Procurement in a Nutshell – Costs of an adjourned application to lift an automatic stay in public procurement proceedings

The facts

The Claimant provided a range of enforcement and parking services to local authorities, including Oxfordshire County Council. On 13 June 2019, the Claimant issued a claim against the Local Authority and the Local Authority was automatically stayed from entering into the contract with the successful bidder.

The Local Authority’s application to lift the stay was issued on 1 July 2019. The next day, the Claimant stated that it was appropriate for the courts to have expedited the trial instead. The Local Authority rejected this contention on the basis that there could be no trial before September 2019, which was the date that the new contract with the successful bidder was going to commence. In response to this, the Claimant agreed that it would be willing for the current contract to be extended.

The day before the hearing of the application to lift the stay, the Local Authority decided to explore avenues and agreed that the application to lift the stay should be adjourned to a future date, and that the trial should be expedited. It was likely that the trial wasn’t going to take place until early 2020.

The Claimant submitted that it was entitled to the costs of the adjourned application to lift the stay, and its application to expedite the trial.  It was submitted by the Claimant that by early July, it had set out its position that the trial should be expedited rather than the stay lifted, and had offered that the current contract could be extended to avoid a break in the provision of parking services, but that the Local Authority had not engaged until later.

The Local Authority responded by stating that the first offer had been unclear and unsatisfactory. In response to this, the Claimant submitted that the Local Authority could have requested clarification, something that it did not do.

The judgment

The Judge in this case found that the original offer made by the Claimant had been vague in the extreme. Their offer simply said that extended services could be provided without clarifying what the services were or what the pricing model would be. The Judge found that the Local Authority could not be criticised for not making inquiries, and even if it had, all it would have done was open a period of negotiation, which may not have been successful. The Local Authority had been entitled to continue to prepare an application to lift the stay.

The application had been adjourned, not abandoned and therefore it would be wrong to award costs to the Claimant. The appropriate costs order was costs reserved.

The application for expedition, with which the Claimant was ultimately successful, was related. The application had been made on the basis that there was no need for the application to lift the stay to be pursued. Although the Claimant had been successful, the order as to costs should be the same as on the application to lift the stay, namely costs reserved.

Why is this important?

From the outset of this case, the Claimant should have submitted a detailed offer including their financial model. The Local Authority were not penalised for their lack of questions to clarify the offer as it was in the Claimant’s best interest to lay out exactly what they were offering from the start. It demonstrated that Claimants have a duty to proceed quickly and transparently.

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.