Procurement in a Nutshell: Ecolog International FZE v Secretary of State for Defence for the United Kingdom of Great Britain & Northern Ireland [2026] EWHC 2154 (TCC)

However, by inviting that bidder to negotiate, the contracting authority entered into a limited implied tender contract, requiring it to evaluate the bidder’s tender in good faith. The duty did not include an obligation to conduct the procurement fairly, equally or transparently whether under the invitation to negotiate or the Regulations themselves.

Case facts

The Ministry of Defence (MOD) advertised the procurement in May 2020 through a contract notice stating that the procurement would be conducted in accordance with the Defence and Security Public Contracts Regulations 2011. Regulation 5(2) required contracting authorities to treat economic operators from the EU, Norway and Iceland equally,

The tender documents comprised a pre-qualification questionnaire (PQQ) and an invitation to negotiate (ITN). Only the claimant, a United Arab Emirates (UAE) company (not covered by Regulation 5(2)), and a UK company (S) submitted final bids. The contract was awarded to S, and the claimant alleged the MOD had failed to treat it equally. However, as a UAE company, the claimant could not bring a direct claim under the Regulations.

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Held

The preliminary issues were determined in favour of the defendant.

Creation of an implied contract

The procurement started before Brexit, meaning the Regulations applied to tenders only from eligible states, which did not include the United Arab Emirates.

However, the defendant was still entitled to invite tenders from non-eligible state suppliers on the basis that it would deal with their tenders as though the Regulations applied but they did not confer any direct rights under the Regulations.

No implied contract arose when the claimant submitted its completed PPQ as it expressly stated that only the terms of the written contract would have a contractual effect.

However, it was held that by issuing the ITN to the claimant, the defendant impliedly offered to consider any tender submitted by the claimant, suggesting that any such consideration would be conducted in good faith. As such, this gave rise to an implied tender contract.

Terms of the implied contract

The claimant had no rights under the Regulations, and the tender documents did not demonstrate any intention by the defendant to enter into a broader tender contract or to treat the claimant as though they were entitled to the protections afforded by the Regulations.

The court held that the defendant’s decision to follow the Regulations as a matter of good governance did not create a contractual obligation to extend those duties to the claimant.

A broader contract was not necessary to make the procurement process workable, nor did the duty to treat the other bidder equally require a corresponding duty towards the claimant.

The claimant argued that the duty of good faith required the procurement to be conducted fairly, equally and transparently in accordance with the ITN and/or the Regulations, but the Court held that the duty was only to consider the claimant’s bid in good faith and did not extend to the broader duties of fairness, equal treatment or transparency.

What does this mean going forward?

Contracting Authorities can be confident that statutory protections will not apply to bidders from states that are not expressly protected by procurement rules. However, allowing such suppliers to participate can create contractual obligations with an implied duty of good faith, even where statutory procurement remedies are unavailable.

For further information please contact Tim Care or Melanie Pears in our Public Sector team.