Harris v Nickerson

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IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS IN WALES TECHNOLOGY AND CONSTRUCTION COURT (QBD)

Cardiff Civil Justice Centre 2 Park Street, Cardiff, CF10 1ET 16 November 2021

B e f o r e :

HIS HONOUR JUDGE KEYSER QC SITTING AS A JUDGE OF THE HIGH COURT ____________________

____________________

Rhodri Williams Q.C. (instructed by Watkins and Gunn) for the Claimant Jorren Knibbe (instructed by NWSSP Legal and Risk Services) for the Defendant Hearing dates: 18 and 19 October 2021 ____________________

HTML VERSION OF JUDGMENT APPROVED ____________________

Crown Copyright ©

Covid-19 Protocol: This judgment was handed down remotely by circulation to the parties' representatives by email and release to BAILII. The date and time for hand-down is deemed to be 10.30 am on 16 November 2021.

JUDGE KEYSER QC:

Introduction

In these proceedings the claimant claims relief for what it alleges are the defendant's breaches of public procurement law. It relies on three bases of claim: (1) a right of action pursuant to regulations 89 and 91 of the Public Contracts Regulations 2015, as amended ("the 2015 Regulations"); (2) principles of retained EU law; (3) breach of a contract as to the conduct of the procurement.

This is my judgment upon the defendant's application dated 10 September 2021 for summary judgment on the claim under CPR r. 24.2 or for an order striking out the claim pursuant to r. 3.4(2)(a).

The law relating to applications under r. 24.2 and r. 3.4 is familiar; it has been set out many times in the case-law, and I shall not set it out again. For no better reason than convenience, I refer to my own recent summary in Maranello Rosso Limited v Lohomij BV and others [2021] EWHC 2452 (Ch) at [16]–[25] and to the cases mentioned there. I also have regard to the observations of Stuart-Smith J, in the context of public procurement, in MSI-Defence Systems Limited v Secretary of State for Defence [2020] EWHC 1664 (TCC) at [5]-[8]; however, no special or different principles apply in public procurement cases.

In the present case, the defendant contends that the court has the relevant materials to enable it to hold now that the various bases of claim advanced by the claimant are bad as a matter of law. It contends, accordingly, that no part of the claim has a real prospect of success and that there is no other reason why it should be permitted to proceed to trial.

The application was heard over two days by Cloud Video Platform. I am grateful to Mr Jorren Knibbe and Mr Rhodri Williams QC, counsel respectively for the defendant and the claimant, for their detailed and focused submissions. In the remainder of this judgment I shall first set out the material facts, citing extensively from the relevant documents, and then consider in turn the issues that arise on the application in respect of the three bases of the claimant's claim.

The facts

The parties

The defendant is the local health board responsible for the provision of health and social care services under the National Health Service (Wales) Act 2006 in the local health board area comprising Blaenau Gwent, Caerphilly, Monmouthshire, Newport, Torfaen and South Powys (the "ABUHB Area").

The claimant is a registered charity that provides services for people in England and Wales with mental health problems, substance misuse problems and co-occurring and complex needs. In fact, it was not the claimant but a similar charity, Hafal, that tendered in the procurement to which these proceedings relate. But, at least for the purposes of this application, the defendant now accepts that by reason of a merger on 1 April 2021 the claimant acquired the rights and liabilities of Hafal and that it is entitled to bring these proceedings. I shall make no further reference to Hafal and shall proceed on the basis that anything it did was done by the claimant.

Before the Procurement

On 2 December 2020 the defendant sent a notice (the "Event Notice") by email to potential providers, advertising its intention to hold a "Gwent Sanctuary Engagement Event" (the "Engagement Event") by a meeting on Microsoft Teams on 10 December 2020. The Event Notice stated:

Representatives of the claimant attended at the Engagement Event, at which the defendant gave two presentations: the first outlined its proposals for the planned service (the "Sanctuary Service"), and the second concerned the planned procurement process. Each presentation included the display of a set of slides.

The first presentation began with a slide headed "Strategic Context", which included the text: "Together for Mental Health 10 year strategy – 3 year Delivery Plan". There followed a slide headed "Our Vision", which said that the defendant's vision was to provide:

Safe space for people outside of normal working hours

Non clinical, homely environment

Staffed by third sector

Work in partnership with other services to liaise, sign post and broker support."

