- August 11, 2017
- Posted by: Josiah Hincks Solicitors
- Category: Business Law Updates
The award of public contracts is automatically suspended if disputes arise as to the fairness of the tendering process. In deciding whether such suspensions should be continued until trial, however, judges have to strike a tricky balance between public and private interests.
One such case concerned a company that had made an unsuccessful bid for a laboratory services contract with an NHS trust. The automatic suspension came into effect when the company launched proceedings under the Public Contracts Regulations 2015 on the basis of alleged flaws in the evaluation and scoring of the winning bid. The company had valued its claim against the trust at more than £3 million, representing lost profits and wasted tendering costs.
In lifting the suspension, however, the High Court found that its continuation would have a significant detrimental effect on patient and clinical care. It also noted the trust’s plea that a delay of 10 weeks in awarding the contract might cost it £1.5 million or more.
The company argued that it would suffer grave reputational damage as a result of not being awarded such a major contract. However, the Court found that, if its challenge to the tendering process ultimately succeeded, an award of damages would be an adequate remedy. The balance of convenience overwhelmingly favoured the prompt award of the contract to the successful bidder.