Council faces procurement challenge from bidder who missed out on contract by 0.03

West Sussex County Council is facing a procurement challenge from a bidder who missed out on being awarded a ten-year highways contract by just 0.03 marks, it has emerged.

The case of Amey Highways Ltd West Sussex County Council [2018] EWHC 1976 (TCC) concerns the county council’s procurement of a contract known as the “Highways Term Service Contract 2018-2028”. The procurement was governed by the Public Contract Regulations 2015.

The council decided to award the contract to Ringway Infrastructure Services Ltd. Amey’s overall score was assessed to be 85.48, which Ringway bettered by just 0.03. 

Amey alleges that its score should have been higher than Ringway’s and that it should have been awarded the contract.

Mr Justice Stuart-Smith said Amey’s case could be subdivided into two broad categories of attack:

1. It alleges that instructions given by the council on 19 January and/or 2 February 2018 about how it should structure its presentation of certain staff costs were unlawful. It was not in dispute that implementation of the instructions had the effect of reducing the score that Amey’s tender would receive in respect of price. [The judge described this category generically as “the Instruction Claims”];
2. It alleges manifest error in the scoring of two criteria and that it should have been awarded a higher score for those criteria. [The judge described this category generically as “the Manifest Error Claims”]

By its defence, which was served on 30 April 2018, the council:

i) alleged that the Instruction Claims were time-barred, but did not otherwise plead a substantive defence: it merely pleaded a bare denial of the substance of the complaints;

ii) pleaded substantive grounds of defence to the Manifest Error Claims.

It fell to the judge to decide the following issues:

i) Should the Instruction Claims be struck out because they were time-barred? This issue took into account Amey’s request for an extension of time;

ii) Should summary judgment be entered for Amey on some or all of the claims on the basis that the council had no reasonable prospects of successfully defending them? This issue took into account the council’s application to amend its defence.

iii) Should the Manifest Error Claims be struck out or summary judgment entered in respect of them on the basis that they disclosed no reasonable grounds for bringing them and/or that the Amey had no reasonable prospects of succeeding in the claims?

Mr Justice Stuart-Smith said he was not convinced that this was one of those relatively rare cases where the claim could be seen to be overwhelmingly strong or weak. “I have not been addressed and am not in a position to make a reliable estimate of the strength or weakness of Amey’s claim or the Council’s proposed substantive defence save to say that neither appears to be fanciful on the materials and submissions that have been available and made at the present hearing. In the circumstances that I have outlined, the best course is to give permission to the Council to amend in the terms of its draft amended Defence. The relative strengths and weaknesses of the parties’ substantive positions can then be tried properly and a reliable judgment formed.”

The judge also concluded:

• Amey’s application for extensions of time for the Instruction Claims should be granted. Permission was granted to the council to amend its Defence in accordance with the submitted draft. This was without prejudice to Amey’s right (if so advised) to apply to strike out all or part of the amendments at a later date. There should be no order for summary judgment or to strike out relevant parts of the pleadings in either direction on the Instruction Claims.
• The council’s application to strike out the Manifest Error Claims was rejected. “The Manifest Error Claims do not assert or necessarily imply an assertion that it was not open to the Council to take account of weaknesses in the savings cards submitted by Amey. What they do assert is that the Council’s understanding and interpretation of the savings cards was wrong and irrational and that the error and irrationality led to error and irrationality in the score that was awarded. Determination of that issue requires close consideration of the factual evidence that is beyond the scope of a strike out/summary judgment application. All that can be said at present is that the Council has not shown that the Manifest Error Claims have no reasonable prospect of success. Other than that, I express no view on the merits of the Manifest Error Claims.”

UPDATED

West Sussex has decided to re-run the procurement of the highways contract, with existing arrangements remaining in place until at least March 2019.

A county council spokesperson said: “The council received a legal challenge to the recent outcome of the procurement of our highways term maintenance contract. Following some preliminary legal proceedings the Court has ruled that a full litigation process would be needed to agree an outcome for this case.

“At a preliminary hearing on 12th July 2018, the Court held that the claims had been made outside the primary statutory time limit but granted the claimant an extension of time. The Court also dismissed the claimant’s application for summary judgment.

“Our priority in this case has always been to make sure we have the right contract in place to ensure our highways are maintained properly and to limit any unnecessary spending of tax payers’ money. As a result we have taken the decision to proceed no further with the existing procurement process to ensure that the risk of legal challenge can be mitigated. We intend to commence with a new procurement in due course.

“In the interim we have agreed our current provider, Balfour Beatty Living Places, will continue to deliver a high quality service across all aspects of highways for the County Council until at least the end of March 2019."