Leisure services provider and council settle dispute over £120m procurement

A dispute between a leisure services provider and a local authority over a £120m procurement has been settled following pre-trial mediation.

The claimant, Wealden Leisure Limited, had challenged under Art. 56 TFEU and s.2 of the European Communities Act 1972 Mid Sussex District Council’s award of a concession contract.

Wealden had been the incumbent provider but lost out to Places for People Leisure. The claimant launched proceedings after learning that the council’s preferred bid was in the region of 20% cheaper than its own proposal.

The claimant, which came third, suggested that the preferred bid was “abnormally low, unsustainable and non-compliant”.

Mid Sussex refused a request for early specific disclosure of the final tenders it received, but in July 2014 a Deputy High Court judge, Andrew Hochauser QC, ordered it to do so.

The council also agreed – following a suggestion made by the judge – to disclose the evaluation documents evidencing what, if any, investigation it had conducted regarding the sustainability of the preferred bid.

Following last year's ruling, Mid Sussex maintained that it had conducted the procurement exercise properly and fairly in accordance with its obligations.

The winning bid was sustainable and viable, and People for Places Leisure would provide the best and most effective service, it added. The winner has been operating the services since 1 July 2014.

The terms of the settlement reached after the mediation are confidential.

Joseph Barrett of 11KBW, Wealden’s barrister, suggested that the litigation was notable in that it illustrated that procurements of concession contracts (which fall outside the Public Contracts Regulations 2006) can be effectively challenged in High Court claims for breach of statutory duty under the 1972 Act, as opposed to proceeding by way of judicial review.

Barrett also said the litigation confirmed the importance of obtaining early specific disclosure in EU procurement challenges, and showed that unsuccessful bidders can enforce their rights under EU law "even in, arguably, unpromising circumstances" (Wealden coming third).