Lancashire Care NHS Foundation Trust & Anor v Lancashire County Council, Court of Appeal - Technology and Construction Court, February 08, 2018, [2018] EWHC 200 (TCC)

Resolution Date:February 08, 2018
Issuing Organization:Technology and Construction Court
Actores:Lancashire Care NHS Foundation Trust & Anor v Lancashire County Council
 
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Case No: HT-2017-00386

Neutral Citation Number: [2018] EWHC 200 (TCC)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

TECHNOLOGY AND CONSTRUCTION COURT (QBD)

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 08/02/2018

Before :

THE HONOURABLE MR JUSTICE FRASER

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Between :

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Rob Williams (instructed by Hempsons) for the Claimant

Sam Karim QC (instructed by Lancashire County Council) for the Defendant

Hearing dates: 25 January 2018

Draft distributed to parties: 31 January 2018

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Judgment

Mr Justice Fraser :

Introduction

1. This is an application to lift an automatic suspension on the award of a contract imposed by virtue of the claimants issuing a claim form, within the necessary time period, challenging the results of a procurement exercise for that contract in which they were unsuccessful. Due to the urgent nature and public importance of the subject matter of this application, I heard the application on the morning of 25 January 2018 and gave the parties the answer orally in the afternoon of that day. I gave only brief reasons for my refusal to lift the automatic suspension that was then (and as a result of my ruling on the application, currently still is) in place. I indicated that I would give detailed written reasons as soon as possible thereafter; this judgment on the application contains those reasons. There is one point in particular that has not, so far as I am aware, been considered before judicially and that is the point at [19] below.

2. The procurement the subject matter of these proceedings concerns Public Health and Nursing Services to be provided to children and young persons from birth up to the age of 19, including services that concern children and adolescent mental health, across the county of Lancashire. It therefore involves a sizeable population and includes some of the most vulnerable members of society. The procurement exercise and the contract are both subject to the Public Contract Regulations 2015 (``the Regulations'').

3. The two claimant trusts (``the Trusts'') are the incumbent providers of these services to the Lancashire County Council (``the Council'') and there can be no question of there being any interruption in the provision of these services. Apart from any other considerations, the Council is statutorily obliged to provide such services to the residents of Lancashire under the Health and Social Care Act 2012, and will and must continue to do so. These services are being provided now by the Trusts and the contracts under which they do so expire on 31 March 2018. Were it not for the automatic suspension to which I have referred, from 1 April 2018 onwards (for a five year term) these services would be provided by the winning bidder in the procurement exercise the subject of these proceedings, namely Virgin Care Services Ltd (``Virgin''). Only the Trusts, and Virgin, bid for the supply for the Services in the procurement exercise. I shall use Services to denote those to be provided under the new contract, as distinct from the services currently provided by the Trusts.

4. The programme that is the subject of the procurement is called the 0-19 Healthy Child Programme in Lancashire. The procurement exercise under challenge relates particularly to Lot 1 of that programme which is for Public Health Nursing Services. Lot 1 is worth approximately £104m over five years, and represents in excess of 95% of the estimated value of the programme as a whole (that higher total value being just under £108m). For children aged 0-5, the Service consists of screening and developmental reviews, promotion of antenatal health, new baby reviews, maternal mental health and breastfeeding and healthy weight assessments. For children aged 5-19 (and the upper age limit can be a little higher than this, for reasons that are not germane to this application) the services are different and are concentrated upon maintaining the staged health review, promotion of healthy lifestyles, and support of complex and additional health and wellbeing needs of this age group. The Council, after seeking costs reductions and also considering whether to extend the existing arrangements with the Trusts, decided in the autumn of 2017 to put the service out to tender for a new contract to commence on 1 April 2018. The tender process was subject to what is known as the ``Light Touch'' Regime under Regulations 74 to 76 of the Public Contracts Regulations 2015. Under this regime, the Council was required to comply with those specific regulations and the general principles of procurement law.

