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Automatic suspensions - power to the public authority?
Trowers Public Insight

Automatic suspensions - power to the public authority?

A recent case illustrates that public authorities can still be successful in lifting the automatic suspension of a contract award on the issue of a procurement challenge even if there are triable issues at stake.

The recent case of John Sisk & Son Holdings Ltd v Western Health and Social Care Trust [2014] NIQB 56 related to the procurement of a framework agreement by Western Health and Social Care Trust (the Trust) which included a construction contract for a new local hospital.

John Sisk & Son Holdings Ltd (Sisk) submitted a tender which received a score of 92.69, narrowly losing out to the preferred bidder's score of 92.70. Sisk started proceedings alleging that the procurement procedure had breached the Public Contract Regulations. This triggered the automatic suspension under Regulation 47G which prevented the Trust from completing the framework agreement with the preferred bidder. The Trust applied to the High Court to lift the suspension so that it could proceed with the building of the hospital without delay.

To decide whether or not the suspension should be lifted the Court considered the following established principles:

  • Is there a serious issue to be tried?
  • Would damages be an adequate remedy?
  • Where does the balance of convenience lie if damages are not adequate?

On the question of whether there were serious issues to be tried, the Court found that on the on the facts of the case there were a number of claims which deserved full investigation at trial including:

  • Whether the request by the Trust for further information from the preferred bidder demonstrates that the preferred bidder's tender was incomplete and should have been rejected
  • Whether Sisk's proposal in relation to flooring materials had been under-scored
  • Whether certain aspects of the preferred bidder's tender had been over-scored
  • Whether the tender documents were ambiguous in relation to sustainability requirements

Given that there were serious issues to be tried, the Court then considered whether the suspension should remain until trial. The deciding factor was that if damages were an adequate remedy for Sisk, then it could seek satisfactory redress at trial even if the Trust completes the contract with the preferred bidder.

The Court found that damages were an adequate remedy, concluding that loss of profits and the value of possible future call-off contracts could be determined with assistance from relevant experts. The Court also found that the narrow difference in scores between the bidders removed the complication of calculating damages for "loss of a chance" because any error found (in Sisk's favour) at trial would lead to the conclusion that Sisk ought to have been appointed as preferred bidder. Lastly the Court considered that the balance of convenience was firmly in favour of the public interest in the timely construction of the new hospital and the delay caused by maintaining the suspension was not justifiable. The Court therefore lifted the suspension.

We advise our clients on how to reduce the risk of receiving procurement challenges and on making procurement processes robust so as to withstand any challenges brought. For more information please contact Helen Randall or Amardeep Gill.