Woods Building Services v Milton Keynes Council

Where a procurement evaluation is fundamentally flawed and the claimant would otherwise have won, the court should not ordinarily compel the contracting authority to enter into the proposed contract. Regulation 47I of the Public Contracts Regulations 2006 does not list that remedy, although the court’s residual powers may in principle permit a mandatory injunction. Such an injunction is exceptional where it would require a long-term contractual relationship. The court must consider supervision, enforcement, precision, unjust enrichment, the balance of convenience and whether damages provide an adequate remedy. A flawed procurement process also weighs against compelling performance. Where the claimant can identify wasted costs or lost profit, damages are ordinarily an adequate remedy.

The claimant challenged the defendant council’s procurement evaluation. In the substantive judgment, the court found the evaluation process fundamentally flawed and adjusted the scores so that the claimant’s tender was the most economically advantageous. The parties agreed that the original decision should be set aside and the records amended.

The claimant sought an order requiring the council to award it the contract, or alternatively damages. The council opposed both remedies and argued that the situation was analogous to a contracting authority voluntarily terminating a procurement. The issues were whether the court could compel the council to contract with the claimant and whether damages should be awarded and assessed.

The court rejected the application for an order requiring the council to enter into the contract and ordered that the claimant was entitled to damages, with quantum to be assessed at an appropriate time.

1. Statutory remedy. Regulation 47I of the Public Contracts Regulations 2006 provides remedies including setting aside the decision and amending the record. It does not expressly identify an order compelling the contracting authority to enter into a contract, although it preserves the court’s other powers.
2. Mandatory injunction. A mandatory injunction requiring a public authority to enter into a contract lasting many years would be exceptional. The relevant considerations include the need for constant supervision, expense of enforcement and the need for precision. The court also referred to the risk of unjust enrichment identified in Co-Operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1. Analogous employment authorities reinforced the reluctance to compel continuing contractual relationships.
3. Balance of convenience. The claimant’s apparent success was qualified by the fact that the entire evaluation process had been unsatisfactory. It would be inappropriate to award a contract arising from that flawed process.
4. Adequacy of damages. Having heard the case to judgment, the court was satisfied that the claimant could identify wasted costs and loss of profit arising from the breach. Damages were therefore an adequate remedy. The court could not stipulate that damages would necessarily be loss of profit because the claim had not yet been formulated and the re-run procurement might affect quantum.
5. The case was not analogous to voluntary termination of a procurement. The council had maintained that its process complied with the Regulations, but was found to have breached them. The natural consequence was an award of damages.