For adults experiencing emotional/life crisis

Operated from physical building which is Covid-19 compliant

Opening ?6-9pm – 3am Thurs/Fri/Sat/Sun

Self-referral or professional referral via phone with triage in place

Availability of 121 support

Communal areas

Facilities to provide food/showers

Transport

Recovery plans

Onward referral with follow up

Presence of peer mentors / peer support workers

Building close to transport links etc"

The second presentation, which was given by Mr Jack Robinson, a Procurement Business Manager within the NHS Wales Shared Services Partnership ("NWSSP"), included a slide that set out the indicative procurement timetable. All that need be noted here is that, after notification of the award decision on 18 February 2021, there was to be a "Voluntary Standstill Period" until 1 March 2021.

The Procurement

On 5 March 2021 the defendant commenced a procurement exercise ("the Procurement") for the award of a contract for the provision of the Sanctuary Service within the ABUHB Area by publishing a Contract Notice on the Sell2Wales website. The Procurement was conducted by NWSSP on behalf of the defendant and, after publication of the Contract Notice, was conducted using the eTenderWales online portal (the "Portal").

It is common ground that the correct detailed description of the required services was set out not in the Contract Notice but in the Sanctuary Provision Service Specification (the "Service Specification") that was provided as Appendix A to the Invitation to Tender (see below). However, section 2.2 of the Contract Notice gave the following overview of the Sanctuary Service:

Section 2.3 of the Contract Notice set out "Commodity Codes" as follows:

85000000 Health and social work services

85100000 Health Services

85144000 Residential health facilities services

85323000 Community health services.

Section 2.4 of the Contract Notice, headed "Total quantity or scope of tender", stated simply: "122,000".

Section 3 of the Contract Notice, headed "Conditions for Participation", stated: "Agreement to NHS Wales Standard Ts and Cs for services".

Anyone who, upon reading the Contract Notice, wished to participate in the Procurement would have to do so via the Portal. The home page of the Portal contained some basic information, including the following:

"Estimated Value of Contract – 122,000"

"Currency – GBP"

"Type of contract – Services"

"Contract duration – 12"

The documents available on the Portal included the Invitation to Tender ("ITT"), the Service Specification at Appendix A to the ITT, and the NHS Wales Standard Terms and Conditions for the Provision of Services ("the Standard Terms") at Appendix C to the ITT.

At the start of the ITT was a Notice in several paragraphs, including the following:

Section 1 of the ITT, "Introduction", began with a summary in identical terms to the overview in the Contract Notice (paragraph 13 above). Section 2, headed "Tender", stated:

Section 3 of the ITT, "Health Board Requirements", contained the following provisions:

Section 5.1 of the ITT out the selection and award criteria; these need not be set out here, but they included a presentation that was to be held via Microsoft Teams on 9 April 2021. A relevant entry was headed "Commercial Response":

Section 6 of the ITT set out the Procurement Timetable: the deadline for submission of tenders was noon on 29 March 2021; the notification of the award decision was to be on 16 April 2021; and the contract was to be awarded on 27 April 2021 and to commence on 7 June 2021. The period from 16 April 2021 until 26 April 2021 was shown as "Voluntary Standstill Period".

Section 9.1 of the ITT provided:

Section 11.3 of the ITT provided:

Section 19 of the ITT, "Right to Reject/Disqualify a Bidder", set out various circumstances in which the Health Board reserved the right to reject or disqualify a Bidder in the Procurement; these included that case where

Section 21.2 of the ITT, "General", included the following provisions:

The Service Specification began with a summary in substantially similar terms to the overview contained in the Contract Notice. Section 2 set out relevant background, which included the following passage:

Section 3 of the Service Specification set out the "Service model":

Section 4 of the Service Specification concerned "Service Delivery". It stated that the Sanctuary Service would be "a non-accommodation based service, operating outside of traditional working hours" and that "Access to the Sanctuary Service will be via telephone and all referrals will be triaged including a risk assessment."

