BSF Group Ltd. v Secretary of State for Defence & Anor

Adoption of the negotiated procedure for a public supply contract does not, without more, confer on tenderers a right to negotiate revised or improved terms. The contracting authority may decide whether to negotiate, provided it observes transparency, equal treatment and the terms of the invitation.

In reviewing tender evaluations, the authority enjoys a wide discretion. The court will intervene only where a manifest error is shown. In an interim procurement application, the court must also consider limitation, the claimant’s material prospect of obtaining the contract, the adequacy of damages, continuity of supply and the interests of an innocent successful tenderer.

The claimant, the incumbent supplier of food and bottled water to the armed forces, challenged the intended award of a replacement five-year contract to the second defendant. The procurement had been conducted under the negotiated procedure in the Public Supply Contracts Regulations 1995.

The claimant alleged that the Ministry of Defence had unlawfully failed to negotiate, had changed the procurement procedure without transparency, and had applied unfair or undisclosed criteria. It sought an interim injunction preventing the contract being entered into pending trial. The central questions were whether the claims were sufficiently arguable and timely, and where the balance of justice lay.

1. Negotiated procedure. The Regulations did not define the permissible scope of negotiation. The use of that procedure did not itself give every tenderer a right to negotiate its tender, to receive an improved description of the requirements, or to submit revised terms. Subject to transparency, equal treatment and the particular invitation, the contracting authority was entitled, but not bound, to negotiate, eliminate bidders, select a preferred bidder, invite best and final offers or re-tender. The ITN in this case created no wider right.
2. Evaluation and review. The complaints about the criteria and their application were weak. The authority had disclosed sufficient information, and tenderers could seek clarification under the ITN. Applying the approach in Siac Construction Ltd v Mayo County Council [2003] EULR1, the authority enjoyed a wide discretion and none of the alleged defects demonstrated a manifest error.
3. Limitation. The claimant knew by the clarification meeting on 6 February 2006, at the latest, that no negotiations would occur. Its failure-to-negotiate and alleged procedure-change complaints were therefore out of time, and no good reason was shown to extend the period under regulation 29(4)(b). The other evaluation complaints were arguably within time because the claimant lacked knowledge of them until the debriefing and disclosure of documents.
4. Causation and remedy. The claimant was not barred at the interim stage merely because it might not have won the contract; if its complaints were established, it might show a material prospect of success. Damages were not necessarily an adequate remedy because regulation 29(5) preserved the possibility of setting aside the award before contract formation.
5. Interim relief. The injunction was refused. The allegations were markedly weak, the principal complaints had not been pursued promptly, and an injunction risked interruption of essential supplies and serious prejudice to Purple, which was an innocent tenderer facing substantial implementation difficulties. The balance of justice favoured refusal.

First-instance decision on an application for interim injunctive relief. No prior appellate decision is stated in the judgment.