Procurement news blog
September 27, 2016 2:17 PM | Posted by
Beresford-Jones, Jenny |
The Crown Commercial Service (CCS) has just published a procurement policy note containing statutory guidance on the selection stage and an updated version of its standard pre-qualification questionnaire. This is mandated for use in over-threshold procurements by virtue of Regulation 107.
Why was a new PQQ document needed?
The old PQQ needed updating in order to fit together with the requirements of the European Single Procurement Document (“ESPD”). There has been an obligation on contracting authorities to accept ESPDs since January of this year and of course a mismatch has arisen between the standard form ESPD and the CCS’s PQQ. The ESPD allows suppliers to simply self-certify that they meet the requirements, with the contracting authority seeking evidence of this only from the winning bidder at the end of the process. The new document is aligned with the ESPD.
Key points to note
- The “Pre-Qualification Questionnaire” (PQQ) is now known as a “Selection Questionnaire” (“SQ”).
- Authorities should stop using the old PQQ and start using the SQ with immediate effect. The guidance is silent on the question but we assume this instruction is in relation to new SQs being issued and there is no requirement to recall PQQs that are already being used in a current procurement.
- The SQ is structured in three parts, not dissimilar to the old PQQ. Part 1 of the standard SQ covers the basic information about the supplier. Part 2 covers a self-declaration regarding whether or not any of the exclusion grounds apply. Part 3 covers a self-declaration regarding whether or not the company meets the economic, financial, technical and professional selection criteria. There then follow some "additional" questions at the end of the document.
- The exclusion grounds in the SQ now correlate to those in the latest version of the Public Contracts Regulations 2015 and in the ESPD (e.g. including, where applicable, exclusions around the Modern Slavery Act 2015).
- Contracting authorities will need to brief potential candidates on how they can access the SQ and submit their responses. The guidance envisages three options (1) include all three parts of the SQ with the procurement documents; (2) direct suppliers to the Commission's EU-ESPD service for parts 1 and 2, and include standard selection questions separately within the procurement documents; or (3) provide access details to an e-procurement system that asks the same questions as listed in the standard SQ plus any procurement-specific questions.
- Self-certification declarations are required as part of the selection stage not only from suppliers but also from any other supplier being relied on to meet the selection criteria. The guidance reminds contracting authorities of the "self-cleaning" procedure which allows suppliers who have breached the criteria to demonstrate that they have "righted their wrongs".
- Contracting authorities must accept self-certifications via the EU-ESPD template, even if this is in the format adopted by another member state.
- Evidence of compliance need not be requested until award stage (although the winning bidder's evidence must be checked prior to award). That said, evidence may be requested at an earlier stage if the contracting authority decides this is necessary.
- Deviations are not permitted from Parts 1 and 2. You can deviate from Part 3 provide you report. The guidance says you must report:
- changes to the wording of the standard questions and instructions; and
- additional questions that are included which are not specific to the individual procurement.
- Helpfully, the guidance confirms that additional questions which are specific to the procurement do not need to be reported, nor does the decision to leave out a question or tweak wording to make it compatible with e-procurement systems. You only need to report once (which is helpful for those authorities wishing to report an on-going deviation in their standard form SQ).
- The prohibition on holding a separate selection stage for under-threshold procurements remains.
- The guidance notes that, while completing parts 1 and 2 is not mandatory for over-threshold 'light touch regime' procurements for health, social and other services, nonetheless it would be good practice to exclude a supplier against those criteria in any event, and recommends that parts 1 and 2 are used even where the procurement is light touch, together with part 3 around economic and financial standing and technical and professional capacity.
- Interestingly, the SQ no longer contains the "additional PQQ modules" on, for example, Health and Safety, Environmental Management or Compliance with Equality Legislation that used to feature at the end of the old PQQ. Instead, additional modules on e.g. Steel, skills and apprenticeships are set out, to be included depending on whether the relevant policy in those areas applies to the contracting authority in question. Presumably, however, the old additional modules could still be included in the additional modules section if desired.
