Clyde Procure Alert: Maintaining The Automatic Suspension - Buyer Beware

Lancashire Care NHS Foundation Trust & Blackpool Teaching Hospitals NHS Foundation Trust v Lancashire County Council [2018]

The Court has upheld an automatic suspension of a contract award, going against a recent trend of such suspensions being lifted. This is a cautionary tale for public bodies making applications to lift suspensions, and develops the law in this area.

The Court applied a number of established tests and the case was the first to apply the Supreme Court's decision on damages in Nuclear Decommissioning Agency v Energy Solutions EU Ltd ("NDA") in the context of the interim application to lift the automatic suspension of a contract award.

In late 2017, Lancashire County Council ("the Council") ran a Light Touch Regime procurement under the Public Contract Regulations 2015 ("the PCR"), for part of its "0-19 Healthy Child Programme" (a nursing and mental health programme for babies, children and adolescents, worth an estimated £104m).

Lancashire Care NHS Foundation Trust and Blackpool Teaching Hospitals NHS Foundation Trust ("the Trusts") were the incumbent providers of the services and lost the tender by a score of 78.5% to 74.43% to a private sector bidder, Virgin Care Services Limited ("Virgin").

The Trusts' and Virgin's bid prices were almost identical, accounting for a difference of just 0.07% in their overall scores on that factor.

Following announcement of preferred bidder, the Trusts issued proceedings alleging a number of deficiencies in the Council's evaluation of bids.

The proceedings automatically suspended the contract award to Virgin pursuant to Regulation 95 of the PCR. The Council, in accordance with Regulation 96 (1) (a), applied for an interim order to lift the suspension so that they could go ahead and enter into the contract with Virgin.

As an interim application, the Court applied the established "American Cyanamid" principles as summarised in Covanta Energy Ltd v MWDA [2013] EWHC 2922 (TCC). These principles are, in short, as follows:

Is there a serious issue to be tried? If there is a serious issue to be tried, would damages constitute an adequate remedy for the claimant? In considering whether damages would represent an adequate remedy, where does the balance of convenience lie between the claimant and the defendant? When assessing the adequacy of damages, the Court considered the application of the Supreme Court's decision in NDA. There, the Supreme Court ruled that a claimant does not always have an...