Summary
Applications to lift the automatic suspension of a public procurement contract are governed by the American Cyanamid approach. The court should first ask whether there is a serious issue to be tried, then consider adequacy of damages and the balance of convenience. The Remedies Directive permits the court to consider the probable consequences of interim measures, the public interest, the strength of the challenge and whether damages provide an effective remedy.
A contracting authority need only conduct the sustainability assessment required by the tender documents. It is not required to undertake an additional investigation into confidential underlying costs or the commercial assumptions of individual tenderers unless the procurement documents require that exercise.
Factual background
The Cabinet Office sought to lift the statutory suspension preventing award of a single-supplier framework agreement for government media planning and buying services to Carat. Group M, the incumbent provider and unsuccessful tenderer, challenged the procurement, principally alleging that Carat’s lower prices were unsustainable and that the authority had failed properly to validate them.
The challenge also alleged errors in the quality and price evaluations, failure to exclude an abnormally low tender, and unlawful amendments to the invitation to tender. The court considered whether those allegations raised a serious issue to be tried and, if so, whether damages and the balance of convenience justified continuing the suspension.
Held
- The suspension was lifted. The court held that the application was properly determined by the American Cyanamid principles. The Remedies Directive was consistent with that approach. It permitted consideration of the probable consequences of interim measures, the public interest, the strength of the claim and the adequacy of damages.
- There was no serious issue concerning the quality evaluation. Group M had passed the threshold, and its lower score could not affect the price evaluation except in the event of a tie. No tie was alleged.
- The invitation to tender required prices to include profit, overheads and anticipated resource costs. It did not require tenderers to disclose underlying costs, market share, Value Pots or their deployment. The sustainability exercise required by paragraph 11.6.13 was validation of rates against Ebiquity’s pool prices and market expertise. The authority was not required to undertake the more extensive analysis advanced by Group M. No manifest error was shown.
- The provisions concerning abnormally low tenders principally required an authority, where it considered a tender abnormally low, to request an explanation, consider the evidence and verify the offer. They did not obviously require the authority to determine that every apparently low tender was abnormally low or to reject it.
- Even if a serious issue had been established, damages would have been an adequate remedy for Group M. The Cabinet Office and the public interest would suffer substantial prejudice if important government campaigns were delayed, and the existing framework could not readily be extended. The weakness of the claim, the expiry of the tender prices and the likely need for a fresh procurement all favoured lifting the suspension.
The court’s approach to earlier authorities
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Key cases cited
14 authorities cited.
- American Cyanamid Co v Ethicon Ltd [1975] AC 396
- NATS (Services) Ltd v Gatwick Airport Ltd & Anor [2014] EWHC 3133 (TCC)
- NP Aerospace Ltd v Ministry of Defence [2014] EWHC 2741 (TCC)
- Covanta Energy Ltd v Merseyside Waste Disposal Authority [2013] EWHC 2922 (TCC)
- Pearson Driving Assessments Ltd v The Minister for the Cabinet Office [2013] EWHC 2082
- Metropolitan Resources Northwest Ltd v Home Secretary [2011] EWHC 1186 (Ch)
- Exel Europe Ltd. v University Hospitals Coventry & Anor [2010] EWHC 3332 (TCC)
- Indigo Services (UK) Ltd v The Colchester Institute Corporation [2010] EWHC 3237 (QB)
- Alstom Transport v Eurostar International Ltd & Anor [2010] EWHC 2747 (Ch)
- SAG ELV Slovensko [2012] 2 CMLR 36
- Letting International Ltd v London Borough of Newham [2007] Civ 1522
- TQ3 Travel Solutions Belgium SA v Commission of the European Communities [2005] II-2627
- Impresa Lombardini SpA v ANAS [2001] ECR 1-9233
- Fratelli Costanzo SpA v Comune di Milano [1989] ECR 1-1839
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Cases citing this case
5 later cases · 2 positive · 1 neutral · 2 caution
Most senior citing decisions:
- Ocean Outdoor UK Ltd v The London Borough of Hammersmith & Fulham [2019] EWCA Civ 1642 distinguished
- Lancashire Care NHS Foundation Trust & Anor v Lancashire County Council [2018] EWHC 200 (TCC) applied
- Geodesign Barriers Ltd v The Environment Agency [2015] EWHC 1121 (TCC) considered
- Bristol Missing Link Ltd v Bristol City Council [2015] EWHC 876 (TCC)
- Advanced Business Software and Solutions Ltd v The Pirbright Institute [2014] EWHC 4651 (TCC)
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