September 16, 2016 12:17 PM | Posted by
Souter, Katherine |
Yes, apparently you do!
The ECJ has just handed down a preliminary ruling on request of the Danish Supreme Court in Finn Frogne A/S v Rigspolitiet ved Center for Beredskabskommunikation Case C-549/14.
In short, this is a surprising decision and one which may cause difficulty for contracting authorities and disputes lawyers. The inference from this decision seems to be that, unless the terms of a settlement, agreed between a contracting authority and a supplier who are embroiled in a commercial dispute over a public contract fall within the remit of:
(1) Regulation 72 “modification of contracts during their term”; or
(2) Regulation 32 “use of the negotiated procedure without prior publication”,
then it is possible for the terms of that settlement to itself constitute an illegal modification to a public contract which should have been advertised and procured under the procurement rules (with possible consequences of ineffectiveness of the settlement and damages to the aggrieved third party supplier).
Facts of the case
The Centre for Emergency Communication of the National Police in Denmark (CFB) awarded a contract to Terma for the supply and maintenance of a communications system for all emergency response services worth around €70m. A dispute arose between the parties relating to delivery times. The parties agreed a settlement of that dispute which involved reducing the scope of the contract to:
• the supply of a radio communications system for regional police worth under €5m;
• the sale of two central server farms to CFB worth under €7m (Terma had purchased the latter for the purpose of leasing the servers to CFB under the original contract).
The parties waived all other rights from the original contract as part of the settlement. CFB published a VEAT notice in respect of the settlement and Frogne (who had not been involved in the original procurement exercise at all) brought a challenge to the settlement on the basis that it constituted a material amendment to the original contract and should have been competed under the procurement rules.
The Danish Supreme Court then referred a question to the European Court of Justice (ECJ) for interpretation of the procurement rules, asking whether the procurement rules must be interpreted as meaning that, following the award of a public contract, a material amendment cannot be made to it without a new tendering procedure being initiated, even in the case where the amendment is objectively a type of settlement agreement where both parties agree to mutual waivers designed to bring an end to a dispute with an uncertain outcome, which arose from the difficulties encountered in the performance of that contract.
Decision of the Court
The Court decided that:
- an amendment of a contract consisting in a reduction in its scope may result in the contract being brought within reach of a greater number of economic operators (particularly smaller economic operators who may not have otherwise qualified for the larger original contract);
- it was irrelevant that the settlement agreement did not arise from the desire of the parties to renegotiate the essential terms of the contract, but instead out of objective difficulties with unpredictable consequences encountered in the performance of that contract. Contracting authorities can opt for a direct award of a contract, that is to say, negotiating the terms of the contract with a selected economic operator without prior publication of a contract notice, only in the circumstances expressly referred to in the procurement rules (in the UK these are contained in Regulation 32 “use of the negotiated procedure without prior publication”); and
- contracting authorities may retain the possibility of making amendments to a contract after it has been awarded, on condition that this is provided for in the documents which governed the award procedure. By expressly providing for the option and setting the rules for the application of them in those procurement documents, the contracting authority ensures that all suppliers interested in participating in the procurement procedure have been made aware of that possibility from the outset and are therefore on an equal footing when formulating their respective tenders. The position would be different only if the contract documents provided for the possibility of adjusting certain conditions, even material ones, after the contract had been awarded and fixed the detailed rules for the application of that possibility.
Our first thought on reading this case was to consider whether we should update dispute resolution clauses in public contracts to provide expressly for this kind of settlement, and thus try to ensure that any settlement is a "permitted modification" because it has been clearly precisely and unequivocally set out in the original contract. However we soon discounted this strategy as unfeasible: we don’t think a general term permitting modification as part of a settlement would be capable of ever being specific enough for the particular circumstances in which it was ultimately used.
This case also serves as a reminder that material changes to public contracts can relate to reducing the contract scope as well as increasing it.
This case was a reference for a preliminary ruling, which the Danish Supreme Court requested from the ECJ to aid the Danish Court’s interpretation of European derived law. Similarly in the UK, our courts must still refer to and use ECJ jurisprudence when deciding matters derived from European law, but once the UK has left the EU, the UK Courts may not still be bound and may decide not to follow the decision.
