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NHS Trust Takes on Council in £41 Million Public Procurement Dispute

High-value public procurement disputes are an ever-increasing feature of the legal landscape and, in one such case, a council has come under fire in respect of its decision to strip an NHS trust of a services contract worth more than £40 million.

Under its existing contract, the trust had provided treatment and recovery facilities for more than 3,000 adults affected by drug and alcohol misuse annually. However, following a tendering process, the council had awarded the contract, which was worth a maximum of £41.29 million over five years, to a charity.

The trust launched High Court proceedings, arguing that the council had failed to act transparently, rationally and fairly. Its evaluation of the rival tenders was said to have been manifestly wrong and the trust submitted that, had its bid been marked correctly, it would inevitably have won the contract. The Court accepted that the trust’s arguments revealed a serious issue to be tried.

By operation of the Public Contract Regulations 2006, the proceedings had the effect of automatically suspending the award of the new contract. In lifting that suspension, however, the Court found that the trust would have an adequate remedy in damages if it succeeded in establishing that the tendering process was flawed. The balance of convenience also fell in favour of removing the suspension.