Council fails in bid to have automatic suspension of contract award lifted

A North East council has failed to persuade a High Court judge to lift the automatic suspension of a contract award under procurement rules.

The case of Counted4 Community Interest Company v Sunderland City Council [2015] EWHC 3898 (TCC) concerned a procurement exercise for the provision of substance misuse treatment and harm reduction services for substance users in Sunderland.

The claimant is a not-for-profit community interest company (CIC) which provides substance misuse services to facilitate the recovery of those suffering from substance misuse in and around Sunderland.

The CIC was established for the sole purpose of providing these services to the city council, something which it had been doing since 2008.

It was the incumbent provider to the council of the clinical aspect of the substance misuse services, working alongside Turning Point and Lifeline, pursuant to the current contract between the parties dated 1 August 2013.

Counted4 CIC participated, but was unsuccessful, in the procurement process carried out by the council in 2015. The successful party was Northumberland Tyne and Wear NHS Foundation Trust, which was the immediate previous provider to Sunderland before August 2008.

The CIC challenged the award. Its case was that the procurement was conducted unlawfully in breach of the Public Contracts Regulations 2015 and/or general principles of European law and/or in breach of an implied tender contract.

The claimant alleges that the council breached those obligations:



(a) in particular, by breaching regulation 24.1 of the regulations and failing to take any measures to effectively prevent, identify and remedy the conflict of interest of a member of its evaluation panel. The individual was Sunderland's employee with responsibility for managing the existing contract at all times and whose competency in that role had repeatedly been challenged by the claimant and, as a result of those challenges and complaints, investigated internally by the council;

(b) by failing in its scoring to follow the published award criteria and/or applying undisclosed criteria or methodologies and/or acting in a discriminatory manner and/or committing manifest errors in respect of the method statement questions. In particular, Counted4 CIC alleges that: 


(i) the bid was marked inconsistently against the method statement questions; 







(ii) the bid was marked inconsistently against the references to the specification; 







(iii) the council misunderstood or misinterpreted the bid; and 







(iv) the council ignored aspects of the bid. 








The claimant seeks, amongst other things, declarations that Sunderland acted unlawfully and an order that the new contract should be awarded to it and/or damages.



Sunderland City Council subsequently applied to the court for an order lifting the automatic suspension imposed pursuant to regulation 95 of the Public Contracts Regulations 2015.

The local authority sought to argue, by reference to the principles laid down in American Cyanamid v Ethicon Limited [1975] AC 396, that the claim raised no serious issue and, alternatively, was very weak.

The council went on to suggest that damages would be an adequate remedy for the claimant and would not be an adequate remedy for the authority. Sunderland added that its evidence showed that there was an urgent need to lift the suspension in order to protect the interests of vulnerable service users in the city.

Counted4 CIC submitted that on any view there was a serious issue to be tried and that the balance of convenience lay squarely in favour of maintaining the suspension until an expedited trial in 2016.

The parties were agreed that an expedited trial could (and should) take place then and there appeared to be agreement that such a trial could take place in the spring of 2016.

In a recently published judgment, Mrs Justice Carr declined to lift the automatic suspension.

She said that weighing all the factors together, “particularly the prejudice to the claimant were the suspension to be lifted, the availability of an expedited trial date and the fact that the public interest is not unprotected at present”, the balance of convenience lay in favour of maintaining the suspension.

She added that not lifting the suspension was the course that seemed likely to cause the least irremediable prejudice to one party or the other.