The bidder with no statutory rights

Most competitions run by local authorities attract UK bidders, and the question of who is owed statutory duties never arises. It arises more often than it used to. Waste, energy, highways, digital systems and construction supply chains now draw in suppliers established outside the UK, not all of them from states with a procurement agreement with us. When one loses and complains, the first question is not whether the evaluation was sound. It is whether the authority owed it anything at all.

The Technology and Construction Court answered a version of that question in Ecolog International FZE v Secretary of State for Defence [2026] EWHC 2154 (TCC), handed down by Pepperall J on 12 August 2026. It construes defence regulations since repealed, but has clear implications for procurement under the Procurement Act 2023.

What was decided

The MOD procured soft facilities management for British bases in Cyprus under the Defence and Security Public Contracts Regulations 2011 and awarded to Sodexo. Ecolog, established in the United Arab Emirates, came second. It was common ground that Ecolog was not an economic operator under those Regulations and could not sue for their breach. It therefore pleaded an implied tender contract obliging the MOD to run the procurement fairly, equally and transparently.

Pepperall J held that an implied tender contract did arise, on the issue of the invitation and Ecolog’s tender, but that its terms were limited to considering that bid, alongside the others, in good faith. There was no wider contract to run the procurement fairly, equally or transparently.

Blackpool, thirty-six years on

The starting point remains Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195, where the council failed by error to consider a conforming tender submitted before the deadline. Bingham LJ held the invitation to be an offer and the tender an acceptance, giving the club a contractual right to have it opened and considered alongside the others. He was equally clear that contracts are not lightly to be implied. Wider terms were refused in JBW Group, Adferiad Recovery and Excession Technologies, and Ecolog refuses them again. There is, Pepperall J was explicit, no rule of law that a tender contract will be implied at all, or as to its terms. It depends on the facts.

Three findings deserve attention from anyone drafting tender documents.

Boilerplate cuts one way only. The pre-qualification questionnaire stated that only the express terms of a written contract would have contractual effect, and no tender contract arose at that stage. The invitation carried no equivalent wording, and reservations of the right to change, waive or cancel the process did not prevent the limited contract arising. Reservations defeat the wide contract, not the narrow one.

Stating that a procurement will be conducted in accordance with the applicable regulations recognises the duties owed to those the regulations protect. It is not an offer to extend them to a supplier the regulations exclude, and nor was a statement that all potential providers would be treated equally.

The equality argument by sidewind failed. Ecolog reasoned that since equal treatment was owed to Sodexo, and only those two bidders remained, the MOD could not treat one equally without treating both equally. Sodexo would have had no claim had it been treated more favourably, and the authority’s intention cannot vary with the number of respondents.

Why it is harder still under the 2023 Act

That last argument is the one to watch, because the Procurement Act 2023 makes it harder to run rather than easier.

Section 89 defines a treaty state supplier as one entitled to the benefits of an international agreement specified in Schedule 9, and confers that status only to the extent of that entitlement in relation to the procurement actually being carried out. Section 90 prohibits discrimination against such a supplier. Section 100 provides that the duties in Parts 1 to 5, 7 and 8 are owed, for the purposes of civil proceedings, to UK and treaty state suppliers. So the section 12(2) duty to treat suppliers the same, the nearest thing the Act has to equal treatment, is not owed to a supplier outside the network at all. Where Ecolog argued against the territorial definition of an economic operator, a claimant under the Act faces a provision that names the suppliers to whom the duties run.

The Act also expressly permits what the old regulations left to inference. An authority may disregard a tender from a supplier that is not a treaty state supplier, or decide not to award to one, under section 19(3)(b), and may exclude such a supplier from a competitive flexible procedure under section 20(5)(c), extending under section 20(5)(d) to those intending to sub-contract to one. Cabinet Office guidance adds that the UK operates a generally open regime and that value for money should drive any use of those powers.

Two coverage points matter particularly here. Treaty status is contract-specific rather than company-specific, and each agreement’s market access schedule distinguishes central government entities, sub-central entities and utilities. A supplier may be a treaty state supplier against a government department and not against a district council. Part 7 also does not prevent below-threshold contracts being reserved to UK suppliers.

For competitions still running under the Public Contracts Regulations 2015 the architecture is the same, regulations 89 to 91 confining the actionable duty to economic operators identified by home state and applicable agreement.

The Act does supply a route the old regulations did not. A supplier that is neither a UK nor treaty state supplier cannot bring civil proceedings under the Act, but may complain to the authority or to the Procurement Review Unit. Expect that route to be used by the bidders who cannot use Part 9.

What survives, and what is left open

The possibility of an implied tender contract survives all of this, outside the statutory regime as much as within it: below threshold, in exempt and light touch procurements, and in competitions the Act does not reach. A supplier shut out of Part 9 may still have a contractual claim, running on a different clock and yielding different remedies. Whether it has one, and what that contract contains, turns on the authority’s own documents.

The judgment records the MOD’s guidance, which Pepperall J called wise, advising procurers to state clearly that opening a competition to suppliers from outside the UK and Gibraltar is not an admission that statutory rights are extended to them. The same guidance notes that judicial review may in the alternative be available. Pepperall J did not have to decide that, and did not.

Four practical points

1. Establish coverage before the notice goes out. Check Schedule 9 and the relevant market access schedule against the authority’s own classification and against what is actually being bought.
2. Say what you mean in the documents. If the competition is open to suppliers with no treaty rights, state that participation does not extend rights under the Act to them.
3. Take any section 19 or section 20 decision at the outset and record the reasons. A decision taken after tenders are opened looks like a reaction to the identity of the bidder.
4. Where a bidder has been admitted and an implied tender contract has arisen, treat the duty to consider its tender in good faith as a real one. Reservations of the right to change or cancel will not displace it.
5. The exclusion of the implied tender contract is likely to be construed narrowly. Any ambiguity will likely be construed in favour of the bidder, being the party dealing on the authority’s terms. If a purported exclusion of the implied contract is made in the supplier questionnaire (pre-qualification) documents, ensure it is repeated in the invitation to tenderers. 

Ecolog closes the front door for the supplier outside the treaty network, and confirms that the back door is narrow and fact-dependent. It says nothing about the third route, and the guidance the judge commended flags it in terms. Authorities should assume the argument will be run.

Paul Henty is a partner at Beale & Company Solicitors LLP. He is dual-qualified in England and Wales and in Ireland, and advises contracting authorities and suppliers on public procurement, competition and regulatory matters.