Finally, if you are wondering, “what is a VEAT?” you’ll find the answer here on our procurement portal.
by Katherine Souter - click here for more about Katherine
August 17, 2016 3:12 PM | Posted by
Prandy, Helen |
A High Court judge has issued a warning to contracting authorities who might be tempted to minimise the amount of paperwork they keep particularly where they fear that a high profile procurement exercise might be challenged.
In finding that a contracting authority had made “conscious decisions” in relation to sparse record keeping the judge noted that serious consideration appeared to have been given to restricting the keeping of contemporaneous records of evaluation because it was known that these would be disclosable in litigation. The court took the view that if the evaluation process is performed in accordance with the obligations under the Regulations then they would present no danger to the Authority because they would constitute an ‘audit trail of the decision making'.
He also went on to find that a proposed destruction of notes relating to the evaluation was extremely worrying given the express obligations of transparency on public authorities under the Regulations.
In the absence of adequate contemporaneous documents a court is forced to rely on the recollection of witnesses. Documents may be embarrassing but the memory of witnesses is extremely unreliable and is just as likely to lead to an ‘embarrassing’ revelation. In this most recent case the witness most closely involved with the evaluation admitted on cross examination that he did not accept that inconsistency in evaluation of bids might amount to unequal treatment.
The judge found the almost complete absence of documents relating to a critical dialogue phase of the procurement and a reliance solely on the memory of witnesses to “verge on the incredible”.
The case arose under the 2006 Regulations and there is a requirement now under Regulation 84(8) of the 2015 Regulations to keep “sufficient documentation to justify decisions taken in all stages of the procurement procedure…” and to do so for a period of at least 3 years from the date of the award.
This case is not the first where a deliberate failure to keep documents has created problems for a contracting authority. However tempting it might be it is always far better to have a clear audit trail of reasons for evaluation decisions at every stage, including moderation, and for that audit trail to be in writing.
Case: EnergySolutions EU Limited v Nuclear Decommissioning Authority  EWHC 1988 (TCC). A link to the judgment is here.
by Helen Prandy
July 29, 2016 10:05 AM | Posted by
Prandy, Helen |
The famous historian Thomas Macaulay apparently noted that Frederick William I of Prussia, a man not short of a bob or two, was known to have saved 5 or 6 reichsthalers (coins) a year by feeding his family unwholesome cabbages even though the poor diet sickened his children and the resultant medical care cost him very much more than he saved. The false economy of such an approach is obvious but its lure remains and very often becomes an issue in litigation.
It is no secret that legal proceedings can be expensive. A big loser in the previous government’s austerity project was the Ministry of Justice whose budget has faced a huge reduction. This has meant that alternative means of funding had to be found leading to a very significant increase in court fees. In March 2015, the cost of issuing a claim where damages were expected to be in excess of £200,000 rose to £10,000.
In a public procurement context it is very easy to see how damages for the failure to win a substantial public contract could be in excess of £200,000. Unlike most litigants, however, a Claimant in a public procurement case only has a maximum of 30 days (and perhaps as little as 10 where a standstill period is not extended) in which to decide whether to bring a claim and that frequently means that Claimants are immediately faced with the prospect of paying out a substantial and irrecoverable court fee without having any real idea of the strength of their case.
It is hardly surprising therefore that some Claimants choose to issue proceedings seeking only a ‘declaration’ that the process was in breach of the Regulations. *Until recently that cost just £480. Once issued, however, it is not uncommon for the claim to be amended to seek damages once more is known about the merits.
Like Frederick William’s cabbages such an approach is undoubtedly superficially attractive (at least from a cost if not a dietary point of view) but there are significant risks.
Firstly if you issue a claim for a declaration only and a Contracting Authority succeeds in lifting the automatic suspension then there is effectively no further remedy as the claim has not been issued for damages. Result: the claim fails and you pay the Authority’s costs and your own.
