Community R4C Ltd v Gloucestershire County Council

For a procurement damages claim, the claimant must establish on the balance of probabilities that it was an economic operator and had a material interest in the proposed procurement. A merely more-than-fanciful prospect of satisfying hypothetical selection criteria is insufficient at that threshold stage. The later loss-of-chance assessment is distinct and may involve evaluating a real or significant chance of winning the contract.

For limitation under regulation 92(2), time begins when the claimant knew or ought to have known facts which apparently clearly indicated an infringement. Suspicion, estimates, or information obscured by redactions will not suffice where proper analysis shows that the suspected breach remains illusory or unclear.

The claimant brought a procurement damages claim concerning the Council’s amended waste-treatment contract with UBB. It alleged that the 2016 Contract was materially different from the 2013 Contract and should have been competitively procured.

At a preliminary trial, the court considered whether the claimant was an economic operator capable of pre-qualifying under lawful selection criteria pursuant to regulation 58 of the Public Contracts Regulations 2015, and whether the claim was out of time under regulation 92(2).

1. Economic operator and burden of proof. The claimant had to establish on the balance of probabilities both that it was an economic operator at the relevant date and that it could have pre-qualified. The inquiry was distinct from the later assessment of the percentage chance of winning a tender.
2. The definition of economic operator in regulation 2 required an identifiable person, public entity or group which offered works, products or services on the market. The claimant was not a legal person in mid-January 2016. The informal association preceding its registration did not have separate legal personality, and the evidence did not show that it was then offering the works or services required by the hypothetical tender.
3. A consortium member could in principle derive economic-operator status from a consortium which itself qualified as an economic operator. However, the claimant had pleaded that it was an economic operator in its own right and had not established a sufficiently identified consortium from which derivative status could arise.
4. The court used the Shadow PQQ as the benchmark for regulation 58. The claimant and the three identified entities could not satisfy the turnover threshold or the financial due-diligence requirements. They also lacked the required recent track record in delivering major capital infrastructure projects. Potential supporters were not committed entities whose capacities could be relied on under regulation 60(3). The claimant therefore could not have pre-qualified.
5. Limitation. The test under regulation 92(2), following Sita UK Ltd v Greater Manchester Waste Disposal Authority, required knowledge of facts which apparently clearly indicated an infringement. The claimant did not acquire that knowledge from the 2016 Share Offer, its complaint to the local auditor, the partially redacted Ernst & Young report, or subsequent correspondence. The relevant information became available on 20 December 2018, so the claim issued on 18 January 2019 was in time.
6. The answer to the first preliminary issue was adverse to the claimant and disposed of the claim at that stage. The limitation issue was decided in the claimant’s favour. Consequential orders were reserved.