5. The competition took place over a shortened period between 29 September 2017 and 27 November 2017 and the decision was announced on that latter date. The Invitation to Tender (``ITT'') was published on 29 September 2017. Notification of the outcome of the procurement was given by the Council by way of letter dated 27 November 2017. The Trusts lost the tender for Lot 1 to Virgin by a score of 78.5% to 74.43% - a margin of 4.07%. The competing bidders' prices were almost identical, accounting for a difference of just 0.07% in their overall scores based on that factor. The remaining margin of 4% on the quality evaluation of the two bids in fact represents just 2 actual marks in that evaluation of the two bids, before the relevant weightings were applied.

6. Upon the issuing of these proceedings by the Trusts, what is called the automatic suspension under Regulation 95 came into effect which prevented the Council from entering into the intended contract with Virgin. There was an exchange of letters before the issue of proceedings between the Trusts and the Council, which in summary amounted to requests for information by the Trusts together with complaints (based on such information as the Trusts in fact were given and had at that time); together with increasingly robust rejection by the Council of any breach of Regulation or unlawfulness in the procurement exercise at all. The proceedings were then issued by the Trusts on 14 December 2017, and on 9 January 2018 the Council applied to the court to lift that automatic suspension under Regulation 96(1)(a) of the Regulations. The relief sought in the proceedings is principally that the award decision in Virgin's favour be set aside and that the Trusts be awarded the contract. Damages are claimed as an alternative. The Trusts had already issued an application in respect of disclosure on 29 December 2017 and this had been listed before me for hearing on 25 January 2018. In the days leading up to that hearing, the disclosure issues between the Trusts and the Council were, finally, compromised (as in my judgment they generally ought to be in such a case). Sensibly advised parties such as the Trusts and the Council should strive to save the collective public purse unnecessary expenditure on legal costs, and arguing at length about disclosure is one of the ways in which such wasted expenditure can readily be incurred.

7. I will not therefore go through the factual background both to the provision of limited documentation by the Council, and eventual agreement to produce further documentation, between the parties. It was therefore suggested and agreed that the court time available for the disclosure application be used instead for the Council's application, which was plainly urgent. I am indebted to counsel on both sides for their extremely helpful submissions. I am also most grateful to the clerks to counsel who, between them, were able and willing to provide the necessary documentation for the actual hearing bundles so that the hearing could be effective. It is no part of the function of the court staff to prepare the actual hearing bundles for parties, and such preparation remains the obligation of the solicitors, whether they be in-house or not. Given the wide use of email, it is a temptation sometimes to solicitors to use that medium to provide an avalanche of documents directly to the court and hope, or assume, that the court staff will prepare the hearing bundles. This temptation should be resisted.

8. In the Particulars of Claim, the Trusts allege a number of deficiencies in the evaluation including unequal treatment as between the bids of the Trusts on the one hand and Virgin on the other, a failure to apply the scoring criteria correctly and manifest errors in the evaluation. Pleadings in procurement cases sometimes, in due course, require amendment as a result of the disclosure. However, regardless of that, the actual pre-weighting adjusted scores of the two bids were only 2 marks apart in any event on what could be called the technical content (as distinct from the costs content) of the two bids.

The application to lift the automatic suspension

9. The Council relies upon three witness statements of Ms Christine Rishton dated 9 January 2018, 22 January 2018 and 23 January 2018. The latter statement served just before the hearing became necessary as Ms Rishton realised that what she had said in her second statement the day before was not factually correct. This point was whether, in contractual terms, the Council could simply extend the existing contracts with the Trusts in the event that the automatic suspension were not lifted by the court. She had said that the Council could not do so. It was then realised that the Council could under the terms of the contracts do so, as the contracts themselves contained a contractual option (or ``extension clause'') to this effect. The Trusts relied upon the witness statements of Ms Louise Giles and Ms Pauline Tschobotko, one from each of the two Trusts, and both being dated 19 January 2018.

10. The Council relies upon two features which Mr Karim QC on its behalf submits apply in this case. Firstly and most importantly, he submitted that...

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