Kellogg Brown & Root Ltd v Mayor's Office for Policing and Crime

Applications to lift an automatic suspension in a procurement challenge are determined by applying ordinary American Cyanamid principles. Where damages adequately compensate the unsuccessful tenderer, the court will normally lift the suspension. The availability of a speedy trial does not, by itself, make damages inadequate or justify maintaining the suspension. Loss of reputation must be supported by cogent evidence of a real prospect of significant financial loss which is attributable to losing the contract and irrecoverable in damages. If damages are inadequate for both parties, the court assesses the balance of convenience, including delay, public interest and the successful bidder’s interests.

Kellogg Brown & Root Limited challenged the award by the Mayor’s Office for Policing and Crime of a framework agreement and proposed property-services contract to Sodexo Limited. The challenge triggered the automatic suspension under regulation 95(1) of the Public Contracts Regulations 2015. MOPAC applied under regulation 96(1)(a) to lift the suspension. KBR applied for an expedited trial.

The court considered whether KBR had a serious issue to be tried, whether damages would be adequate for either party, where the balance of convenience lay, and whether expedition was appropriate.

1. Applicable test. The application to lift the automatic suspension was governed by ordinary American Cyanamid principles. The court considered whether there was a serious issue to be tried, whether damages would be an adequate remedy for KBR, whether damages would be adequate for MOPAC, and, if necessary, where the balance of convenience lay.
2. MOPAC had conceded that there was a serious issue to be tried. In the absence of exceptional circumstances or a clear knockout point, it was inappropriate to revisit the merits at the balance-of-convenience stage or conduct a mini-trial.
3. The court rejected the submission that the prospect of a speedy trial could make damages inadequate. The alternative formulation asking whether it was just to confine the claimant to damages was treated as expressing the same principle. The availability of an expedited trial was not, without more, a reason to maintain the suspension.
4. KBR’s alleged redundancies, loss of efficiencies, loss of knowledge, reputational harm and reduced competitiveness were either quantifiable, speculative, unsupported by sufficient evidence, or ordinary commercial consequences of losing a tender. KBR had not shown a real prospect of significant financial loss attributable to loss of the contract which would be irrecoverable in damages.
5. MOPAC had shown a serious risk of difficult-to-quantify non-financial prejudice if implementation of the proposed contract were substantially delayed, including delay to enhanced technological and operational services. The application for expedition was refused because disclosure, amendments and witness evidence meant that expedition would prejudice MOPAC and interfere with the proper administration of justice.
6. The balance of convenience clearly favoured lifting the suspension. The public interest in lawful procurement did not, without exceptional circumstances, require continuation of the suspension. It was just in all the circumstances to confine KBR to damages. MOPAC’s application was granted and KBR’s application for expedition was refused.