Local Government Lawyer Home Page


Sharpe Edge Webpage Banner

Welcome to Sharpe Edge, Sharpe Pritchard’s local government legal hub on Local Government Lawyer.

Sharpe Edge features news, views and analysis from our team of specialist local government lawyers working at the heart of the latest legal developments. Sharpe Edge platform is also the only place where local government lawyers can get e-access to two law books by our Head of Local Government Rob Hann: The Guide to Local Authority Charging and Trading Powers (‘LACAT’) and The Guide to Local Authority Companies and Partnerships (‘LACAP’).

 

                                                                                                  

Slide background

Automatic suspension and withdrawal of the decision to award

Icons CourtColin Ricciardello examines a recent case where an authority sought to end an automatic contract making suspension by withdrawal of the decision to award the contract.

The coming together of these two elements in the procurement of public contracts under The Public Contracts Regulations 2015 (“PCR” ) was recently considered in Aquila Heywood Ltd v. Local Pensions Partnership Administration Ltd [2021] EWHC 114 (TCC). This decision is likely to remain relevant after the PCR rides into the sunset as the recently published Green Paper proposes to keep the automatic suspension [1].

This judgment provides definitive authority that where an award decision is challenged by proceedings (and the PCR Regulation 95 (1) automatic suspension applies), and that decision is then withdrawn, the automatic suspension also comes to an end.

Background

The Defendant, The Local Pensions Partnership Administration Ltd (“LPPA”), administers local authority pensions schemes and it undertook an IT call off procurement under a framework agreement. The Claimant (“Aquila”) submitted a tender and at the conclusion of the procurement in September 2020 LPPA informed Aquila that: it had been unsuccessful ; the successful tenderer was Civica – “the first award decision”.

Because the contract was awarded under a framework LPPA was exempt from sending a Regulation 86 award decision notice (PCR Regulation 86(5) (c)). That exempts the requirement to give a standstill statement under PCR Regulation 86(2) (d) and observing the standstill requirements under PCR Regulation 87. However, LPPA volunteered to observe the standstill period.

Aquila was dissatisfied with the first award decision and on 2 October 2020 issued proceedings whilst the standstill period was running. LPPA made a concession on 14 October 2020 that mistakes had been made in the evaluation and that proper records of the evaluation process had not been made by LPPA. It accordingly decided to withdraw the first award decision and rewind the procurement by re- evaluating the tenders. LPPA served and filed its defence on 6 November 2020 and pleaded that the first award decision had been withdrawn, was ineffectual and made the whole claim academic. [2]

The evaluation undertaken in the rewound procurement led to LPPA again awarding the contract to Civica. Notice of that of decision (“the second award decision”) was given on 8 December 2020 in which LPPA again agreed to observe a ten-day standstill period.

LPPA believed that the automatic contract making suspension (arising out of the proceedings commenced in respect of the first award decision) was still in force and sought Aquila’s agreement to end the suspension on 10 December 2020. Aquila’s Calderbank reply was to offer to discontinue its claim if LPPA paid its costs – on a discontinuance of the claim the suspension would have fallen away under Regulation 95(2)(b). The response did not address the ending of the suspension request, there was no agreement and so LPPA issued an application under PCR 96(1) (a) to end the Regulation 95(1) automatic contract making suspension. Aquila did not oppose LPPA’s application to end the suspension so the argument before the Judge was about costs and that in turn depended on: LPPA’s argument that its application was successful; and Aquila’s arguments that: the application to end the suspension was misconceived as the contract making suspension arising out of the claim in respect of the first award decision did not apply to the second award decision; there was no suspension in framework awards because of the exemption in Regulation 86 (1).

The Judgment

The automatic contract making suspension provision at PCR Regulation 95(1) is triggered when: (a) a claim form has been issued “…in respect of a contracting authority’s decision to award a contract”; (b) the contracting authority becomes aware that a claim form has been issued; (c) the contract has not been entered into.

The requirement to refrain from entering into the contract continues until any of the circumstances in PCR Regulation 95(2) occur, namely (a) the Court brings it to an end on an application to do so under 95(1) (a); (b) the claim is determined at first instance, discontinued or otherwise disposed and no order to extend the requirement to refrain has been made.

