In a decision (view the decision here) published last week following a Petition for Judicial Review by Sidey ltd, some further light has been shed on the obligations of contracting authorities and the rights of bidders in below threshold procurements.
Readers may be familiar with the background to the above Judicial Review proceedings. In short, Sidey submitted the most economically advantageous bid in a "below threshold" (value £2.5m) works procurement exercise.
Two particularly significant errors were made in the procurement process. Firstly, the scores of bidders were incorrectly transposed, resulting in the 3rd placed bidder being put into first place. Secondly, the Council's "standstill" fax was sent to the wrong number, so that Sidey was unable to review the proposed award prior to the Council entering into a contract with the other (3rd placed) bidder.
In a decision (view the decision here) of the court dated 9 December 2009, the judge initially found in favour of Sidey, including that Sidey were entitled to remedies under the Public Contracts (Scotland) Regulations 2006 and underpinning European Directives. However, on appeal (view the appeal here) to the Inner House of the Court of Session, this was overturned. The Inner House ruled that the remedies under the Regulations and Directives were only available for above threshold contracts and that remedies for below threshold contracts ought to be obtained by other means, including by way of judicial review.
Now we have the outcome of a subsequent judicial review in which, to offer a broad summary, the court found that the Council acted irrationally and in error of law.
This is a leading reported case involving judicial review in Scotland of a public procurement process. It considers the rights and obligations of contracting authorities and bidders in a below threshold process which the court deemed not to be of cross border interest.
On the cross-border front the judge did not find in favour of arguments that there was potential cross border interest, including through taking into account that the case concerned: "…a contract for, in commercial terms, a relatively modest, contract price. It involved work of a fairly labour intensive nature in a relatively large number of local authority houses where it would be necessary to have local staff on the ground." Interestingly, the judge also founded on the relevant procurement employees: "not in fact consider[ing] the question of cross-border interest".
The court also considered, but did not find in favour of, arguments that the Council was in breach of (i) implied contract, and (ii) a duty of reasonable care.
From a legal perspective, it can be said that the Court of Session's string of Sidey cases confirms rights and obligations falling into three principal tiers:
- Above threshold: the Regulations/Directives apply to procurement processes, remedies are in terms of the Regulations/Directives and obtainable by way of sheriff court, commercial or ordinary action;
- Below threshold with cross-border interest: general principles of European and public law apply to processes but remedies are not in terms of the Regulations/Directives. Judicial Review is, therefore, one form of action open to bidders;
- Below threshold with no cross-border interest: public law can apply to processes and Judicial Review is, therefore, one form of action open to bidders.