Council clears the air in procurement challenge

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In a judgment issued earlier this month, the High Court has refused summary judgment to a claimant in a procurement challenge and lifted the automatic suspension on awarding the contract in favour of Newcastle City Council.

The facts

Earlier this year, Newcastle Council, on behalf of itself, Gateshead and North Tyneside Councils, ran a procurement process using a mini-competition to call-off from a CCS framework for the provision of an automatic number plate recognition system (ANPR) to enable the operation of a clean air zone within Newcastle City Centre, parts of North Tyneside and Gateshead.

Tenders were received and on evaluation Siemens was the successful tenderer. Neology, the claimant in this case, was placed 3rd.

Before the Council entered into the contract, Neology issued proceedings in the High Court to challenge the decision to award the contract to Siemens.  This had the effect of placing an automatic suspension of the contracting process on the Council and prevented them from entering into the contract unless and until a court had lifted the automatic suspension.

Neology then applied to the court for summary judgement, in effect to strike out the defence of the Council before proceeding to a full trial, on the basis that there were various errors and flaws in the evaluation of tenders during the process.

The Council’s defended the application for summary judgment and asked the court to lift the automatic suspension, arguing that it should be permitted to enter into the contract and proceed with the clean air zone scheme in line with its obligations under EU air quality directives.

Summary judgment

The Council was successful.  The Judge said that in order to obtain summary judgment without a full trial, the claimant must show that the Council had no real prospect of success at trial.

He said that there was no evidence of manifest errors in the process and Neology’s complaints were more in the nature of disagreements with the scoring than instances of a clear breach of the overriding principles of equality, transparency and proportionality.

In the Judge’s words, Neology came “nowhere near administering the knock-out blow to the defence necessary to obtain summary judgment”.  Where a court grants summary judgment without a full trial, it is clear that there is always going to be a high bar for the claimant to clear to justify depriving the defendant of the chance of defending its position backed by evidence and witnesses at a full trial.

Automatic suspension

In the Council’s application to lift the automatic suspension, it followed the now settled approach of applying the threefold test from American Cyanamid case, namely, is there a serious issue to be tried, would damages be an adequate remedy and does the balance of convenience lie in lifting the suspension taking into account the public interest in maintaining it.

The court was of the view that whilst there was a serious issue to be tried at full trial, damages would be likely to be an adequate remedy. The judge was not convinced by Neology’s arguments that there would be damage to its reputation and impact upon its reputation and ability to fulfil other contracts.

The judge was also of the view that the public interest favoured there being no delays to the implementation of the mandatory clear air zone on Tyneside, which appears to have been a major factor in his decision to lift  the suspension and allow the Council to continue with the award of the contract to Siemens.

Regulation 84 reports

In this case the Judge made some interesting remarks in relation to Regulation 84 reports and record keeping and expressed the view that the courts should not necessarily look behind the evaluation records kept by the Council and interrogate evaluators at trial.

This emphasises the importance of ensuring that the record keeping during a procurement is robust, and clearly evidences the reasoning behind every score awarded by the evaluators.  The report should be enough for an authority to feel confident that it could be used to robustly defend any queries from tenderers in relation to the reasoning behind the awarded scores.

For more information or to discuss any aspect of procurement, please contact Alison Walton on 0191 211 7850 or email [email protected]