Section 5 of the Service Specification, "Operational Delivery", contained the following passages:

Section 10 of the Service Specification, "Staff Competencies and Skills", included the following:

Section 11 of the Service Specification, "Service Outcomes and Quality Monitoring", included these passages:

Section 15 of the Service Specification, headed "Transfer of Undertakings (TUPE) – Retendering Information", included the following passages:

The Standard Terms at Appendix C to the ITT contained the terms and conditions on which the defendant would contract with the successful tenderer. The "Key Provisions" were in Schedule 1. Clause 2 of Schedule 1, headed "Contract Term", provided:

On 26 March 2021 the claimant submitted a tender under the Procurement. The accompanying costings for delivery of the service showed total costs of £121,925.82, a whisker below the maximum budget of £122,000. The components included:

Staff costs: £79,291.65

Building costs £1,000.00

Taxis & Transport £8,160.00

IT-related costs £2,000.00.

On 9 April 2021 the claimant made its presentation to the defendant.

On 7 May 2021 the defendant posted on its electronic portal a tender award notification letter dated 21 April 2021. This showed that the claimant had been unsuccessful and that the defendant intended to award the contract to a rival bidder, Torfaen and Blaenau Gwent Mind ("TBGM"). The letter stated that the standstill period pursuant to regulation 87 of the 2015 Regulations would run until 17 May 2021.

The claimant was dissatisfied with the information provided to it by the defendant and made a request for further information.

On 11 May 2021 the defendant posted a notice giving further information in respect of TBGM's successful tender. This showed that its total score had been 90% as compared to the claimant's 88%. TBGM had been scored more highly than the claimant in respect of two award criteria: Value for Money, and Presentation. The notice stated: "It was a close decision though it was felt the presentation in particular for [TBGM] was stronger and had a bit more detail." Further information was posted on the Portal on 19 May 2021. The claimant promptly sought further information. The defendant agreed to extend the standstill period, first till 21 May and then till 7 June 2021.

On 24 May 2021 the claimant's solicitor sent a detailed Letter Before Claim to the defendant, intimating a claim "under the Public Contracts Regulations 2015 ('the 2015 Regulations') and/or directly enforceable retained EU law rights." The summary nature of the allegations, which is substantially similar to that of the allegations raised in these proceedings, was that the defendant was in breach of its duties of transparency and equal treatment under regulation 18 or regulation 76 of the 2015 Regulations, and was also in breach of its duties under general principles of retained EU law, in that it had:

Failed to evaluate the tenders in accordance with the evaluation methodology set out in the Invitation to Tender;

Evaluated the claimant's tender by way of a comparison with TBGM's tender rather than in accordance with the advertised methodology, or applied evaluation criteria that were not advertised in the Invitation to Tender;

Committed manifest errors of assessment in the evaluation of the claimant's tender, at the very least in respect of the two criteria of Value for Money and Presentation;

Committed manifest errors of assessment in the evaluation of TBGM's tender;

Failed to provide sufficient information or disclosure to comply with its duty of transparency under regulation 86 of the 2015 Regulations.

On 28 May 2021 the defendant sent a letter in reply to the claimant's solicitor. It said that, upon reviewing the tender process in the light of the Letter Before Claim, the defendant had found that "an administration error occurred at the point of drafting the award letters", in that the bidders had been provided with the scoring of an individual panel member instead of the evaluation panel consensus score. The result of the Procurement was unchanged, and the letter expressed the defendant's conclusion "that the process followed was robust and the evaluation outcome is correct and in line with the criteria stated in the tender documentation". However, the letter said that a new tender award notification letter would be issued and that, in the circumstances, the defendant was extending the standstill period until 7 June 2021, "taking account of the full voluntary 10-day standstill period stated in the tender documentation", and the contract would be awarded on 8 June 2021.

The new tender award notification letter was also dated 28 May 2021. Annex 1 set out the scores obtained by the claimant and by TBGM against the defendant's evaluation criteria, "together with reasons for the award of those scores, including the characteristics and relative advantages of the successful tender compared to your tender." For the purposes of this judgment it is unnecessary to set out the details of the evaluation and scores.

The proceedings

The claim form was issued on 3 June 2021 and served on 4 June 2021.

On 9 June 2021 I made an order by consent, staying further proceedings in the case until 2 July 2021 and extending the time for filing and service of particulars of claim until 16 July 2021.