The Judge decided he must construe PCR Regulation  95 by reference to its underlying purpose and interpreting its actual words in a way which best gives effect that purpose [paragraph 15]. He held that the purpose of the suspension was to prevent the contracting authority from implementing the challenged decision by entering into a contract before any of the Regulation 95(2) circumstances have occurred – namely an application to end the suspension is heard or the claim is determined. As to the meaning of the wording the Judge said: “… the natural reading of Regulation 95(1)…is that it prevents the contracting authority from entering into the contract pursuant to the challenged decision”. [paragraph 22].

Accordingly, with this purpose and construction the Judge concluded that the suspension only prevented LPPA from entering into a contract with Civica based on the first award decision – “Once that decision had been withdrawn and the bids re-evaluated, its served no further purpose. Where, as here, no challenge was pleaded to the second decision to award the contract either by way of fresh claim form or amendment to the initial proceedings, the contracting authority was not required to refrain from entering into a contract pursuant to the second decision. This was therefore an unnecessary application pursuant to regulation 96(1) (a). [Paragraph 25].

He swiftly dismissed the proposition that PCR Regulation 95 suspension was not engaged where the PCR framework exemption in PCR Regulation 86(5) (c) applied because: there was nothing in Regulation 95(1) which excluded it from the categories exempted in Regulation 86(1); the automatic suspension arises where the three conditions in PCR Regulation 95(1) were met; a contracting authority could elect to give a notice under Regulation 86(1); there was no reason in principle or policy why Regulation 95(1) should be construed as importing an additional requirement before it could apply to the exempt cases [paragraph 19].

Having decided that the PCR Regulation 96(1)(a) application was unnecessary, Aquila was held to be the successful party in the application to end the suspension. However, when it could, Aquila failed to agree to end the suspension and confirm that LPPA was free to enter into a contract with Civica. It withheld its agreement in order to secure a settlement on its costs liability on a discontinuance of the claim. It was also inconsistent over whether the suspension applied. That conduct was taken into account when the Judge only awarded Aquila half of its costs against LPPA.

Discussion

This judgment helpfully illuminates the scope of the Regulation 95(1) contract making suspension and the application of the standstill requirements where an exemption in Regulation 86(5) applies. It also provides useful guidance as to how to handle the automatic contract making suspension in cases where a decision is challenged by the commencement of proceedings and that decision is withdrawn. In these circumstances it would be prudent to try and agree in correspondence that the suspension is no longer in force – especially when the suspension does not end in cases where the claim is not discontinued because of the continuance of an accrued claim for damages (see Amey at footnote 2).

Colin Ricciardiello is a Partner at Sharpe Pritchard.

[1] However, Chapter 7 of Green Paper “Transforming Procurement” published on 15 December 2020 proposes to amend the test for ending an automatic suspension so it is no longer based on the American Cyanamid test for the grant of an injunction.

[2] Amey Highways Ltd v. West Sussex County Council [2019] EWHC 1291 however decided that a withdrawal of an award decision might not in itself defeat a claim for damages which accrued before the withdrawal of the decision challenged in the claim.

For further insight and resources on local government legal issues from Sharpe Pritchard, please visit the SharpeEdge page by clicking on the banner below.

sharpe edge 600x100

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email This email address is being protected from spambots. You need JavaScript enabled to view it.

LACAT BookFREE download!

A Guide to Local Authority Charging and Trading Powers

Written and edited by Sharpe Pritchard’s Head of Local Government, Rob Hann,

A Guide to Local Authority Charging and Trading Powers covers:

• Updated charging powers compendium          • Commercial trading options

• Teckal ‘public to public’                                    • Localism Act

FREE DOWNLOAD

LACAT BookAvailable to buy:

A Guide to Local Authority Companies and Partnerships

An invaluable, comprehensive toolkit for lawyers, law firms and others advising
on or participating in Local Authority Companies and Partnerships”

- Local Authority Chief Executive

BUY NOW

  More Articles

Icons Court

Climate emergency or climate catastrophe?

Rob Hann asks how central & local government departments and councils can work together more effectively to combat the challenges to achieve net zero by 2050.
Icons Court

Big Problems Need Radical Solutions – Time to Play Monopoly with District Heating?

