B2net Ltd v HM Treasury (Sued As Buying Solutions)

An interim suspension of a public procurement exercise requires consideration of whether there is a serious issue to be tried, whether damages would be an adequate remedy, and where the balance of convenience lies. The court must assess which course is likely to cause the least irremediable prejudice. In procurement cases, the contracting authority must comply with equality, transparency and objectivity requirements, but retains a margin of appreciation in matters of judgment or assessment. The court should intervene in such assessments only for manifest error. Where damages adequately compensate the claimant, the wider disruption and prejudice caused to public authorities, competing bidders and service users may justify refusing interim relief.

The claimant, an IT storage company, challenged the defendant’s restricted procurement exercise for a government framework agreement supplying IT goods and services. It sought an interim order under regulation 47(8) of the Public Contracts Regulations 2006 suspending the exercise.

The claimant had narrowly failed to qualify for the tender stage after receiving reduced marks for a question concerning breadth of experience. It argued that the scoring criterion unlawfully preferred prime contractors over subcontractors and breached requirements of equality, transparency and objectivity. The central issues were whether there was a serious issue to be tried, whether damages would be adequate, and whether the wider consequences of suspension favoured granting relief.

1. Interim relief. The application was dismissed. The court applied the ordinary interim injunction approach under regulation 47(8), asking whether there was a serious issue to be tried, whether damages would be adequate, and where the balance of convenience lay. The essential inquiry was which course was likely to cause the least irremediable prejudice.
2. Merits of the procurement challenge. The claimant’s challenge was weak. The Public Contracts Regulations 2006 required equal, non-discriminatory and transparent treatment. They also permitted the authority to limit the number of tenderers by objective and non-discriminatory criteria. The authority had a margin of appreciation in matters of judgment and assessment, subject to review for manifest error. No strong case was shown that distinguishing prime contractors from subcontractors was irrational or impermissible.
3. Adequacy of damages. The evidence did not establish that damages would be inadequate. The claimant’s lost opportunity, reputation and margin could be assessed using information arising during operation of the new framework. The possibility that an injunction would be a better remedy did not make damages inadequate.
4. Wider prejudice. Suspension would disrupt a complex framework used by public authorities and would prejudice competing suppliers and public purchasers. Those losses could not readily be compensated through a cross-undertaking. That factor did not automatically prevent an injunction, but it weighed against relief, particularly because the claimant’s merits case was weak.
5. Other matters. The claimant’s delay in raising the scoring objection and commencing proceedings would have weighed significantly against relief if the application had otherwise been evenly balanced. The adequacy of the cross-undertaking was not itself decisive.