Secondly, the courts have taken a very strict line with Claimants deliberately issuing at a low fee and then seeking to amend to claim damages once those proceedings are up and running. That has been held to amount to an abuse of process and could lead to the court striking out the claim. Result: the claim fails and you pay the Authority’s costs and your own.
Thirdly, and most significantly in a procurement context, claims are only regarded as ‘brought’ within a limitation period where the Claim Form is delivered along with the “appropriate fee”. Where the incorrect fee is paid then a claim will not be considered to have been brought in time for the purposes of limitation. Where the limitation period is very short, as it is in procurement cases, that would mean that a court would consider that any claim for damages has not been brought in time where only the fee for a declaration is paid on issue. Result: the claim fails and you pay the Authority’s costs.
This case law has not yet been tested in a procurement context but is likely to be followed. At the very least it is likely to tie the claim up in expensive, satellite litigation.
A far better approach would be to pay a realistic fee for damages (the fee for claims up to £199,999 is 5% of the claim value) based on a reasonable and justified assessment of the facts at the time of issue and then present a cogent case to the court if amendment is subsequently needed. Result: the prospect of success, an award of damages and the Authority has to pay your costs as well as its own. Much better than cabbages!
by Helen Prandy (click here to see Helen's profile)
*From Monday 25 July 2016 the cost of seeking a declaration has increased to £528.
July 25, 2016 2:53 PM | Posted by
Beresford-Jones, Jenny |
The Crown Commercial Service has just issued a new PPN around publishing information to its Contracts Finder website. It reminds contracting authorities of the obligations to place information about contract opportunities and awards on Contracts Finder, and it may suggest that there is a feeling at the CCS that too many authorities are failing to meet their obligations in this area.
As a reminder, where a contracting authority chooses to advertise a contract opportunity valued at over £10,000 (for central government authorities) or £25,000 (for other contracting authorities), then the advertisement must be placed on Contracts Finder. If a contracting authority does not choose to advertise the opportunity (perhaps it simply seeks three quotes or approaches a supplier directly) then there is no obligation to advertise on Contracts Finder.
The text of the new PPN could be potentially be read as suggesting that all opportunities over those thresholds must be advertised, but this is not actually the case; the advertisement must be made on Contracts Finder only if the contracting authority decides to advertise that opportunity. On a closer reading, the new PPN bears this out - it links (at footnote 1) to earlier CCS guidance here, where it is clearly stated at paragraph 4 that the obligation only applies where the authority has decided to advertise.
The situation is different for publication on Contracts Finder of contract award details (as opposed to opportunities). Award details must be published for all contracts (whether these were originally advertised or not) that are over the £10k/£25k thresholds mentioned above (unless one of the exemptions apply).
For completeness, a reminder too that these Contracts Finder requirements do not apply to the procurement of health care services for the purposes of the NHS, nor to procurements run by maintained schools or Academies.
June 28, 2016 12:11 PM | Posted by
Beresford-Jones, Jenny |
Following the result of the EU Referendum on Friday, here in the Mills and Reeve procurement team, our thoughts have quickly turned to the likely implications for public procurement.
Given that our public procurement rules implement European Directives on public procurement, utilities and concessions contracts, there is the potential that the decision to Leave could eventually bring far-reaching changes in our field. As a starter for ten, out of many possible examples:
• the obligation since April 2016 to run an OJEU competition for clinical health services over a certain threshold is a product of an EU directive. It would, in theory, be open to a government to amend our regulations and remove this obligation, reversing the trend towards increased private sector delivery of healthcare services;
• the official procurement processes come down to us via the EU Directives. In principle, a government could legislate to remove the obligation to follow one of these in favour of a more flexible regime;
• the government could alter the respective thresholds at which the obligation to advertise a contract and run a competition bites; or
• in theory, at least, it could even abandon the regulation of public procurement altogether!
That said, we think we are likely to see Business as Usual rather than any immediate change, at least in the short to medium term. And, although the Law Society of Ireland says it has received a surge in applications from UK lawyers to work in its jurisdiction due to fears about Brexit, here at Mills and Reeve we are not yet consulting the ‘situations vacant’ pages. Here is why.
