Lowry Brothers v NIW (1): pursuing procurement challenges just got harder

This Northern Ireland case will add to the feeling that, even following the 2009 amendments to the Public Contracts Regulations 2006, the odds are stacked in favour of contracting authorities when it comes to challenging procurement decisions.

McCloskey J clearly and unambiguously spelt out the three key steps the court should take in deciding whether or not to lift the automatic suspension on contract award which follows upon the issue and service of proceedings by a challenger:

1. Does the challenger have an arguable case? Even if the answer to that question is “yes”, the complaint must have a real effect: “Defects belonging to a vacuum are not actionable”.

2. Would damages be an adequate remedy? The Judge paid short shrift to arguments that in many such circumstances it could prove almost impossible to quantify loss. He observed drily (paraphrasing only a little) that he had yet to come across a loss which could not be quantified by an expert. Additionally he found that simply because two experts may reach differing conclusions based on differing methodologies it did not follow that damages could not be an adequate remedy.

3. Having reached a view on 1 and 2 above, the crucial question was “in whose favour does the balance of convenience lie?” The Judge made it quite clear that the normal situation would be that it favoured the contracting authority because the paramount consideration would be the impact of the continued suspension on public services. In this case, he observed that even if the challenger had an arguable case, he would have found the balance of convenience in the Authority’s favour.

Gateley was successful in sustaining an automatic suspension in favour of our client ALHCO Group Limited last year but that decision is in the minority – as an incumbent bidder we were able to show (1) arguable case; (2) a forced TUPE transfer could destroy the business, and so damages would not be an adequate remedy; and (3) that our client was prepared to continue the service, pro tem, on the same terms as those offered by the “successful” bidder and thus the balance of convenience was decided in our client’s favour.

It is looking ever more likely that the best an aggrieved bidder can hope for from a challenge is the recovery of damages in the absence of overwhelming arguments on the adequacy and balance of convenience points.


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