Steve Gummer examines how local authorities might make district heat networks a reality.
<a href=

The Judicial Review and Courts Bill

The Judicial Review and Courts Bill was introduced to the House last week on 21 July 2021. William Rose and Anna Sidebottom discuss the potential impact of the bill.
<a href=

Liquidated damages and termination

Clare Mendelle, Francesca Gallagher and James Goldthorpe provide an outline of the Supreme Court's recent decision in Triple Point Technology vs PTT Public Company Limited.

Mandatory Vaccination for Care Home Workers in England

The Government has announced that people working in care homes in England must be fully vaccinated against Covid-19 from October 2021, unless they have a medical exemption, write Rachel Murray-Smith and Francesca Gallagher.
Icons Court

Transparency in Procurement: Procurement Policy Note (“PPN”) 07/21

Julie Lau, Clare Mendelle and Beth Edwards outline the new regime for publishing procurement notices post-Brexit
Icons Court

When procurement law and contracts for interests in land meet

Colin Ricciardiello provides a case law update examining cases that have examined the overlap between a requirement to procure and a contract for the disposal of an interest in land.
tb w74 h74 crop int a734a5aec8e0dcb7849ee8ebeb84a53d

UK granted data protection adequacy decision

Charlotte Smith summarises the new data protection adequacy decision.

First Impressions on the New Subsidy Control Bill

Last week the Government published its new Subsidy Control Bill. The Bill represents a significant shift in the way in which subsidies are assessed and also provides some clarity about the regime that will replace the EU State aid regime, writes Peter Collins.
Icons Court

Managing new enforcement powers for councils under the Traffic management Act 2004

Rob Hann considers the recent legislative changes to traffic management in England, including the introduction of Clean Air Zones and widening local authorities enforcement powers for moving traffic offences.
Icons Court

Implementing Net Zero: Taking account of Carbon Reduction Plans in the Procurement of Major Government Contracts

The Government recently published the Procurement Policy Note 06/21. This will require suppliers bidding for major government contracts to provide a Carbon Reduction Plan at the selection stage and commit to achieving Net Zero by 2050, writes Clare Mendelle and James Goldthorpe.
tb w74 h74 crop int a734a5aec8e0dcb7849ee8ebeb84a53d

Public Procurement Update June 2021

On 3 June 2021, the Government issued the National Procurement Policy Statement (NPPS), and the associated Procurement Policy Note (PPN). George Dale explains what each document does.

What a bind: Section 106 planning obligations where there are multiple land interests

Rachel Lee and Christos Paphiti consider whether the case of R (on the application of McLaren) v Woking Borough Council impacts upon local planning authorities (LPAs) ability to properly consider the land interests and parties as regards to performance of specific obligations.
Icons Court

The use of experts only works when everyone plays by the same rules

Colin Ricciardiello looks at the use of expert witnesses in the wake of an important recent decision.
Icons Court

Unlawful Award of Contract

The High Court has ruled that the Minister for the Cabinet Office, Michael Gove, broke the law by giving a contract to a market research company, Public First, who are run by long-time associates of his. Anna Sidebottom, Francesca Gallagher and Clare Mendelle report.
Icons Date

Time after time: extending time for determination of a prior approval application

Rachel Lee and Christos Paphiti examine the time period for determination of Prior Approval (‘PA’) applications and explore how a local authority can extend the time period for determination.
Icons Date

The Cram Slam – Part 26A Restructuring Plans and Commercial Leases

David Nelson looks at the impact on landlords of a controversial High Court decision to allow a restructuring plan for a chain of health clubs.
Icons Court

The limits of an adjudicator's jurisdiction

Dr Paul Hughes and Anna Sidebottom look at the effect of Prater v Sisk [2021] on the ability of an Adjudicator to rely on previous 'out of jurisdiction' decisions between the same parties
Icons House

The Queen’s Speech and Judicial Review

Colin Ricciardiello looks at the likely effects of the government's proposed changes to the judicial review process.
Icons House

The Subsidy Control Bill

Ryan Copeland and James Hughes analyse the main provisions of the Subsidy Control Bill announced in the recent Queen’s speech.
Icons Court

