Group M UK Ltd v Cabinet Office

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.

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.

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.