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Procurement in a Nutshell – What effect would the abandonment of a procurement have on any claims already made?

On 24 May 2019, the High Court published its judgment in the case of Amey Highways Ltd v West Sussex County Council [2019] EWHC 1291 (TCC).

The case is interesting in that it examines the implications which arise upon the decision to abandon a procurement process; in particular in relation to whether such a decision would have any effect on any accrued courses of action which had already arisen.

Click here to view the judgment in full.

The facts

The dispute arose after the Claimant (Amey Highways Ltd) was narrowly unsuccessful with its bid to be awarded a contract which was known as the “Highways Term Service Contract 2018-2028” (“the Contract”). As a result of this decision, the Claimant brought an action alleging that its score should have been higher than the successful bidder’s.

Consequently, the Contracting Authority gave notice indicating that it was “terminating” the procurement in the hope that this action would defeat any claim brought by the Claimant before allowing it to start the procurement again.

In addition to various other points of law, one of the issues to be determined by the Court was:

  • What was the effect of the abandonment decision on any existing claims?

What did the judgment say?

First, it is important to note that the Court held that the Contracting Authority did not act “manifestly erroneously” by taking the abandonment decision and nor did it breach its obligations of equal treatment and transparency as set out by the Public Contracts Regulations.

However, contrary to this, the Court emphasised that the abandonment decision had no effect in relation to any causes of action which had arisen prior to the date of this decision.

In this regard, noting the difference between a claim which might arise and an already accrued cause of action Mr Justice Stuart-Smith explained:

“An accrued cause of action is fundamentally different from an inchoate claim that might become enforceable at some future date. It is axiomatic that an accrued cause of action may be regarded as property, as an asset…

There is a fundamental difference between the effect of an abandonment decision being (a) to prevent further causes of action accruing in the future (which is uncontroversial) or (b) to deprive an economic operator of a cause of action which already exists and which he is entitled to enforce before the decision is taken. There are no terms of the Public Contracts Regulations which expressly or by necessary implication mandate this second, more radical, effect.”

Why is this important?

It is relatively commonplace that unsuccessful bidders will bring challenges to public procurements. However, this case emphasises that a decision to abandon a procurement will not act as a successful method of defeating any challenges where an accrued course of action has already arisen. Although the decision to abandon and restart the procurement process could not itself be challenged, the Contracting Authority still faced the prospect of action from the Claimant.

If you have any queries in relation to the above, or in relation to any other aspect of procurement law, please do not hesitate contact 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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