Public procurement: Part of the service

Cases concerning the procurement of public goods and/or services seem to be all the rage in the courts at the moment with work scarce and much of it bid for; and even though the Public Contracts Regulations 2006 (as amended) imposes strict time limitations on those bringing a claim, the judiciary, and in particular the Technology and Construction Court (TCC), appears to be on the button with these claims.

First, we can see that the TCC is essentially “hopping” with public procurement cases. With the first half of 2011 just gone, we can report that no fewer than four of the 44 reported decisions in the TCC concern public procurement - nearly 10%. And where a speedy decision is required, the TCC has proved to be up to the challenge.

From September, it looks like procurement cases will be offered a genuine one-stop-shop, fast-track access to justice and by judges who know their onions on tenders

For example, in Halo Trust vs The Secretary of State for International Development, the claimant commenced proceedings in the Chancery Division on 20 December 2010 seeking a declaration that the award by the defendant for the contract of landmine clearance and ordnance disposal services in Cambodia would infringe the 2006 Regulations.

As the proceedings were launched during the “standstill period” (this being 10 to 15 calendar days following the award of the public contract), the defendant was required to refrain from entering into the contract until the “proceedings at first instance” were determined. As a result, the defendant issued its own application to lift the suspension on its ability to let the contract. A decision was therefore urgent as the contract was supposed to be in place by 1 February 2011. The action was transferred to the TCC on 14 January 2011, and by 27 January 2011

Mr Justice Akenhead handed down his judgment. He lifted the suspension and allowed the defendant to proceed with placing the contract with the winning tenderer, having applied the principles and practice of the House of Lords case, American Cyanamid Co vs Ethicon. An ultra-quick turn-around.

Indeed, at a recent event for construction lawyers, two TCC High Court judges confirmed the court’s approach and its ability to swiftly deal with public procurement cases. The TCC is very familiar with cases of this type; those requiring an urgent decision would be well advised to look to the TCC, be it in respect of an injunction or to lift the automatic suspension under regulation 47G(1) of the 2006 Regulations. Furthermore, the judges of the TCC are keen as mustard to move into the Rolls Building this autumn where they will have specialist judges to address such cases, proving that the demand for decisions in public procurement cases can be promptly dealt with.

So, from September, it looks like procurement cases will be offered a genuine one-stop-shop, fast-track access to justice and heard by judges who know their onions on tenders.

Finally, it’s interesting to note that public procurement cases are still very much alive in the Court of Appeal, the recent highlight being Varney & Sons Waste Management Ltd vs Hertfordshire County Council. Here, Hertfordshire council published an OJEU contract notice seeking service providers for contracts of the operation of 18 household water recycling centres. It identified the award criteria as (i) price 65% and (ii) customer service 35%. Varney claimed that it was led to believe by the invitation to tender that other criteria (namely staffing levels) would play a very significant part in the evaluation of the tenders. In consequence, Varney’s tender proposed high levels of good quality staff for each site, resulting in an increased tender price. Ultimately, the council gave staffing levels very little significance when it came to marking tenders.

When Varney was unsuccessful it commenced proceedings claiming that under the 2006 Regulations, the council was required to disclose all sub-criteria and its associated weightings to tenderers in advance of the tenders being submitted.

The Court of Appeal held that the sub-criteria did not (i) alter the criteria for the award of the contract set out in the contract documents; (ii) contain elements which, had they been known at the time the tenders were prepared, could have affected the preparation; and (iii) give rise to discrimination against one of the tenderers. Hertfordshire was therefore entitled not to identify sub-criteria and disclose their weightings.

In summary, public procurement proves to be a hot topic in 2011 and the TCC continues to demonstrate and confirm its ability to deal with such cases and beat the clock.

Simon Tolson is partner in Fenwick Elliott and chair of TeCSA, he co-wrote this article with Stacy Sinclair