On 11 June 2021 the defendant responded to the letter before claim. It is unnecessary for me to set out or summarise the contents of that letter or any subsequent correspondence.

On 6 July 2021 I made an order by consent that any requirement that might be imposed by regulation 95(1) of the Public Contracts Regulations 2015 ("the 2015 Regulations") that the defendant refrain from entering into a contract with TBGM arising from the Procurement come to an end at the date of the order.

On 15 July 2021 the claimant served its particulars of claim. The general tenor of the case advanced was the same as that set out in the Letter Before Claim. The three legal bases of claim—the 2015 Regulations, retained EU law, and contract—will be considered below.

The defendant served its defence on 6 August 2021. The claimant served a reply on 27 August 2021. It is unnecessary here to refer to their contents.

On 10 September 2021 the defendant filed and served its application for summary judgment or an order striking out the claim. Witness statements were filed and served in support of and in opposition to the application. I shall make some reference to particular parts of the witness statements, but it is unnecessary to list the statements or discuss them in detail.

The grounds of the application

The following grounds of application are now advanced by the defendant (an additional ground, concerning the identity of the tendering party, being no longer pursued: see paragraph 7 above):

The Public Contracts Regulations 2015

The relevant provisions

Part 2 of the 2015 Regulations (regulations 3 to 84A, Chapters 1 to 4) implements in domestic law Directive 2014/24/EU ("the Public Contracts Directive"). Notwithstanding the repeal of the European Communities Act 1972, the 2015 Regulations continue in force by reason of section 2(1) of the European Union (Withdrawal) Act 2018. "Unless the context otherwise requires, any expression used both in Part 2 and in the Public Contracts Directive has the meaning that it bears in that Directive": regulation 2(2). Further,

Part 3 of the 2015 Regulations (regulations 85 to 104, Chapters 5 and 6) implements Directive 89/665/EC, as amended ("the Remedies Directive"). Chapter 5, Facilitation of Remedies (regulations 85 to 87), applies to contracts and framework agreements falling within the scope of Part 2: regulation 85. (This case does not concern framework agreements and I shall not refer to them further.) Regulation 86 requires a contracting authority to send to each candidate and tenderer a notice communicating its decision to award the contract. Regulation 87 provides that, where regulation 86 applies, the contracting authority must not enter into the contract before the end of "the standstill period"; there are detailed provisions concerning the calculation of the standstill period.

Chapter 6 of the 2015 Regulations is titled "Applications to the Court". Regulation 89 provides:

The claim under the 2015 Regulations is accordingly brought pursuant to regulations 89 and 91. It is common ground that the claimant is within the definition of "economic operator" and the defendant within the definition of "contracting authority" in regulation 2(1). The issue is whether the Procurement was within the scope of Part 2 of the 2015 Regulations.

Regulation 3 makes provision in respect of the subject-matter and scope of Part 2. It provides, so far as is material for present purposes:

The 2015 Regulations apply to three broad types of procurement: "public supply contracts", which concern purchase, lease, rental etc of products; "public works contracts", which, broadly speaking, cover building or civil engineering works; and "public service contracts", for the provision of services other than those within the scope of public works contracts.

Regulation 5(1) provides, so far as is relevant:

Regulation 4 contains provisions addressing the case of "mixed procurement". Paragraph (1), which is not perhaps as clearly drafted as it might have been, contains the following text:

Regulation 6 contains rules for calculating the estimated value of a procurement. The following paragraphs are particularly material:

The issue

The basic issue, as regards the claim under the 2015 Regulations, is whether the value of the Procurement was at least equal to the applicable threshold in regulation 5. If (as the claimant says) it was, Part 2 of the 2015 Regulations applied, the defendant was subject to the duty in regulation 89, and a claim under regulation 91 will lie for a breach of that duty. If (as the defendant says) it was not, no such claim will lie.

The basic issue gives rise to two critical questions. First, what was the value of the Procurement? Second, what was the applicable threshold? For reasons that will become apparent, I find it convenient to take them in that order.

What was the value of the Procurement?

