contract. Such a delay could have a serious impact on the training and operational capability of the Army. The balance of convenience, therefore, lay in lifting the automatic suspension.
A weak challenge: suspension lifted (Street Lighting Suppliers & Co Ltd v Scotland Excel and Renfrewshire Council ( ScotCS CSOH 145)
Another suspension bit the dust when the Scottish Court of Session granted an application by Scotland Excel and Renfrewshire Council to lift the prohibition in regulation 47(9) of the Public Contracts (Scotland) Regulations 2012 on entering into a framework agreement for the supply of street lighting materials, following a challenge by an unsuccessful bidder. The Court considered that each of the challenges to the procurement procedure was weak. With regard to this and the respective prejudice to councils, the public and successful tenderers (of maintaining the prohibition) and to the unsuccessful bidder (of lifting the prohibition), the Court concluded that the balance of convenience and public interest lay in lifting the prohibition.
Local authority evaluation process upheld (Willmott Dixon Partnership Ltd V London Borough of Hammersmith and Fulham  EWHC 3191 (TCC))
The High Court has dismissed an action by Willmott Dixon Partnership Limited to challenge a public procurement procedure conducted by the London Borough of Hammersmith and Fulham. The High Court rejected claims that new or otherwise inadmissible criteria had been taken into account in the evaluation of the tenderers’ quality submissions. It also found that the evaluation process had been conducted in accordance with the tender documents. Further, the High Court concluded there was no systemic defect in the evaluation process, and no evidence that there had been breaches of the principles of equal treatment and non-discrimination in the marking of tenders.
Early disclosure request premature as defence not yet served (GroupM UK Ltd v Cabinet Office  EWHC 3401 (TCC))
The High Court has given a ruling on an early disclosure application made by the claimant (the unsuccessful tenderer) in public procurement proceedings brought against the Cabinet Office. The High Court concluded that the application was premature as the Cabinet Office had not yet served the evidence which it intended to rely on in an application under section 47H of the Public Contracts Regulations 2006 to lift the automatic suspension on the award of the contract. Further, the Cabinet Office had not yet served its defence. The High Court, therefore, adjourned the application.
Challenge to European Commission investigation into tenderer dismissed (Evropaïki Dynamiki v Commission (Case T-297/12))
The General Court has dismissed an appeal by the Greek company European Dynamics about a claim for compensation under Article 340 of the TFEU for harm to its professional reputation as a result of the European Commission informing European Dynamics’ tender consortium partners that it was investigating European Dynamics for possible breach of contract and data protection laws. The General Court found that the Commission’s letter asking consortium members to reply to a survey, sent as part of its investigation to identify whether mass recruitment emails sent by European Dynamics to external Commission IT consultants had been sent on behalf of European Dynamics alone or on behalf of the consortium led by it, was completely neutral as to the merits of any charges against European Dynamics. The letter was in fact silent as to the nature of any potential infringement and did not prejudge the outcome of the investigation and contained no negative assessment of European Dynamics. Therefore, the letter was not likely to cause harm to the company’s image and reputation.
The General Court also rejected European Dynamics’ claim for compensation following the Commission’s communication to the other consortium members of information about its recruitment policy. The Court found that such information was not confidential and European Dynamics had failed to show how the communication caused it harm.
Appeal against Commission tender process rejected (Euro-Link Consultants Srl and European Profiles AE Meleton kai Symvoulon Epicheiriseon v European Commission (Case T-199/12))
The General Court has dismissed an action that challenged a decision of the European Commission to reject a tender for a project in the Ukraine. The General Court found that the Commission had provided sufficient reasons for its decision to reject the applicants’ tender. The Commission also rejected claims that there had been a substantial procedural irregularity in the evaluation process. In particular, the applicants had not provided evidence to show that a member of the evaluation committee had failed to pass on positive comments about the applicants’ designated team leader for the project. Finally, there was no evidence that, as alleged, the Commission had misused its powers to eliminate the applicants from the tender procedure.
October was not a good month for European institutions being investigated by the European Ombudsman. The Ombudsman:
- Criticised the European Commission for maladministration in the conduct of a procurement procedure. The Ombudsman found that the Commission committed a manifest error of assessment in the award procedure by considering that the successful tenderer had submitted adequate proof establishing the compliance of its goods with a rule relating to their origin at a time when such compliance had not been established. Further, the Commission failed to act in a timely manner and to carry out the required checks as regards the authenticity of the information contained in certificates submitted by the successful tenderer. (Decision of the European Ombudsman closing the inquiry into complaint 1983/2011/(RT)AN against the European Commission))
- Found maladministration by the European Investment Bank (EIB) due to its error in confirming the exclusion of an Italian company from a public tender for the construction of a bridge in Bosnia and Herzegovina. Despite the recommendation of its internal Complaints Mechanism, the EIB had upheld a decision to award the contract to another bidder. It had erroneously concluded that the complainant bidder had proposed a non-compliant construction method. The Ombudsman found that the tender documents did not clearly or unambiguously require a particular construction methodology to be used. Further, the tender documents did not state that rapid implementation was a key requirement so the bid could not be rejected on that basis. The Ombudsman considered that the maladministration by the EIB, which was based on a legally incorrect reading of the tender documents, was particularly serious. The EIB’s maladministration risked putting in question not only the EIB’s own reputation but also the EU’s commitment to strengthening the rule of law in Bosnia and Herzegovina. This reputational damage could have been avoided if the EIB had followed the advice of its own internal Complaints Mechanism. (Decision of the European Ombudsman closing the inquiry into complaint 178/2014/AN against the European Investment Bank)
- Found that the EU Delegation to Turkey committed a manifest error of assessment in the award procedure for a works and supply contract by considering that the successful tenderer had submitted adequate proof establishing the compliance of its goods with the rule of origin at a time when it had not done so. Further, the European Commission had neither addressed the complainant’s concerns about the probative value of the certificates of origin, nor shown that it had made any effort to verify, by means of an appropriate and reliable method, whether the equipment proposed by the successful tenderer fulfilled the applicable rules of origin. This maladministration by the Commission was aggravated by the fact that, despite several complaints on the matter, the Commission did not take the opportunity to amend the wording of the Practical Guide to Contract Procedures for EU External Actions as regards the means of proof of the origin of the goods offered in EU external aid tenders. (Decision of the European Ombudsman closing the inquiry into complaint 1091/2012/(AN)(RT)AN against the European Commission)