High Court Concludes That HS2 Procurement Process Was Lawful

• Published date: 10 January 2024
• Subject Matter: Government, Public Sector, Government Contracts, Procurement & PPP
• Law Firm: Herbert Smith Freehills
• Author: Ms Nusrat Zar, Andrew Lidbetter, Jasveer Randhawa, Chloe Woodward and James Robson

In Siemens Mobility Limited v High Speed Two (HS2) Limited [2023] EWHC 2768 (TCC), the Technology and Construction Court held that there was no manifest error in the rolling stock procurement run by High Speed Two (HS2) Limited ("HS2"). HS2 was found not to have breached the key principles of equal treatment, non-discrimination and transparency.

The judgment provides helpful guidance for public authorities running public procurements as to the approach taken by the Courts when scrutinising procurement processes. It also provides an indication of what a claimant must demonstrate in order to make out a claim of manifest error.

Key points

• The Court reaffirmed its supervisory role in procurement disputes. Its "role is not to carry out an assessment...and substitute its own scores" or decision.
• This is particularly important for scoring challenges, which feature prominently in many procurement claims. It is not sufficient for a claimant to "rely on deficiencies" in the winning tenderer's bid to sustain a claim for manifest error. A claimant must identify some other factor that the public authority did not consider, or did consider but which was a breach of the invitation to tender.
• Utilities have a wide discretion to negotiate changes to a winning tenderer's bid, although their freedom to do so is not unlimited. A change to address a breach of the invitation to tender would not be permitted, and utilities will need to ensure that they consider the impact of any change on the tender. However the mere exploration of a change (including where formal proposals are made but scope or price is not agreed) will not be enough to demonstrate a substantial change such that the contract is materially different and a utility must run a new procurement process.
• A pension held by virtue of previous employment is too remote a financial interest to constitute a conflict of interest. Utilities and other contracting authorities should nevertheless ensure their procurement process is structured in a way which guards against conflicts of interest having any impact on decision-making (such as a layered governance structure and tenderer anonymisation).
• Contracting authorities should take care when communicating with tenderers and should ensure that this is in writing. Phone calls to tenderers even if with the intention of expediting action or providing information (which are then followed up in writing) may "give rise to a perceived lack of transparency".
• The Court cautioned...