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Public Procurement Law: what can we learn from the challenges brought against the UK Government's award of Covid-19 contracts?

24 January 2022

This article looks at the key lessons that can be taken from two high profile challenges brought by the Good Law Project ("GLP") against the UK Secretary of State for Health and Social Care in respect of the award of PPE and communications contracts during the height of the Covid-19 pandemic.

While GLP cases receive lots of media coverage due to their political nature and link to the current scrutiny of Government actions during the pandemic, the first point to make clear is that these cases consider technical procurement points related to decisions made in March and June 2020 when the pandemic was very much in its emergency stage. In particular, the cases concern the technicalities when using the negotiated procedure without prior publication where, for reasons of extreme urgency brought about by unforeseeable events, the time limits for other procedures cannot be complied with (Regulation 32(2)(c) Public Contracts Regulations 2015 ("PCR 2015")). 

Ultimately, the cases are about when is it reasonable to circumvent usual procurement methods and buy direct.  This is ultimately a procurement law point, but having decided that the justification for buying outside the procurement rules is satisfied, how that is then carried through brings with it separate points of public law in terms of sound decision making.

Use of a "High Priority Lane" ("HPL)

The first case concerns the Department for Health & Social Care's use of a HPL for award of PPE contracts to suppliers who had been referred by MPs or senior officials.

While media coverage has focused on awards of contracts to Government associates and allegations of cronyism, it is notable that at this time of a worldwide PPE shortage, the Government also had an open portal through which any PPE supplier could submit an offer. The court observed that the HPL may have allowed these referred suppliers' offers to be considered quicker than those submitted on the portal (and consequently breached the requirement at Regulation 18 PCR 2015 to treat all potential suppliers equally and transparently).  However, the Court also noted that since the grounds for using the negotiated procedure without prior publication applied (ie. there was a clear emergency and an emergency shortage of PPE), then there were no "obviously disappointed bidders" and the offers would have been accepted regardless of whether they came through the HPL or the open portal, such was the urgency to procure PPE in March 2020.  The Court effectively confirmed that the case for direct award had been met, and since the ultimate outcome appeared to be the same either way, there was no case to answer.

The lesson for contracting authorities is that they should not establish potentially discriminatory methods to engage certain suppliers in situations where the grounds for negotiating a contract without competition apply in any event. The Government would have been able to award these contracts legally to the particular suppliers concerned without the need for the HPL, and using the HPL created an unnecessary risk.

Consider other suppliers?

The second case, heard by the Court of Appeal, concerned the direct award of a £560,000 communications support contract to Public First, an organisation with close links to then chief adviser to the Prime Minster, Dominic Cummings. GLP's challenge was that the award in June 2020 was unlawful as no other agencies were considered and the award gave rise to apparent bias due to the organisation's close links to Mr. Cummings.

The High Court had found that while grounds for use of the negotiated procedure without prior publication also applied to this contract, allowing a direct award to be made without competition, the Secretary of State should have considered other available suppliers before making its award.  The Court of Appeal then overturned this decision and held that since the grounds for using the negotiated procedure without prior publication applied, consideration of other suppliers was not required.

GLP has stated that it intends to ask the Supreme Court to hear an appeal on the basis that there was apparent bias and that the contract was not "strictly necessary" as required by Regulation 32(2)(c) PCR 2015.

Whilst the current position may be that public bodies are not specifically required to consider other suppliers where grounds for use of the negotiated procedure without prior publication apply, they would be wise to document their consideration of other organisations as part of their decision-making process, if ever relying on this ground to make a direct award. This is on the basis that even when a technical requirement under procurement law may not apply, the overarching duty under UK public law for public authorities to act reasonably will still be present.

DWF's award-winning public sector team is on-hand to advise on any aspect of public procurement law (from conduct of processes to bringing and defending challenges) so please get in touch to find out how we can help you.

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