Even the most cursory look at the fast developing news stories of recent days illustrates the fact that the process of withdrawing from the EU will be complex and will not happen overnight. Indeed, some more sceptical commentators are questioning whether Brexit will ever come to pass at all. There is a two year period following triggering under "Article 50" of the exit process for the UK to reach its “divorce settlement” with the EU, around how to untangle the status quo.
Separately from that, it may take us a much longer period to agree a framework upon which our future relationship with the EU will be based. It will take time for us to negotiate new trade deals, with and outside of the EU (particularly if our potential trading partners want to see the terms of the “divorce settlement” with the EU before reaching any agreement with us on future trade deals).
Even once we have withdrawn, our Public Contracts Regulations 2015, Utilities Contracts Regulations 2016 and Concessions Contracts Regulations 2016 (and their Scots equivalents) are pieces of UK legislation that, unless and until amended or repealed, will stand perfectly well on their own account as our public procurement regime. Not forgetting, too, that the UK has had its own home-grown procurement law regime dating back to long before the European regime was adopted.
Of course, once we have left the EU, our legislature may amend or repeal our procurement regulations. That said, given that the priorities of the post-Brexit parliament (and the newly established "Brexit Unit" headed up by Oliver Letwin) are very likely to be elsewhere, unravelling the tangle web of our relationship with Europe, we think we are unlikely to see major legislative change to procurement law in the short to medium term, especially as we have already been through a major legislative change in 2015 and 2016.
Also, our current membership of the Agreement on Government Procurement (“GPA”) is by virtue of the our being part of the EU but, even once we Leave (and our membership of the GPA ends), we anticipate that in forging any trade details the UK would likely look to becoming a member of the GPA in its own right. The significance of this for procurement is that the GPA imposes similar obligations to the EU Directives; another reason not to throw away your copy of the procurement rules just yet. Of course if the country does a "Norway-style" deal, we will need to continue to abide by the EU procurement law regime.
Our final reason for our view there is no need for procurement teams to expect major change is that the UK government has historically had a healthy appetite for legislating in our field, sometimes going beyond, or “gold plating”, the requirements of the EU Directives. See, for example, Part 4 of the Public Contracts Regulations 2015 and its obligations around use of Contracts Finder and the regulation of the PQQ stage. These measures stem from the so-called “Lord Young” reforms and are designed, in particular, to increase opportunities for small and medium sized entities, a major policy objective of this government and one that seems unlikely to change. Another example of this is the fact that, while one of the core EC Treaty principles is “transparency”, the government has domestically been pursuing a parallel transparency agenda for a considerable time now. Even as an ex-Member State, it is almost certain that principles of transparency/equal treatment/value for money are still likely to remain high up in the UK’s priorities in any new framework for public sector contracting.
Having said all that, there is no doubt that we are in a period of dramatic change in the country’s political and economic direction and it is clear there is considerable uncertainty around its effects in the medium and longer term, both in our field and more widely.
The detailed implications of Brexit will vary depending on whether you are a contracting authority or supplier, and, for suppliers, depending on the size of the business whether your usual market is within the UK or within the EU, but as yet it is too early to say what these are in any detail. We can expect an onslaught of policy development and/or consultation from the government in due course, and we’ll be scrutinizing this and blogging on any developments relevant to our field.
June 20, 2016 11:02 AM | Posted by
Ruth Smith and Jenny Beresford-Jones |
“What is adequacy? Adequacy is no standard at all!” So said Winston Churchill in 1938 in the House of Commons, as part of his criticism of the politics of appeasement and the then government’s statement that it had an “adequate” rearmament programme.
