Court rules procurement challenge to biggest-ever waste PFI contract 'out of time'
The High Court has rejected an unsuccessful bidder's claim against the letting of the UK's largest-ever waste PFI contract awarded by the Greater Manchester Waste Disposal Authority (GMWDA), ruling that its challenge was brought too late to be considered.
SITA UK challenged the award of the PFI contract to a rival bidder, claiming a breach of procurement rules and alleging significant changes were made to the contract after the award which, it said, should have entitled it to submit a revised bid. SITA UK also said that its initial bid was 15% below that of its competitor.
However, the judge, Mr Justice Mann, ruled that SITA’s challenge was out of time, and that there was “no good reason to exercise any discretion to extend it. The appropriate course is therefore to strike out these proceedings.”
The decision follows the case between Uniplex and the NHS Business Services Authority at the European Court of Justice in January this year, which confirmed that suppliers have three months from the date they learn of an infringement to bring a challenge under EU procurement rules.
On this basis, GMWDA argued that SITA should have known of any alleged infringements by 8 April 2009 and should have therefore commenced any proceedings against the authority by 7 July 2009. Despite lengthy correspondence between the two organisations, SITA did not issue proceedings against GMWDA until 27 August 2009. Mr Justice Mann said that SITA UK had been able to threaten proceedings and was aware of the time limitations in bringing a challenge.
The clerk of the GMWDA, Charlie Parker, said: “We had a duty to robustly defend any proceedings in order to protect the public purse and recover the costs incurred.”
SITA has been given leave to appeal. It said it believed the GMWDA had not procured the "most economically advantageous tender", as it indicated it would at the start of the procurement.
The project attracted a number of tenders, which were eventually reduced to two, before GMWDA selected Viridor Laing ahead of SITA UK. However, the final contracts between GMWDA and Viridor Laing were delayed due to changes in the specification. SITA UK argued that it should have been allowed, under statutory procedures, to return to the tender process. It also argued that GMWDA's decision to select the most economic tender was flawed as Viridor, unlike Sita, was offered an opportunity to amend its bid.
GMWDA is the largest of six English waste disposal authorities that were created under the Local Government Act 1985. GMWDA provides waste disposal services for 973,000 households in Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside and Trafford. It handles around 5% of National Municipal waste.
GMWDA signed the 25 year Recycling and Waste Management Contract (RWMC) with Viridor Laing (Greater Manchester) (VLGM) Limited on the 8th April 2009. The Contract is a £631 million construction programme, creating a network of state-of-the-art recycling facilities over the next 5 years. The Contract is worth £3.8 billion to VLGM over its term. The contract is the most complex Waste Management Contract of its kind in Western Europe and involves major capital investment.
