Lowry Brothers v NIW (2): The right time for damages undertakings in Procurement challenges?

A preliminary ruling in the Lowry case we posted on earlier dealt with the hitherto unanswered question concerning the appropriate point in time for an Authority to seek undertakings in damages from a challenger who has secured an automatic suspension on contract award.

In this case, the Authority sought such an undertaking very soon after the proceedings had been issued at a hearing where other issues were being dealt with and at which the date for the substantive hearing of the application to lift the suspension had been fixed.

The court declined to make the order requested. The rationale was that the statutory requirement allowed for the issue of such undertakings to be considered “when” the issue of the lifting of the automatic suspension was being decided. That point in time was not reached until the substantive hearing and so, in the meantime, the challenger was free to proceed without having to consider and commit to such an undertaking.

From a cynical perspective, it is not beyond contracting authorities to seek to use the threat of undertakings in damages to dissuade a challenger from proceeding. At least now, a challenger will not have to address that issue unless and until the court is actively considering granting a continuance of the suspension.

http://tinyurl.com/c86l6ao

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