In Healthcare at Home Limited v The Common Services Agency [2014] UKSC 49 , [2014] 4 All ER 210 , the Supreme Court explained the correct approach to the interpretation of documents in a public procurement; the case concerned the published award criteria. The basic rule is that the documents are to be taken in the sense in which they would have been understood by a reasonably well-informed and normally diligent tenderer (an "RWIND tenderer"). This standard is objective and impersonal: though the circumstances that would have informed the RWIND tenderer are relevant, the particular understanding held by any actual persons is irrelevant. The following selected passages from the speech of Lord Reed make the important points clearly:

In the present case, it is also helpful to see how Lord Reed dealt with the particular argument raised in the Healthcare at Home case:

In the present case, the value of the Procurement would appear at first sight to have been £122,000, because that was the figure specified for the budget in the Procurement documents. If the value was indeed £122,000, it was below all of the possibly applicable thresholds and the claim under the 2015 Regulations cannot succeed. However, on behalf of the claimant, Mr Williams submitted that the value of the Procurement was not £122,000 but £488,000 and that the issue between the parties was not one that could be determined without a trial. His argument, in summary, was that on a true construction of the Procurement documents, in the light of the relevant surrounding circumstances, no total price was indicated and no fixed term was provided for the contract; therefore the case falls within regulation 6(19)(b) and the value of the Procurement was (£122,000 ÷ 12 x 48 =) £488,000.

Because both sides referred me to the contents of the presentations at the Engagement Event, I have referred to them in some detail: see paragraphs 10 and 11 above. However, in my view those matters are irrelevant to the determination of the value of the Procurement and to the correct understanding of the Procurement documents. This is simply because it could not be supposed that the contents of the presentations at the Engagement Event would be known by any tenderer who was not present or represented at that event. The concept of an RWIND tenderer cannot be delimited in the present case in terms of attendance at the Engagement Event, because (a) that event was not part of the Procurement, (b) distribution of the flyer for the event was limited (see paragraphs 14 to 16 of the statement of Mr Mark Lewis, a Commissioning Manager within the Mental Health and Learning Disabilities Division of the defendant) and (c) participation in the Procurement was not restricted to those who had attended the Engagement Event. Even if it were the case that only persons who attended at the Engagement Event bid in the Procurement, the position would be no different. Were it otherwise, those who did not bid because their understanding of the Procurement was not informed by the Engagement Event would be disadvantaged. Therefore the presentations at the Engagement Event cannot affect the interpretation of the Procurement documents; if they did, not all RWIND tenderers would necessarily understand the Procurement documents in the same way.

Even if that were wrong, I should not think that anything said at the Engagement Event would reasonably be capable of affecting the interpretation of the Procurement documents. The presentations made clear that the plan was for a three-year project but that there was to be a one-year pilot. The "Proposed Model" referred specifically to the pilot. There was nothing in the presentations that indicated that the party that bid successfully for the pilot would be awarded a longer contract. More importantly, there was nothing in the presentations that was capable of contradicting a limitation to a 12-month period in the Procurement documents themselves. Of course, the actual understanding held by any RWIND tenderer, including the claimant, is irrelevant.

Whether there is any properly relevant matter concerning the surrounding circumstances that might have affected the understanding of the RWIND tenderer, I shall consider later. Now I turn to consider the Procurement documents.

Regulation 2(1) contains the following definition:

The Portal home page is significant, because of its clarity. As well as showing the contract duration as 12 (which can only mean 12 months, as Mr Williams acknowledged), it states plainly the estimated value of the contract at £122,000. The Contract Notice also stated the "Total quantity or scope of tender" at "[£]122,000". In my view, that figure is to be taken as the contracting authority's estimate of the total amount payable and therefore as the basis of the calculation of the estimated value of the Procurement for the purposes of regulation 6(1).

It seems to me that any fair reading of the remainder of the Procurement documents is consistent with that conclusion. The ITT stated that the "maximum annual budget" for the contract was £122,000. Mr Williams submitted that the word "annual" indicated continuation across more than one year. I do not agree. The word "annual" can mean "of or pertaining to the year; reckoned, payable or engaged by the year" (Oxford English Dictionary, first definition). It is unnecessary to interpret the word "annual" in the ITT to mean anything other than "for the year". As the Contract Notice itself had stated that the total quantity of the tender was £122,000, and as the Portal home page had shown the estimated value of the contract as £122,000 and the duration as being 12 (scil. months), it seems to me rather perverse to suppose that use of the word "annual" had any other meaning. (The claimant's understanding of the word is irrelevant, for reasons already mentioned. I observe with interest, however, that the costings included with the claimant's bid included figures—for recruitment, building costs, mobile telephones, equipment and furnishings, and IT-related costs—that would hardly be likely to be recurring costs.)

