Mears wins damages after losing out on £400m job

Mears has been awarded damages after failing to make the shortlist for a tender for social housing improvements and repairs work for Leeds council.

The social housing contractor sued the authority after it failed to make the top three in the tender for the contract and questioned the transparency of Leeds council’s tender process.

The level of damages due to Mears will be assessed at a later date.

The tender for 38,500 homes, worth an estimated £40m a year for up to a decade, was last week put on hold by Leeds pending the court’s decision.

High Court judge Mr Justice Ramsey found Leeds had breached its obligation to be transparent by failing to notify tenderers of the weighting for marking questions in pre-qualification questionnaires.

Ramsey said this omission meant Mears “lost the chance of being included as one of the top three tenderers.”

But the judgement found Leeds had not committed further breaches with regard to disclosure of other assessment criteria.

Despite the award of damages it is thought Mears, which hoped to see the tendering process re-run, is considering appealling the decision.

Ramsey decided against re-running the process because the public interest in getting the contract awarded quickly outweighed the damage to Mears.

The case comes amid evidence that contractors are becoming increasingly litigious over contract awards, as competition for work increases.

Totis Kotsonis, of counsel at Norton Rose, said: “This is yet another case based on the failure of the tendering authority to disclose criteria.

“A lot of contractors have caught on to the fact this is illegal and we’re seeing more and more cases.

“This is another indication the rules are becoming much tighter.”

However, Rupert Choat, partner in CMS Cameron McKenna, said: “There has been an increased number of procurement challenges but it’s a very unusual for Great Britain for a contractor to challenge a public authority.”