Decisions, Decisions - Contract Award Suspended?

Published 17 February 2021

In its recent judgment in the case of Aquila Heywood Ltd v Local Pensions Partnership Administration Ltd [2021] EWHC 114 (TCC), the Court found that the automatic suspension imposed by Regulation 95(1) of the Public Contracts Regulations 2015 (“PCR 2015”) is limited and does not apply where, following a claim having been issued challenging a contract award decision, the defendant Contracting Authority withdraws that decision and awards the contract pursuant to a subsequent, unchallenged, award decision.  

In this case, the claimant (“Aquila”) had started proceedings following the defendant Contracting Authority (“LPPA”) issuing a standstill letter (“the First Award Decision”). That letter confirmed that Aquila was not the preferred bidder and that LPPA intended to award the contract to another bidder, Civica UK Limited (“Civica”).

Following the issuing of the claim, LPPA “rewound” the procurement and re-evaluated the bids submitted. LPPA issued a further award letter which (again) confirmed that it intended to award the contract to Civica (“the Second Award Decision”). No further claim was issued by Aquila, or indeed any other bidder, which raised complaints regarding the Second Award Decision, nor were steps taken by Aquila to amend its existing claim to include allegations relating to the Second Award Decision.

Although the Court was essentially dealing with the issue of costs, the question which had to be determined was whether the automatic suspension, which had been invoked by Aquila’s claim relating to the First Award Decision having been issued, precluded LPPA from entering into the contract following its Second Award Decision.

Regulation 95(2) states that an automatic suspension continues until: (a) the Court brings the requirement to an end by interim order under regulation 96(1)(a); or (b) the proceedings at first instance are determined, discontinued or otherwise disposed of and no order has been made continuing the requirement (for example in connection with an appeal or the possibility of an appeal). However, in response to the question, the Court concluded that upon the proper construction of the PCR 2015, the suspension in this case only prevented LPPA from awarding the contract to Civica pursuant to the First Award Decision and where no challenge was pleaded in respect of the Second Award Decision (either by way of a fresh claim form or amendment to the initial proceedings), LPPA was not required to refrain from entering into a contract pursuant to the Second Award Decision.

The Judge stated:

“…the automatic suspension under regulation 95 is limited so that it prevents the authority from contracting on the basis of the challenged decision. I consider that a construction of the regulation which does not limit the authority's freedom to enter into a contract where no other party has pleaded a claim challenging the decision to award such contract is entirely consistent with the underlying policy of the regulations, namely to strike a fair and sensible balance between the authority's contractual freedom and the need to protect economic operators seeking to challenge the lawfulness of the procurement exercise.”

This judgment will act as guidance to Contracting Authorities faced with proceedings, particularly those that have taken the decision to address the allegations made by the challenger by re-evaluating bids and subsequently wish to proceed to contract signature. However, it may be of more interest to bidders challenging decisions, clarifying that further proceedings will need to be started, or amendments made to an existing claim, in order to preclude a defendant Contracting Authority from entering into the contract with another bidder pursuant to a revised decision. The existing claim will not provide the protection of a suspension on contract making in respect of the revised decision.