Indigo Services (UK) Ltd v The Colchester Institute Corporation

In an application to lift the automatic standstill in a public procurement challenge, the court applies the American Cyanamid guidelines. A claimant need show only a more than fanciful chance of obtaining the contract, caused by the alleged procurement defects, to establish an actionable loss or risk of loss. That threshold does not create an entitlement to an injunction. The court must balance irremediable prejudice to the claimant, the contracting authority, third parties and the wider public interest. Where continuation of the standstill would threaten essential public services, and an injunction at trial is unlikely, the prohibition should be lifted.

The defendant, a further and higher education corporation and contracting authority, awarded a cleaning-services contract to Emprise Service plc. The claimant, the incumbent contractor and an unsuccessful tenderer, challenged the procurement and invoked the automatic standstill under the Public Contracts Regulations 2006, as amended by the Public Contracts (Amendment) Regulations 2009.

The defendant applied under regulation 47H(1)(a) to lift the prohibition on entering the contract. The claimant alleged defects in the contract notice and tender evaluation, including departures from the published scoring methodology. The central issues were whether there was a serious issue involving a more than fanciful loss of a chance, whether damages were adequate, and how the competing prejudice and public-interest considerations should be assessed.

1. Application granted. The automatic standstill was lifted under regulation 47H(1)(a), permitting immediate signature of the contract with Emprise.
2. Regulation 47H(2) requires the court first to consider whether, absent the automatic prohibition, an interim order restraining the contracting authority would be appropriate. The application was therefore assessed as if the claimant sought interim relief.
3. The court applied the American Cyanamid guidelines, including the principle that the court should select the course likely to cause the least irremediable prejudice. In the procurement context, that assessment includes prejudice to third parties and the wider public interest.
4. Under regulations 47A and 47C(1), a claimant need not establish that it would have won the contract. It is sufficient to show that the alleged defects caused, or threaten to cause, a more than fanciful chance of obtaining it. This requires causative analysis and evaluation. The claimant established a serious issue to be tried, but that did not determine the entitlement to final relief.
5. Damages were not intrinsically an adequate remedy because the profits over the proposed multi-year contract would be difficult to quantify. Nevertheless, continuation of the standstill risked closure of the College’s Colchester site and disruption to further and higher education. That prejudice substantially outweighed the claimant’s prejudice.
6. The alleged contract-notice defects were time-barred under regulation 47D. Following Uniplex (UK) Limited v NHS Business Services Authority Case C-406/08, time ran from knowledge, or deemed knowledge, of the infringement, rather than from the later award decision. The alleged defects were apparent from the notice itself.
7. The proposed unprovided-for extension of the existing cleaning contract would constitute a new contract for services. Pressetext Nachrichtenagentur GmbH v Austria Case C-454/06 did not support avoiding a competitive procurement process. The urgency provisions likewise did not remove the requirement for a competitive process.
8. Even if the claimant proved causation at trial, the prospects of an injunction were limited by the comparative prejudice, the likelihood that causation would fail, and the low likelihood that the lost chance would materially exceed the non-fanciful threshold.