So in the context of adequacy, how does a Court assess adequacy of damages in a procurement case, when hearing an application to lift an automatic suspension involving two not-for-profit NHS organisations? That was the difficult decision before the Court in the recent case of Kent Community Health NHS Foundation Trust v NHS Swale CCG and NHS Dartford, Gravesham and Swanley CCG  EWHC 1393 (TCC)
The facts of the case
Kent Community Health NHS Foundation Trust (the “Trust”) was the incumbent provider of adult community services in north Kent, under a contract which expired on 1 April 2016. In planning for this expiry date, the commissioning CCGs (NHS Swale and NHS Dartford, Gravesham and Swanley) decided that they would put the service out to competitive tender. As health services, the services were “Part B” services falling under the Public Contracts Regulations 2006. The Trust submitted a tender but following the tender evaluation, the CCGs announced their intention to award the contract to one of the other bidders, Virgin Care. The Trust then issued proceedings in the High Court and so triggered the automatic suspension of the contract award.
When hearing the CCGs application to lift the suspension, the Court applied the usual American Cyanamid test.
The test asks three questions:
• can the claimant bidder show that there is serious issue to be tried? Unless the bidder has no real prospect of succeeding at trial, this part of the test will usually be satisfied;
• assuming there is a serious issues to be tried, would financial damages be an “adequate remedy” for the successful party? If, in the case of a challenging bidder, the answer is “yes” then the Court will usually agree to lift the suspension and allow the contract to be entered into; and
• if damages are not adequate as a remedy, then does the “balance of convenience” favour one side or the other? In public procurement cases, this is usually shorthand for saying “does the public interest lie in allowing the contract to be awarded prior to a full trial on merits, or not?”
In this case, both parties to the application were public sector, NHS bodies with similar public sector duties to the people of Kent in respect of the provision (or commissioning the provision) of adult community healthcare services. However, they each held diametrically opposed views on how that duty should best be fulfilled and the services provided.
The application of the American Cyanamid test
The parties accepted there was potentially a serious issue to be tried and so that was quickly dealt with by the Court.
It then went on to consider, in detail, whether damages would be an adequate remedy for each party.
The Trust argued that, as it was a not-for-profit entity which exists to service the public good, damages would not be an adequate remedy and instead it needed the suspension to be maintained pending full trial of the issues. Procurement for NHS services, said the Trust, could not be treated as an ordinary commercial exercise. If Virgin Care were awarded the contract, this would undermine the Trust’s public service mission to provide integrated health care to people in Kent, in a way that could not be compensated in financial terms. In any event, said the Trust, it stood to lose 10% of revenue and would suffer from reduced economies of scale, which would impact on patient care as it would have to make savings elsewhere.
Unsurprisingly, the CCGs argued that the suspension should be lifted and the award of the contract allowed to proceed. They argued damages would be an adequate remedy for the Trust were it to win at full trial. The financial loss to the Trust could easily be calculated and the financial and reputational impact of losing the contract would not be so catastrophic as to cause the Trust’s total disintegration as an entity/service provider (in the few cases where the courts have held that damages were inadequate as a remedy, it has usually been for reasons along these lines).
In contrast, the CCGs argued damages would not be adequate remedy for them. The Court acknowledged that if the suspension remained in place, the CCGs losses were more difficult to quantify. The CCGs had some on-going concerns about the quality of the Trust’s services but, in assessing damages, this had to be balanced against possible similar or different difficulties in the bedding in of a new service in the early days the proposed contract with Virgin Care. The CCGs were concerned that any delay in finalising the new contracting arrangements, even with an expedited trial, would still present a real risk of their not having adequate arrangements in place by winter of 2016/2017 (when demand for the services would be at its heaviest).
The court accepted that in some cases damages might not be an adequate remedy on grounds other than it not being possible to calculate the financial loss incurred. For example, where the relief sought is the protection of protection of privacy, financial compensation might well be inadequate. The question of the adequacy of damages should be answered by reference to the interests of the person seeking the injunction. In principle there was no reason why damages should be regarded as inadequate simply because the Trust, as a not for profit organisation, would not suffer a substantial financial loss. The Court accepted that, in some cases, the immediate financial loss may be modest, but the knock on effects (which would not be compensated) could be catastrophic. This then might create a real interest that could not be compensated in damages to meet the substantial justice of the case.
