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In a recent judgment, the NHS Northamptonshire Integrated Care Board (ICB) joined the long list of contracting authorities who have successfully lifted the automatic suspension in a public procurement dispute. The suspension, which halts contract awards during legal challenges, was contested by One Primary Care (OPC), the incumbent provider of an Urgent Care Centre contract.
The ICB's procurement process saw OPC, the current provider, ranked fourth with a score of 55.2%, while DHU Healthcare was the winner with 64.55%. OPC's legal challenge cited breaches of transparency, scoring, and conflict of interest issues. During the challenge period, the ICB extended OPC's contract on an interim basis, terminable on three months' notice.
OPC argued that damages would not be an adequate remedy because of the cumulative effect of various business impacts, including lost opportunities and reputational harm. However, the judge found that OPC could be adequately compensated with damages. Conversely, the ICB's inability to provide improved services during the suspension posed a greater risk. The judge found that the balance of convenience was “firmly in favour of lifting the suspension." The absence of a standard cross-undertaking in damages to the ICB was also “the strongest reason, if not the sole reason, to grant the application to lift the suspension”.
A notable feature, although not entirely uncommon where the challenger is the incumbent, was the argument that the loss of the contract would force the Claimant to disband their workforce, causing detriment which would be hard to compensate in damages. Although this argument carried weight in Counted4 CIC v Sunderland City Council [2015] EWHC 3898 (TCC), it was given short shrift here [our emphasis added]:
“… reliance is placed on the decision of Carr J in Counted4 … procurement for the provision of substance misuse treatment services [in which[ the claimant company had been established solely for that purpose and had been the incumbent provider since 2008. In addressing both the adequacy of damages as a remedy for the claimant and the balance of convenience, the court found that the claimant had a highly and uniquely trained workforce, which it had taken years to develop, with skills not available in the wider market. This would be lost to the claimant and cause irremediable harm. Despite the evidence as to potential cost cutting, the position is very different in this case, where it is the central administrative team that may be lost to OPC and there is no significant evidence of any unique skills. Further, in Counted4, there was in contrast, no evidence at all that the defendant would suffer any damage if the suspension were not lifted. Again that is not the position here. In short, each decision turns on its own facts and neither of these authorities, and the approach of the court in these cases, displaces my view as to where the balance of convenience falls in the present case.
This judgment marks another successful application to lift the automatic suspension, highlighting contracting authorities' strong track record in such cases. It remains to be seen if the revised test under section 102 of the Procurement Act will alter this trend.
Our article Preparing for change: Challenges/remedies examines what this revised test may mean for bidders and authorities.
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