Scottish court hears blockbuster procurement case over IT contract

The Court of Session in Edinburgh is this week holding a hearing in a dispute between BT and the NHS after the company missed out on a £110m contract to create an IT platform for public bodies in Scotland.

BT served a summons against NHS National Services Scotland (NSS) on 6 December in a bid to have the procurement exercise for the Scottish Wide Area Network (SWAN) re-run. In the event that this does not happen, it is reportedly calling for the payment of £20m in damages.

In response NSS began legal proceedings to lift the action. If successful, it will be able to proceed with the award of the contract.

The SWAN programme would deliver a single public services network available for the use of any, and potentially all, public service organisations within Scotland. The OJEU notice was published in October 2012.

The initial phase of the programme is intended to deliver services to four ‘Vanguard Partners’: NHS Scotland; Education Scotland; Pathfinder North (a consortium comprising the Highland Council, Argyle and Bute Council, Orkney Island Council, Moray Council and Comhairle nan Eilean Siar); and Pathfinder South (a consortium comprising Dumfries and Galloway Council and The Borders Council).

BT has run the N3 national communications network across the NHS in Scotland for several years.

In a statement on the SWAN procurement and the potential award to a rival bidder, the company said: "We are naturally disappointed by this decision, particularly since the existing N3 national communications network....has delivered significant benefits over many years.

"We believe our proposal offered excellent value and minimal risk to Scottish tax payers. We can confirm that proceedings have commenced with a view to the procurement being re-run and hope that this matter will be resolved shortly. This is a highly unusual step but we believe we have strong grounds for this challenge."

BT said it considered that the tender process was flawed and "did not  make sure the contract was awarded on the basis of the most economically advantageous bid, in accordance with the relevant Regulations".

The company insisted that it was taking the legal action reluctantly, as it shared the NSS's concern on value to the public purse.

A spokesman for NSS said the SWAN platform would deliver savings – through common standards and improved integration between public bodies – and these savings could be reinvested in essential public services.

He added: “NSS is the procuring agent on behalf of a consortium of public sector bodies and has managed a fair, robust and thorough procurement process resulting in the selection of a preferred bidder.

“Until this legal action is lifted or resolved, NSS cannot award the contract to the preferred bidder. NSS has commenced the legal proceedings required to lift the current action.”