That said, the court was not persuaded by the Trust’s arguments on adequacy of damages, and said:
• The Trust having a public service mission to provide health care services in Kent did not give it a monopoly on doing so. The chosen procurement regime set out to treat the Trust and other bidders equally, and on a level playing field of providers. There could be no justification for approaching the question of adequacy of damages differently had Virgin Care been the loser and the claimant in this case. In short, the Trust’s status as an NHS Body did not secure it any special treatment in the decision about adequacy of damages, and in financial terms its losses could be easily calculated.
• The award of the contract to Virgin Care would not cause a significant reputational loss to the Trust or have a catastrophic effect on the its ability to continue providing services.
• The Trust’s core argument was that the award of the contract to Virgin Care would undermine its public mission to deliver integrated care across Kent and the new arrangements with Virgin Care would not serve the interests of patients as well as would be the case if the contract remained with the Trust. It was a category error, said the Trust, to expect financial damages to compensate for this. Indeed, the Trust’s purpose in engaging in the procurement was not to generate money but rather to best serve the interests of patients; and its interest in pursuing the litigation was in the protection of the public good. Therefore, it would not be doing substantial justice to the Trust if the Court held that all it could recover was money.
In response to this, the Court said its role was to resolve the dispute before it, it could not and would not express a view about the comparative merits of the services depending on whether these were provided by the Trust, as part of integrated provision of a wider service, or by Virgin care as a separate provider. All it would rule on was on whether the procurement process was flawed and, if so, the consequences.
On that basis, the Court ruled that damages would be an adequate remedy for the Trust, should it win on the substantive points at full trial. In contrast, the Court said that there was a significant risk that, if the suspension remained in place, an award of damages would not be an adequate remedy for the CCGs.
Given that damages would be adequate, on a strict application of American Cyanamid, the judge noted, it was not usually necessary to look further at the balance of convenience but in this case he did.
He noted that the public interest brought a couple of issues into play: (1) the procurement exercise should be conducted fairly and (2) the CCGs should be able to put arrangements they consider in the public interest into effect promptly. The Court found that overall the balance of convenience did not weigh heavily in favour of either party.
The Court concluded the prudent course, in the interests of justice in the run up to full trial, would be to maintain the “status quo”. But what was the “status quo?. The CCGs argued, since the contract with the Trust had already expired on 1 April 2016, the status quo was that it should be free to contract with Virgin Care. The Trust argued that maintaining the status quo required its contract to be extended in the interim period. The Court favoured the CCGs reasoning, concluding the suspension should be lifted and the CCGs allowed enter into the contract with Virgin Care. In short, faced with the question of whether it was just in all the circumstances that the Trust should be limited to a remedy in damages the Court’s answer to this was “it is”.
You can read the full judgment here.
The case provides useful insight on how the Court will consider adequacy of damages in an automatic suspension case where both parties are not for profit organisations.
Interestingly, no reference is made in the judgment to the NHS (Procurement, Patient Choice and Competition) (No 2) Regulations 2013 and the CCGs duty, under those Regulations, to procure the provider (or providers) who are most capable. Indeed, the Court was quite clear in this case that its role was not to assess the respective merits of each bidder’s services but simply whether or not the procurement process was flawed.
May 27, 2016 4:27 PM | Posted by
Smith, Ruth |
Yesterday’s Press Release from the Commission (see below) relating to its infringement package for May 2016 goes like this – not 1, not 2 but yes you’ve guessed it TWENTY ONE member states told to get their act together and transpose the 3 new EU procurement directives! So it appears - as if we didn't know already - our fellow member states have a slightly more relaxed approach to EU regulation than us Brits do.
The European Commission has requested 21 Member States to transpose in full one or more of the three directives on public procurement and concessions (Directives 2014/23/EC, 2014/24/EC, 2014/25/EC) into national law. All Member States were obliged to notify the transposition of the new public procurement rules by 18 April 2016. The Commission's request takes the form of a letter of formal notice and it has been sent to Austria, Belgium, Bulgaria, Croatia, the Czech Republic, Cyprus, Estonia, Ireland, Greece, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, Finland, Spain and Sweden.
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