Procurement in a Nutshell – Hospital’s claim for breach of proportionality and transparency duties struck out
30th August, 2019
The High Court has set out its judgment following a dispute between an NHS Trust (the "Claimant") and a council (the "Contracting Authority") where it was alleged the Contracting Authority had breached the principles of proportionality and transparency when conducting a procurement for three separate contracts to provide sexual health services in Cornwall.
Click here for the judgment in full.
In February the Contracting Authority published a Contract Notice in the Official Journal of the European Union for three separate contracts (the “Contracts”) to provide sexual health services in Cornwall. Having carried out various market engagement events, the Contracting Authority proposed that there would be a financial cap (known as the financial envelope) of £2.5m a year for seven years attached to the Contracts. There would also be an additional £100,000 in the first year for digital implementation.
Tender documents were provided to the Trust on 25 February and on 18 March: told the Contracting Authority that it would not submit a bid. On 9 May, the Contracting Authority awarded the contract to the winning bidder, which resulted in the Claimant issuing proceedings for a breach of regulations in the design of the bid and sought an order to prohibit the Contracting Authority from entering into the contract and requiring them to re-start the process.
The Claimant argued that it was reasonable to extend the 30-day time limit for bringing such proceedings as it took time to investigate and consult to validate its conclusions regarding the contract’s value.
Stuart-Smith J stated that:
“There are two answers to this submission, both of which are fatal to it.
First, On the claimant’s own evidence it had completed its investigations and consultations by 18 March 2019 when it informed the defendant that it would not be submitting a tender. Even if time were extended to start running on 18 March 2019, these proceedings were still brought out of time.
Second, even when the claimant had finished its investigations on 18 March 2019, it had over a week in which to issue proceedings within the 30-day time limit and no reason has been shown why they were not able to do so within that time.”
The Courts ruled that the claim being brought by the Claimant against the Contracting Authority should be struck out. For it to have been an actionable claim, the Claimant would have needed to show that it had suffered or risked suffering loss or damage as a consequence of the breach of duty.
Why is this important?
Should the judge have allowed the claim made by the Claimant, it would open the floodgates to anyone who was an ‘economic operator’ to claim they are owed duties under the regulations, without it being necessary to show it had demonstrated any interest or taken any part in the procurement.
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 0330 137 3451.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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