Exel Europe Ltd. v University Hospitals Coventry & Anor

When proceedings automatically suspend entry into a public contract, the court must assess an application to lift the suspension as if the statutory suspension did not apply. It applies the ordinary interim-relief principles: serious issue, adequacy of damages and balance of convenience. The relative strength of the challenge matters, and public interests such as fair procurement and efficient NHS operation are weighed without automatic priority. A single compliant tender is not incapable of being most economically advantageous merely because it is the only tender. Pre-tender discussions may raise a serious issue where they arguably confer an unfair advantage. Post-tender discussions are permissible for finalisation but not for substantial changes to the advertised contract. Damages based on lost opportunity or wasted tender costs may be adequate.

Exel challenged a procurement by the Defendant for a framework agreement concerning the transfer and operation of the Healthcare Purchasing Consortium. Exel withdrew before submitting a tender, while the Defendant later selected an associated company of HCA. Exel alleged breaches of the Public Contracts Regulations 2006, including unfair pre-tender discussions, unlawful negotiations, an unlawful central purchasing body and failure to identify contracting parties.

The proceedings triggered the automatic suspension under Regulation 47G(1). The Defendant sought an interim order under Regulation 47H bringing that suspension to an end pending determination of the claim. The central issue was whether the suspension should continue applying the ordinary principles governing interim relief.

The Defendant’s application was granted. The requirement under Regulation 47G(1) that it refrain from entering into the framework and business transfer agreements was brought to an end under Regulation 47H.

1. Applicable approach. Regulation 47H(2) required the court to consider whether an interim order restraining entry into the contract would have been appropriate if the automatic suspension did not apply. The court therefore applied the ordinary American Cyanamid Co v Ethicon [1975] AC 396 approach. The statutory suspension was not to be weighted in its favour.
2. Serious issue and limitation. The relative strength of the claim was relevant. Complaints known, or which ought to have been known, before 28 June 2010 were likely to be time-barred under Regulation 47D. The court adopted the approach in Uniplex (UK) Ltd v NHS Business Services Authority [2010] PTSR 1377. The complaints concerning inadequate information and unidentified contracting parties were weak or potentially time-barred.
3. Procurement complaints. Pre-tender discussions between the Defendant and HCA raised a serious issue because they might have conferred an unfair advantage or undermined equal treatment and transparency. The court could not resolve that issue at the interim stage without full disclosure. Post-tender discussions were not inherently unlawful if confined to finalising a compliant tender, but substantial changes to the basis or type of contract could breach the Regulations. The complaints concerning the use of an associated contracting entity and an alleged central purchasing body did not raise serious issues on the evidence available.
4. Single tender and damages. Regulation 30 did not require a procurement to be repeated merely because only one compliant tender was submitted. A single tender could be the most economically advantageous offer if properly evaluated. Damages were an adequate remedy. Loss could be assessed on a lost-opportunity basis, or as wasted tender costs if Exel would not have proceeded, applying the approach referred to in Allied Maples v Simmons & Simmons [1995] 1 WLR 1602.
5. Balance of convenience. The public interest included fair and transparent procurement and the efficient, economical operation of the NHS. The urgency of resolving the uncertainty surrounding the Consortium, together with the delay likely to result from continued suspension, favoured lifting it.

not stated in the judgment.