Public Procurement: How will the Courts Approach Applications to Lift Automatic Suspension Under The Public Contracts (Amendment) Regulations 2009?

The case of Exel Europe Ltd v University Hospitals Coventry and Warwickshire NHS Trust [2010] EWHC 3332 (TCC), is the second case within one month to consider an application under Regulation 47H of the Public Contracts Regulations 1996, as amended by the Public Contracts (Amendment) Regulations 2009, better known as the Remedies Directive. Regulation 47G automatically suspends the award of a public contract when a claimant issues a claim form against the contracting authority during the standstill period and Regulation 47H sets out the criteria under which a Court may lift the automatic suspension under 47G(1).

In the first case, Indigo Services v The Colchester Institute, the Court held that in situations where a contracting authority applied to have the automatic suspension lifted, the usual American Cynamid guidelines applied. Here, in Exel Europe v University Hospitals Coventry and Warwickshire NHS Trust, Mr Justice Akenhead confirmed this approach and went further to consider how the courts should go about dealing with procurement processes which have been automatically suspended under the Regulations.

The Facts:

In about 2009, University Hospitals Coventry and Warwickshire NHS Trust, the Defendant, decided to transfer their responsibility for managing and operating the Healthcare Purchasing Consortium ("HPC") by establishing a framework agreement with a single operator. The HPC is a collaborative procurement hub run by the Defendant on behalf of itself and some 40 NHS Trusts in West Midlands and elsewhere and provides a wide variety of medical services, equipment, medications and other medical related items.

In February 2010, it was resolved that a competitive public procurement process should be undertaken and the framework agreement should be established by no later than 30 September 2010. This date was significant as the agreements with all the current HPC subscribers expired on 31 March 2010. The Contract Notice was published on 11 March 2010. On 19 April 2010, five tenderers pre-qualified, including Exel Europe Ltd and HCA International Ltd.

From an early stage in the procurement process, Exel Europe believed that the information provided in the Invitation to Tender ("ITT") was insufficient for the restricted procedure which had been identified in the Contract Notice. As a result, Exel Europe eventually withdrew from the tender process on 28 May 2010. The only tenderer to submit a bid was HCA International. In due course the...