Lion Apparel Systems Ltd v Firebuy Ltd

In public procurement, duties of equal treatment, transparency and objectivity admit no margin of appreciation. Evaluative judgments may be disturbed only for manifest error, meaning a clearly established error rather than one possessing exaggerated obviousness.

A bidder seeking relief must show that the breach caused loss, a risk of loss or the loss of a legally recognisable chance of obtaining the contract. Challenges and the preceding statutory notice must be made promptly. An interim order depends on the strength of the case, the adequacy of damages for each side and the balance of convenience, including harm to the public procurement project and third parties.

Lion Apparel Systems Ltd applied under Regulation 32 of the Public Services Contracts Regulations 1993 for an interim order preventing Firebuy Ltd from contracting with the preferred bidder for the supply and management of firefighters’ uniforms and personal protective equipment.

Lion, which had ranked third, alleged defects in the treatment of the preferred bidder, the scoring methodology, individual scoring decisions, garment trials, bidder feedback and other aspects of the procurement. It also alleged favouritism and advanced an alternative contractual claim based on the invitation to negotiate.

The central questions were whether Lion had a sufficiently strong case of breach and causative loss, whether relevant complaints and notices were timely, and whether the balance of convenience justified suspending the procurement pending trial.

1. Application refused. Lion had shown no sufficiently strong basis for suspending the procurement. Its only ground of real concern concerned the garment-scoring methodology, but the evidence established no more than a weak and speculative case of manifest error. That case did not justify risking the failure of the procurement project.
2. The procurement authority had to comply with equal treatment, non-discrimination, transparency and objectivity. Those duties allowed no margin of appreciation concerning whether to comply. Matters of judgment and evaluation were different: the court could intervene only where the authority made a manifest error, meaning an error clearly shown to have occurred.
3. The inaccurate answer in the preferred bidder’s pre-qualification questionnaire did not automatically invalidate its participation. Read as a whole, the questionnaire conferred a discretion to distinguish between deliberate and accidental, serious and trivial, misinformation. Neither the original authority’s treatment of the matter nor Firebuy’s later decision to retain that bidder was manifestly wrong.
4. Regulation 32(2) of the Public Services Contracts Regulations 1993 required causative loss, a risk of loss or the loss of a legally recognisable chance. Even where particular scoring complaints were arguable, they could not independently or cumulatively overcome the preferred bidder’s lead. They therefore supplied no cause of action or basis for interim relief. The broader scoring-methodology complaint could conceivably affect the result, but remained weak.
5. Under Regulation 32, proceedings and the preceding notice had to be prompt. Notice therefore had to be given promptly or “pre-promptly”, particularly while a procurement stage could still be corrected. Complaints concerning garment fitting and bidder feedback were raised too late, after the process had moved forward and, in some instances, after the three-month period had expired.
6. The invitation to negotiate created no contractual obligations. It expressly excluded a contract between Firebuy and a bidder. The procurement duties arose under the general law and could not sensibly coexist as contractual duties free from Regulation 32’s statutory limitations.
7. Damages would not adequately compensate Lion because of the difficulty of quantifying profits over the proposed contractual term. Damages would also be inadequate for Firebuy and affected third parties because suspension risked the project’s failure and implicated the wider public interest. The balance of convenience therefore favoured allowing the procurement to continue.

This was a first-instance application for interim relief in two claims issued by Lion. The court declined to suspend the procurement pending trial.