Award of focus group services contract without competition by government during pandemic was unlawful for apparent bias, High Court judge finds

The Government’s decision to award a £560,000 contract for the provision of focus group and communications support services during the pandemic to Public First without public notice or competition gave rise to apparent bias and was unlawful, a High Court judge has ruled.

The Government had sought to rely on the “extreme urgency” provisions in Regulation 32(2)(c) of the Public Contracts Regulations 2015 in relation to the award of the contract by letter dated 5 June 2020 but with an effective date of 3 March 2020 and an expiry date of 2 September 2020.

The award of the contract followed a strong recommendation by Dominic Cummings, then Chief Adviser to the Prime Minister. Public First was set up by former colleagues of the Cabinet Office Minister Michael Gove and Mr Cummings.

In R (Good Law Project) v Minister for the Cabinet Office [2021] EWHC 1569 (TCC) the claimant, the Good Law Project, relied on the following grounds of challenge:

1. There was no basis for making a direct award under Regulation 32(2)(c). The claimant’s case was that the direct award of the contract to Public First was not strictly necessary. The Government already had several existing contracts with other suppliers which it could have used to commission the work; alternatively the duration of the contract and services commissioned under the contract should have been restricted to a few weeks, enough time to meet the defendant’s needs, while it conducted a competitive procurement of the services.
2. The award of the contract for a period of six months was disproportionate. The claimant’s case was that even if Regulation 32 were applicable, the contract should have been restricted to the defendant’s immediate, short term needs, pending a competitive process to procure a longer term supply of the services.
3. The decision to award the contract to Public First gave rise to apparent bias contrary to principles of public law. The claimant’s case was that the fair minded and informed observer would conclude that there was a real possibility of bias, having regard to the personal connections between the decision-makers and the directors of Public First.

The Cabinet Office disputed each ground of challenge:

• In respect of Ground 1, its case was that the conditions for making an award under Regulation 32(2)(c) of the PCR 2015 were satisfied. The immediate and continuing provision of the research services provided by Public First were necessary to address the serious public health risks posed by the Covid-19 pandemic. There was no time to run an accelerated procurement under the open or restricted procedures, competitive procedures with negotiation, or to place a call off contract under any existing framework. Other potential suppliers were not used because they could not provide the requisite services.
• In respect of Ground 2, the defendant’s case was that the award of the contract for a period of six months was not disproportionate. The scale of the national emergency was unprecedented in peacetime. The provision of the research services was essential to ensure effective communications of vital health messages to the public. The defendant could not risk the contract expiring before the peak of the crisis had passed, as to which there was no certainty. It would have been disproportionate to divert resources from other critical tasks to conduct a procurement exercise for these services.
• In respect of Ground 3, the defendant’s case was that, in all the circumstances of the case, a fair-minded and informed observer, who had knowledge of the facts, would not conclude that there was a real possibility that the decision maker was biased. The decision to award the contract to Public First was based on its expertise, experience and availability to undertake the required specialist services that had to be delivered at speed. Personal connections were not relevant factors in the decision, as opposed to professional assessment.

The Cabinet Office also disputed that the Good Law Project, a not-for-profit organisation that pursues strategic litigation, had sufficient standing to bring the challenge by way of judicial review.

Mrs Justice O’Farrell concluded that the Good Law Project had sufficient interest in bringing the judicial review to establish standing. This was because:

1. The claimant was a non-governmental organisation with expertise and experience in holding the Government to account in respect of its public procurement decisions. It had a sincere interest in promoting good public administration, including compliance with the PCR 2015 and lawful conduct of the public procurement regime. It had no ulterior motive in pursuing the challenge.
2. The current claim was not one that an economic operator could realistically be relied on to bring. The context was the award of a public contract in circumstances where, for justifiable reasons, there had been no competition. Therefore, unlike most public procurements, there was no disgruntled bidder, who could be expected to challenge any perceived failings in the procurement process that were sufficiently serious potentially to affect the outcome. Any attempt by another economic operator to bring a challenge would face a very high hurdle to establish financial loss and therefore another economic operator would be unlikely to risk the legal costs of proceedings.
3. The gravity of the issues raised, concerning the defendant’s public law obligations against the background of an unprecedented public health crisis, justified the scrutiny of the court and, where appropriate, the grant of a public law remedy.

The High Court judge dismissed grounds 1 and 2 of the judicial review challenge but said ground 3 succeeded.

On ground 3, Mrs Justice O’Farrell said: “The fair minded and informed observer would have appreciated that there was an urgent need for research through focus groups on effective communications in response to the Covid-19 crisis and that those research services were required immediately, necessitating reliance on Regulation 32(2)(c) of the PCR 2015.

“The fair minded and informed observer would have appreciated that it was vital that the results and conclusions from the research were reliable and that Mr Cummings was uniquely placed, given his experience and expertise, to form a rapid view on which organisation might best be able to deliver those urgent requirements. His professional and personal connections with Public First did not preclude him from making an impartial assessment in this regard.

“However, the Defendant’s failure to consider any other research agency, by reference to experience, expertise, availability or capacity, would lead a fair minded and informed observer to conclude that there was a real possibility, or a real danger, that the decision-maker was biased.”

The Good Law Project had therefore “established its case that the circumstances in which the contract was awarded to Public First gave rise to apparent bias”.

In relation to ground 1, Mrs Justice O’Farrell found that the Cabinet Office had been “entitled to rely on Regulation 32(2)(c) of the PCR 2015 in awarding the contract to Public First:

1. the extreme urgency caused by the Covid-19 pandemic was unforeseeable, unpredictable and not attributable to the defendant;
2. the defendant determined that it needed additional qualitative research carried out immediately to inform its policy and strategy on public communications in response to the pandemic;
3. the time limits for a conventional public procurement could not be complied with and would not have generated a contract for the services that were needed immediately;
4. procuring the services under the contract was strictly necessary; the defendant decided that it needed such services as part of its response to the Covid-19 pandemic and failure to provide effective communication of the message necessary to change public behaviour would have put at risk the health of the public.

In relation to ground 2, the judge found that for the reasons set out in her findings on ground 1, the award of a contact for a period of six months was not disproportionate.

A Cabinet Office spokesperson said: “We welcome the court’s ruling that we were entitled to award the contract on grounds of extreme urgency in response to an unprecedented global pandemic.

“The Judge recognised the very complex circumstances at the height of the pandemic and that failure to provide effective communications would have put public health at risk."

The spokesperson added: “The judgment makes clear that there was no suggestion of actual bias and that the decision to award the contract was not due to any personal or professional connections.

“Procedural issues raised in this judgment have already been addressed through the implementation of the independent Boardman review of procurement processes.”

According to a report on the BBC, Good Law Project director Jo Maugham said: "This is not government for the public good - it is government for the good of friends of the Conservative Party."

The BBC also reported a spokesman for Public First as saying the company was "deeply proud of the work we did in the early stages of the pandemic, which helped save lives".

He added: "The judge rejected most of the Good Law Project's claims, not finding actual bias in the awarding of this work, nor any problems with the pace or scale of the award."