On behalf of the claimant, however, Mr Williams relied both on matters contained within the Procurement documents and on relevant circumstances within the knowledge of a RWIND tenderer in support of the contention that there was no indication of a total price and that the contract did not have a fixed term.

The matters particularly relied on in the Procurement documents were the following. The Contract Notice did not state whether the contract was for a fixed term or, if it was, what that term would be. The ITT, though stating an annual budget, did not go further and state a total price or a fixed term. The Service Specification was silent on both points, but it referred in section 11 to "a six-monthly review" with a report of "annual accounts"; the reference to TUPE in section 15, in the context of a new service, made it "reasonable to expect the service to operate for at least two years" (statement of Alun Thomas, the claimant's Chief Executive); and the requirement in section 10.11 for staff to have a development plan "on an annual cyclical basis" points to a total length of contract of more than one year. In the Standard Terms, clause 2.3 of Schedule 1, taken with clause 8 of Schedule 2, had the effect that the contract itself contained provision for its own extension.

Regarding the relevant surrounding circumstances that would be known to an RWIND tenderer, the matters relied on were set out in the statement of Mr Alun Thomas in response to the defendant's application. First, "[It] is not an uncommon practice to award a pilot which then continues post pilot without a further procurement exercise. … This is certainly what we as service providers expect" (paragraph 16). Second, "Commercial leases tend to be for periods of five years or longer … This was entirely consistent with the contract being let for three years after the initial pilot project" (paragraph 17).

In my judgment, these points do not show either that it is arguable that regulation 6(19)(b) applies or that there is any matter requiring resolution by evidence at trial. I have already remarked on the provisions in the Procurement documents showing clearly the fixed term and the estimated value of the contract. Taken by itself, the reference to a "six-monthly review" could indicate a longer contract period than one year; in context, however, it is indicative only of a progress report, not of some ongoing contract after the 12-month period. The same applies to the reference to "annual accounts", which, whatever else it might mean, cannot possibly refer to accounts for a full 12-month period of the operation of the Sanctuary Service at the half-way stage of the pilot. The provisions of section 10.11 merely require the successful tenderer to have good employment practices.

The claimant's reliance on the Standard Terms is misplaced. Clause 2.3 of Schedule 1 makes clear that no extension is permissible for a longer duration than was originally advertised. The duration advertised was 12 months. The power to extend in clause 8 of Schedule 2 cannot therefore permit any actual extension of the contract in this particular Procurement. Extension of a contract is a modification of the contract and, for the purpose of preventing avoidance of the public procurement regime, is regulated by regulation 72 of the 2015 Regulations, which makes specific provision for the circumstances in which "[c]ontracts … may be modified without a new procurement procedure in accordance with [Part 2]". Mr Williams made no reference to it, no doubt because it is clear that none of it can avail the claimant. I shall not set out the detailed provisions of regulation 72. However, in light of the claimant's reliance on words, phrases or passages in the Procurement documents that are said to imply a continuation of the services under the contract beyond the 12-month period, I note the opening words of the first case of permissible modification in regulation 72(1)(a): "where the modifications, irrespective of their monetary value, have been provided for in the initial procurement documents in clear, precise and unequivocal review clauses " (my emphasis).

In the circumstances, the first point made by Mr Alun Thomas has no force. The understanding or expectation of the claimant as a service provider is irrelevant, for reasons already explained. The second point he makes also goes nowhere. The manner in which a tenderer proposes to provide the necessary premises is a matter for that tenderer, as are the terms on which it takes any necessary lease, and not even the claimant suggests that the award of the contract for the pilot provided any guarantee of an extension for the remainder of the intended project.

