In Elekta Limited v The Common Services Agency [2011] CSOH 107 the Court of Session has considered the circumstances in which it is prepared to allow a legal challenge to prohibit the contracting authority from entering into a contract with the successful tenderer.
Facts
In November 2010, the Common Services Agency ("CSA") commenced a public procurement on behalf of five Scottish health boards to procure a public contract for the supply, installation, maintenance and training of staff for a range of radiotherapy equipment for five cancer centres within NHS Scotland.
The only bid for the contract was submitted by Varian Medical Systems ("Varian") and so Varian was successful. Elekta Limited ("Elekta"), an interested contractor, considered the terms of the tender document to be such that everyone other than Varian was effectively excluded from bidding. As a result, Elekta commenced proceedings under the Public Contracts (Scotland) Regulations 2006 ("the Regulations") prior to the end of the mandatory standstill period.
Argument
In essence, Elekta argued that the requirement for the equipment to be compatible with CSA's existing radiotherapy management system – a system supplied by Varian in relation to four of the five health boards – was in breach of the Regulations. In their view, this requirement made it impossible for anyone other than Varian to bid successfully or at least made it practically impossible to succeed. On that basis, Elekta argued all potential bidders were not treated equally.
In terms of Regulation 47(10) a contracting authority is prohibited from entering into a contract (in this case the contract with Varian) once court proceedings have been raised "unless (a) the proceedings are determined, discontinued or disposed of or (b) the Court by interim order brings an end to that prohibition". CSA sought a court order to bring an end to that prohibition.
Decision
Lord Glennie disagreed with Elekta's submissions. Relying on the ECJ judgment in Concordia, the mere fact that the requirement could only be met by one bidder did not contravene the principle of equality. In his view, a contracting authority must be entitled to decide what it wants and the functional requirements it wishes to satisfy. The fact that criteria can only be met by one bidder, or a limited range of bidders, does not per se contravene the principle of equality. Moreover, such criteria could only be considered discriminatory if they could not be objectively justified.
As such, Lord Glennie considered the requirement that certain equipment be compatible with CSA's existing radiotherapy management system was objectively justified and found Elekta's "attack" on CSA's bidding process as having no reasonable prospect of success.
In the circumstances, the consequences of allowing the suspension to continue were held to be so adverse to CSA's legitimate interests that Lord Glennie granted an order in terms of Regulation 47(10)(b) thereby ending the prohibition and allowing CSA to contract with Varian.
Comment
The Regulations provide a range of remedies for aggrieved contractors including the ability to set aside contracting authorities decisions, or to take immediate action to suspend the contract award itself. As with any legal action, and as highlighted by this case, before commencing proceedings parties should consider carefully whether there is sufficient merit in their grounds of challenge before proceeding. While raising proceedings prior to contract award may be helpful to halt the award of a contract where a contractor has serious concerns about the legitimacy and legality of a procurement process, it may prove to be a costly exercise for the challenging party.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