Councils unable to hold meetings remotely from 7th May

Radhika Devesher considers the fallout from the High Court's decision that online council meetings cannot continue past 7th May and outlines the practical steps that councils can take to ensure that the decision-making process is not adversely affected.
Icons Court

You can’t claim that! Court finds exclusion clauses work just like any other clause

The recent case of Mott MacDonald Limited v Trant Engineering Limited serves as a timely reminder that exclusion clauses in construction contracts can and do work and will be enforced by the courts to prevent what may otherwise be valid claims write Clare Mendelle and James Goldthorpe.
Icons Date

Sparks Flying: Increasing Network Connectivity For Tenants

Lillee Reid-Hunt, James Nelson and Natasha Barlow look at the potential impact of The Telecommunications Infrastructure (Leasehold Property) Act 2021 on reducing delays in the installation of telecommunications equipment to leasehold properties.
Icons House

Subcontract held to govern works commenced before execution

Clare Mendelle and James Goldthorpe examine a case which considered which terms governed liability for works carried out prior to the execution of a contract.
Icons Court

No overlap between substance and jurisdictional issues

Clare Mendelle and James Goldthorpe examine the implications of Ex Novo Limited v MPS Housing Limited [2020] EWHC 3804 (TCC)]
Icons Court

Home is where the heart is

Bernadette Hillman and Christos Paphiti outline the new permitted development right and what it means for the property sector and planners
Icons Date

Can a worker get paid for sleeping?

Some jobs such as care workers, security guards and nightwatchmen require the individual to work night shifts where they may, with the approval of their employer, sleep during some or all of the shift, but nevertheless remain on standby during that time.
Icons Date

Can you decline to sponsor skilled workers under the new immigration rules?

Is there an obligation to consider resident workforce prior to employing migrants? Julie Bann and Aleksandra Wolek report.
Icons House

The Long Goodbye to the PFI

Rob Hann, Sharpe Pritchard’s Head of Local Government takes a look at the House of Common’s Public Account Committees’ recent report into the pending expiry of PFI contracts which contains some interesting recommendations….
Icons Court

Changes to the Electronic Communications Code

The Department for Digital, Culture, Media and Sport has commenced a consultation on changes to the Electronic Communications Code 2017 (the “Code”). James Nelson, Lillee Reid-Hunt and Natasha Barlow report.
Icons Court

The Heat Networks (Scotland) Bill

Until last week the heat network sector in Scotland was not specifically regulated. The recent Heat Networks (Scotland) Bill seeks to rectify this by creating a regulatory framework and licencing system designed to encourage the increased use of heat networks.
Icons Date

A step in the right direction

Rob Hann and Juli Lau outline Sharpe Pritchard’s response to the Government’s Green Paper on reforming the ‘outdated’ public procurement regime.
Rob Hann

Life on the Edge!

This week sees the launch of Sharpe Edge – the home of Sharpe Pritchard on Local Government Lawyer. We have created Sharpe Edge for local authorities who are looking for ways to help their communities rebuild and regenerate following the devasting impact of the Covid-19 Pandemic.
Icons Court

Teckal and Beyond….

In this article Rob Hann, Sharpe Pritchard’s Head of Local Government, takes a look at what isn’t covered in the recent Green Paper on Transforming the UK’s Public Procurement rules, namely the exception contained in regulation 12 of the Public Contracts Regulations 2015 (PCR 2015), commonly referred to as the Teckal exemption and asks whether Teckal is ‘fit for purpose’ in a post Brexit, post pandemic environment?
Icons Court

Jurisdiction Clauses & Enforcing Adjudication Decisions

The case of Motacus Constructions Ltd v Paolo Castelli Spa [2021] EWHC 356 (TCC) confirms adjudication’s status as an interim-binding measure and reinforces its importance as a dispute resolution forum in the construction industry.
Icons Date

Procurement in an Emergency – Requirements for Transparency

Public procurement has never had such a high profile as it has in recent months and most especially since the decision in Good Law Project and Others v Secretary of State for Health and Social Care ([2021] EWHC 346 (Admin)). However, in practice, has anything changed?
Slide background