Procurement teams, and bidders, everywhere will be familiar with the scenario: run the procurement, identify a winner and then….receive a letter challenging the outcome. It is not uncommon in that scenario to go back to the procurement documents, note that there is no obligation to award the contract and to send the message “Procurement abandoned”.
No decision to abandon is ever taken lightly and, indeed, you can search for hours in the Regulations and not find an express right to abandon (albeit Regulation 55(1)(b) makes it clear that a decision not to award is permissible) but it is generally regarded as the most pragmatic response to a challenge which may have merit. There may also, quite genuinely, be matters which have come to light during the bidding and evaluation process which suggest that the requirements of the procurements itself need to be reviewed.
Generally speaking, decisions to abandon are not challenged so there is a shortage of authority on what a ‘permissible’ abandonment might look like. However, the overriding principles of fairness, transparency and equal treatment are clearly relevant to any decision under the Regulations overlaid by the general public law principle of reasonableness.
Recently the Technology & Construction Court has looked at a decision on abandonment and been asked to consider, amongst other things, whether a decision to abandon amounted to “a manifest error”.
The facts of the particular case (Amey Highways Ltd v West Sussex County Council) are relatively unusual and I do not intend to deal with the substantive issues that were also considered as a consequence of the decision to abandon. However, it is useful to have some guidance regarding the basis on which a decision to abandon will be reviewed by the court.
In the present case, the judge concluded that a decision to abandon was not “manifestly wrong”. He found that a variety of considerations had gone into the decision which amounted to a “rational attempt to preserve public funds”. These considerations included a wish to avoid the costs of litigation from a challenge but also other cost savings, the effect on public services and the possibility of developing a more advantageous solution on re-procurement.
The judge found that in order to make out an assertion that the decision to abandon was “manifestly wrong” the Claimant would have to show “that the decision was not expedient in the public interest.” Something, in my opinion it would be hard to do in most cases of abandonment.
The judge also considered whether the decision to abandon breached the fundamental principles of equal treatment and transparency and found that it did not even though the Council, in this case, had not fully explained all its reasoning.
Overall, and even though the decision to abandon still left the Council exposed to a claim for damages (an interesting but separate topic), the decision to abandon itself could not be challenged.
Whilst this will be a relief to Authorities the case once again also highlighted the fundamental importance of keeping strong and comprehensive notes and records of decisions and the reasons for them. As always the better the records for the reason the more likely it is that the decision itself can be defended.
Amey Highways Ltd v West Sussex County Council [2019] EWHC 1291 (TCC)