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Procurement Summer Case Law Catch-Up

Unless your summer holidays were spent on an internship in Brussels it is just possible that you have missed out on some of this summer’s ‘blockbuster’ decisions. So here’s a recap of the top 5 cases you may have missed: 

1. Woods Building Services v Milton Keynes Council 14 July 2015. (Part 1) - "That which can be asserted without evidence, can be dismissed without evidence" 

This summer’s most interesting decision was the unfortunate case of Milton Keynes’ council’s procurement for asbestos removal and re-instatement services. This is a ‘must see’ not because there was a clear, but unacknowledged, conflict of interest on the part of one of the evaluators, nor because the winning bid had (allegedly) benefited from plagiarised material. The use of undisclosed criteria was noted but the main interest here was firstly that in concluding that there had been ‘manifest error’ in the evaluation and scoring of bids the court substituted its own view of what marks should have been awarded and secondly that the complete failure of the evaluation to record the reasons for the actual marks awarded left the contracting authority with no evidence of why it had done what it had done.

Although it is very unusual to see a court substituting its judgment for that of the evaluators it clearly felt that the errors were so obvious that it was entitled to do so. A major factor in this must have been the absence of any contemporaneous record of how the evaluation conclusions had been reached and it highlights (again) the absolute importance of keeping contemporaneous records of the conclusions reached during the evaluation process.

2. “The only true wisdom is knowing you know nothing”- Fox Building & Engineering Ltd v The Department of Finance And Personnel 17 June 2015


This was a challenge in Northern Ireland relating to the issue of abnormally low bids. The Claimant suspected that a winning bid had not priced all the items in the pricing schedule (or had done so at purely nominal amounts) producing an unsustainably low bid. However, as is typical in procurement claims the information to ascertain this was solely in the contracting authority’s possession. The court was concerned here with balancing the need for the Claimant to see documents which might prove its claim early on in proceedings and preventing a ‘fishing expedition’ for documents to bolster an otherwise weak claim. The court agreed that early disclosure was appropriate here having determined that there was a reasonably arguable prima facie case. However, wholescale disclosure was not permitted. Instead, a confidentiality ring was agreed with a restriction permitting a record of the nominal bidding to be disclosed rather than whole documents.

3. “Don’t find fault, find a remedy”- Woods Building Services v Milton Keynes Council 14 July 2015 (Part 2)

Unlike Hollywood you do not have to wait a further year for the sequel in procurement law. Having found that the Council had committed ‘manifest errors’ in its evaluation of the winning bid for asbestos removal (see above) the court then had to consider the appropriate remedy.
Following judgment, it was agreed that the original decision by the Council would be set aside and that the formal record should show the court-adjusted scores. The court also declared that the Woods’ tender was the most economically advantageous. However, Woods also sought an order that it should be awarded the contract or alternatively damages.

It is common to see Claimants asking for an order that they be awarded the contract in place of the ‘winning’ bidder. However, Woods had not initially sought such a remedy and the court considered that it could not grant a remedy that had not been requested. More significantly, the Regulations applicable to remedies had not identified contract award as a possible outcome. This did not necessarily rule it out but a mandatory injunction to award the contract would require exceptional circumstances in order to be justified. No such exceptional circumstances applied here. Moreover, the tender evaluation process had been found to be flawed so it would be inappropriate to award a contract arising out of such a flawed process.

The court concluded that damages would be an adequate remedy but deferred any decision on assessment of those damages until after the re-run procurement.

4. “Uncontrolled variation is the enemy of quality”- Edenred (UK Group) Ltd v HM Treasury 1 July 2015

This case is too complicated to summarise into a few lines. The essence of the decision, however, is that is possible to vary or modify an existing contract and that it is possible to provide for this in the initial procurement documents although it would require close scrutiny of the OJEU notice, procurement documents and subsequent contract.

The point of greatest general interest arising from the case, however, was that it was accepted that the 2015 Regulations apply to the proposed modification despite the fact that the original procurement was under the old Regulations and that the challenge had been brought under the old Regulations. The decision to apply the 2015 Regulations to a variation/modification which would take place after February 2015 was consistent with Cabinet Office guidance at the time the Regulations were brought in although that guidance had no obvious basis in law. We understand that it was conceded by the government before the Supreme Court that the 2015 Regulations should apply and no legal argument was heard on the point.

5 . “No secrecy no business”- Sally Ballan v Information Commissioner August 2015

We posted a separate blog about this case on 14 August. The decision is noteworthy because it maintained confidentiality in bids from a long-concluded procurement process and held that the protection of commercial interests exemption under the Freedom of Information Act included the commercial interests of the contracting authority itself.

About the Author

Helen Prandy works in all areas of commercial litigation with a particular interest in contentious procurement. Her work is very varied ranging from the traditional, such as complex litigation in the High and Appellate Courts, arbitration and mediation, to the less obvious such as helping with strategic decisions relating to a client’s business, risk management and advice in connection with specialist tribunals, such as the NHSLA and even the coroner’s court. Helen can be contacted on +(44)(0)1223 222344 or Helen.Prandy@mills-reeve.com or Mills & Reeve LLP.

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