DHL Supply Chain Ltd v Secretary of State for Health and Social Care

In a procurement challenge, the meaning of tender criteria is a question of law. Contracting authorities must apply the published criteria transparently and equally. Their subjective intention does not determine how criteria are understood; the relevant perspective is that of the reasonably well informed and normally diligent tenderer.

Summary judgment is inappropriate where construction depends on the factual matrix or material factual disputes remain. An application to lift the automatic suspension under the Public Contracts Regulations 2015 is determined by the American Cyanamid principles. The court assesses the adequacy of damages, the balance of convenience and the public interest, including the practical consequences of delaying an integrated public service.

DHL challenged a procurement by the Secretary of State for Health and Social Care for a £730 million NHS and social care logistics contract. It alleged that the Department had unlawfully evaluated Unipart’s response to selection question SQ 6.9 by applying criteria that were not published or were inconsistent with the invitation to tender.

DHL sought summary judgment. The Department, supported by Unipart as interested party, sought to lift the automatic suspension preventing the contract from being entered into. The central issues were the proper construction of SQ 6.9, whether the claim was suitable for summary determination, and whether the suspension should remain in place pending trial.

1. Summary judgment. DHL’s application was dismissed. The court accepted that the transparency and equal-treatment obligations required the Department to apply the selection criteria in the invitation to tender. Their meaning was a matter of law, assessed objectively from the perspective of a reasonably well informed and normally diligent tenderer. However, SQ 6.9 had to be construed against the relevant factual matrix and the invitation to tender as a whole.
2. The documents before the court disclosed real disputes about what was said at pre-bid meetings, the experience required by SQ 6.9, whether other bidders could satisfy the criteria, and whether Unipart’s response met them. Those issues could not fairly be resolved without testing the evidence at trial. The Department therefore had a realistic prospect of successfully defending the claim and there was a compelling reason for a trial.
3. Automatic suspension. The application to lift the suspension under regulations 95 and 96 of the Public Contracts Regulations 2015 was granted. The court applied the American Cyanamid approach: whether there was a serious issue to be tried, whether damages would adequately compensate DHL if the suspension were lifted, whether damages would adequately compensate the Department if it remained, and where the balance of convenience lay.
4. Damages were unlikely to be adequate for DHL because loss of the prestigious contract, reputation and skilled workforce would be difficult to quantify and prove. Damages were also unlikely to be adequate for the Department because delay would disrupt the integrated Future Operating Model and its intended benefits. The balance of convenience strongly favoured lifting the suspension, having regard to implementation deadlines, interdependency between the contracts, transition requirements and the public interest in timely NHS supply-chain reform.

The Department was permitted to enter into the logistics contract with Unipart.