Procurement in a nutshell – manifest errors: the remedies

Please click here for the remedies judgement.

Please click here for the previous article on this case.

What’s new?

The High Court previously concluded that the Council’s tender evaluation process was fundamentally flawed. That left the issue of the appropriate remedy.

It was agreed by the parties that the Council’s decision to award the contract to European Asbestos Services (EAS) (the original successful tenderer) should be set aside and the Council’s records should be amended with reference to the adjusted scores set by the court. The court also formally declared that Woods Building Services’ (WBS) tender was the Most Economically Advantageous Tender.

The Court then considered WBS’s submissions that it should order the Council to enter into a contract with them or, alternatively, they were entitled to damages. It held that it was inappropriate to order the Council to enter into a contract with WBS because:

• The order was not in WBS’s pleaded case
• Under the Public Contracts Regulations 2006, the court had the discretion to order a mandatory injunction in a public procurement case but only in exceptional circumstances
• Ordering the Council to enter into a contract with WBS which might last for many years would be exceptional and the court declined to do so
• The balance of convenience would make such an order inappropriate in any event – it would be inappropriate to award a contract out of a process which the court had found to be flawed
• Damages would be an adequate remedy

The Court also held that WBS was entitled to damages, although assessment of damages would have to await the re-run of the procurement exercise which could affect quantum.

The court rejected the Council’s submission that damages should not be awarded on the basis that the situation was analogous to a tender process in which the Contracting Authority voluntarily terminated the process without making an award.

It noted that the Council had maintained throughout the case that its evaluation was in accordance with the regulations but that this was not the case and that WBS should have won. As a result, it would be “absurd if, having lost so badly, the Council could avoid the natural consequences of those breaches, namely an award of damages.”

So – the Council will now re-run the procurement.

Why is it important?

The case is significant in demonstrating the court’s willingness to intervene in a procurement process, such that its adjustments to the score are adopted by the Contracting Authority and can change the outcome of the contract award.

The case is also useful in demonstrating how the remedies regime might be applied in such circumstances.

The judge was clear that a mandatory injunction regarding contract award will only be appropriate in exceptional circumstances and it is interesting to note particularly that the court thought it inappropriate to award a contract out of a flawed process.

Finally, the court’s rejection of the Council’s submission regarding damages also demonstrates a reluctance to allow Contracting Authorities to fall back on their discretion not to award a contract where they have defended a flawed procedure.

How can I find out more?

If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.