12 October 2021

Our latest procurement law update covers three recent judgments of the Technology and Construction Court. The cases provide some useful guidance from the Court in relation to the automatic suspension, expedited trials and protective proceedings if issues arise mid procurement process.

Maintaining the automatic suspension: Draeger Safety UK Ltd v London Fire Commissioner [2021] EWHC 2221 (TCC)

Draeger provides a recent and relatively infrequent example of the Court upholding an automatic suspension in a procurement challenge so that the Court can decide whether a contract award can go ahead at an expedited trial. An automatic suspension on contract signature arises when a challenger issues a claim at Court disputing the outcome of a public procurement process.

Draeger concerns the London Fire Brigade’s (‘LFB’) procurement of respiratory protective equipment for firefighters. The Court applied the well-known ‘American Cyanamid’ principles in deciding whether the contract with LFB’s winning bidder should go ahead now (and leave the challenger with a damages case only and “pay twice” risk for the authority) or whether the suspension should remain in place pending an expedited trial of the issues in the case. 

Applying the principles, the Court considered:

  1. Was there a serious issue to be tried? The allegations made by Draeger of manifest error in the scoring of bids, a breach of transparency and equal treatment, and failure by LFB to investigate an abnormally low tender satisfied this relatively low threshold test.
  2. Would damages be an adequate remedy for Draeger? In summary, Draeger said that it risked reputational damage that could not be quantified in damages if it failed to secure the contract.
  3. Would damages be an adequate remedy for LFB? In summary, LFB said that maintaining the automatic suspension would be to the detriment of LFB as it would not benefit from the “significant operational benefits” that the rollout of the improved equipment was expected to bring now, and this could not be quantified in damages at a later stage if Draeger’s claim failed.
  4. The balance of convenience: Do any ‘special factors’ justifying expedition exist? The Court said it had the resources to facilitate an expedited trial in October 2021 – just two months from the date of this judgment. It said that the duration of the suspension would therefore be short, and the impact on the timeline to the proposed procurement limited.

The Court held that the balance of convenience lay in upholding the automatic suspension, pending the outcome of an expedited trial in two months’ time.

In this case, the Court timetable was stated to have been a “significant factor”, with a gap in the list appearing two months earlier than anticipated. It will be interesting to see whether this case is a move towards reviewing award decisions swiftly with a suspension in place, or is limited to its facts, due to the specific early availability in the Court diary.

The decision in Draeger is a reminder that the Court is willing to maintain suspensions in procurement challenges – particularly where an expedited trial has been requested and/or can be facilitated.

Expedited trials without an automatic suspension: Consultant Connect Ltd v NHS Bath and North East Somerset, Swindon and others [2021] EWHC 2398 (TCC)

In contrast, the Claimant’s application for an expedited trial was refused by the Court in the case of Consultant Connect Ltd (‘CCL’). Unlike in Draeger, there was no automatic suspension in place when the Claimant applied for an expedited trial.

CCL is a provider of advice and guidance services in the healthcare sector. It issued a claim against three Clinical Commissioning Groups (‘CCGs’), challenging their decision to award a call-off contract under a framework to a third party.

CCL alleged (amongst other allegations) that the direct award was unlawful, as the use of call-off contracts was not provided for in the initial tender notification. Citing public interest considerations, CCL filed an application seeking directions for an expedited two-day trial. CCL argued that the case would turn on simple document analysis and arguments of legal principle and was one that could be decided 'in a very short period of time'.

The Court refused CCL’s application on the basis that there remained significant factual and legal issues to be explored, and that the proposed trial timetable was therefore 'unrealistic'. The Court was also concerned that running the trial in October 2021 (just two and a half months from the date of this judgment) would prejudice the CCGs’ preparation of their case.

The Court stated that 'a case warranting expedition must be one which is out of the norm to at least some extent'. In procurement cases, this presumably means a case where there is (at least) an automatic suspension in place. In this case, with no automatic suspension in place, CCL ultimately failed to show that there was a 'real, objectively viewed, urgency' to justify expedition.

Protective proceedings mid procurement process?: CMAC Group UK Ltd v Abellio East Midlands Ltd [2021] 9 WLUK 164

A bidder cannot usually wait to bring a claim until it has found out whether it has been successful or not in a procurement process if it considers there has been a breach of the authority’s obligations mid process – for example, a non-compliant ITT.

The judgment in CMAC suggests that it is possible for a claim to be brought before a procurement exercise is concluded and then stayed until the point at which the loss for the bidder would ordinarily crystallise (i.e. on award if that bidder lost).

The claim – which concerned a tender process for replacement bus and taxi services – alleged a failure by the Defendant to identify in the tender documents the application of the procedures set out in the Utilities Contracts Regulations 2016

Procurement challenges must be brought swiftly – usually within 30 days of the Claimant’s knowledge of the breach. In this case, time would start to run from the date the tender documents were published. With the contracts not yet awarded, the Claimant was unable to determine what – if any – loss it had suffered, but risked bringing its claims ‘out of time’ if it waited for publication of each of the contract award decisions.

CMAC therefore decided to proceed with its claims and apply for an immediate stay of proceedings in order to protect its position on limitation. CMAC’s application was successful, and the Court ordered a stay until the award of the relevant contracts.

Whilst this case builds on established principles, it is possible that this case encourages more bidders to issue claims mid process for protective reasons until the outcome of the procurement process is known.

How can Burges Salmon help?

We advise bidders and authorities on the procurement process and challenges to awards. For more information, please contact Richard Binns, Ian Tucker and Chris Jackson in our specialist procurement disputes team.

This article was drafted by Richard Binns and Olivia Pointon.

Key contact

Richard Binns

Richard Binns Partner

  • Dispute Resolution
  • Procurement Disputes
  • Procurement and Subsidy Control

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