In his oral submissions, Mr Williams said that the defendant's estimate of the total amount payable, namely £122,000, was "very suspicious" in that it was only just below the threshold in regulation 5(1)(b). He questioned whether the figure might have been manipulated with a view to avoiding the application of the 2015 Regulations and whether there might be an infringement of regulation 6(5). There is, however, no allegation of deliberate deflation or manipulation of figures and no evidence to justify such an allegation. Indeed, the evidence of Mr Mark Lewis, confirmed by an exchange of emails that he exhibited to his statement, was that in the course of preparing the Procurement he raised the question of applicable thresholds with Mr Jack Robinson, who informed him that the relevant threshold would be that for the "Light Touch" regime, namely the threshold in regulation 5(1)(d). Whether rightly or wrongly, the defendant did not think that the threshold in regulation 5(1)(b) was the relevant one. There is no basis for any suggestion that it was attempting to avoid the application of that threshold. [1]

In the circumstances, in my judgment, it is possible and appropriate to hold now that the value of the Procurement was below all of the thresholds in regulation 5(1) and that the Procurement was not one to which Part 2 of the 2015 Regulations applied. The claimant has no realistic prospect of establishing at trial that the value of the Procurement was £122,976 or higher. Accordingly, the claim under sections 89 and 91 of the 2015 Regulations must fail.

If this conclusion were wrong and there were a reasonably arguable case that the value of the Procurement was £488,000, it would be necessary to decide which of the thresholds in regulation 5(1) was the applicable one. For completeness, I address that question now.

The applicable threshold

If the value of the Procurement was £488,000, Part 2 of the 2015 Regulations applied to it unless the applicable threshold was that under regulation 5(1)(d), namely £663,540.

The question is whether the Procurement should properly be considered to be (i) for a public service contract awarded by a central government authority (regulation 5(1)(b)) or (ii) for a public service contract "for social and other specific services listed in Schedule 3" (regulation 5(1)(d)). [2] The parties were agreed that that question is to be answered in accordance with regulation 4(1)(b)(i), by identifying the "main subject-matter" of the contract as "determined in accordance with which of the estimated values of the respective services … is the highest."

The rationale for the different treatment of contracts to which regulation 74 and Schedule 3 apply (which are subject to what is known as the Light Touch Regime) is set out in recital 114 to the Public Contracts Directive:

Identification of the relevant categories of services to the person is by means of a standard classification system in accordance with the Common Procurement Vocabulary ("CPV") in Annex 1 of Regulation (EC) No. 2195/2002 as substituted by Regulation (EC) No. 213/2008. The CPV consists of a main vocabulary and a supplementary vocabulary. It is the main vocabulary that is relevant to this case. Annex 1 explains the main vocabulary as follows:

The first two digits identify the divisions (XX000000-Y)

The first three digits identify the groups (XXX00000-Y)

The first four digits identify the classes (XXXX0000-Y)

The first five digits identify the categories (XXXXX000-Y)

By way of a brief illustration of the way in which the tree structure works (and adding emphasis to show the structure):

Code 85 000000-9 is for the division "Health and social work services".

Code 851 00000-0 is for the group "Health services".

Code 8511 0000-3 is for the class "Hospital and related services".

Code 85111 000-0 is for the category "Hospital services".

There then follow several codes, each commencing 85111, for various specific hospital services: for example, Code 85111320-9 ("Obstetrical hospital services").

Code 85112 000-7 is a new category, "Hospital support services"; some further codes, all commencing 85112, identify precise cases within that category.

Code 8512 0000-6 is a new class, "Medical practice and related services", within the group "Health Services". There then follow categories within that class and precise instances of those categories. Several further classes within the group "Health services" follow, among them "Dental practice and related services" (Code 8513 0000-9) and "Miscellaneous health services" (Code 8514 0000-2).

Then there is a new group, "Veterinary services", with Code 852 00000-1.

The next group is "Social work and related services", with Code 853 00000-2. The classes within that group are "Social work services" (Code 8531 0000-5) and "Social services" (Code 8532 0000-8).

Across the codes as a whole, not every group has classes, not every class has categories, and not every category is further ramified by means of the final three digits. It depends on the perceived need for further specificity.

Recitals 118 and 119 of the Public Contracts Directive are of some assistance in the interpretation and application of the CPV codes:

Mr Knibbe advanced a number of submissions relating to the interpretation of the CPV, as follows:

I consider that those propositions are correct; however, it is unnecessary for me to express a concluded view on proposition (5) in the form stated. Propositions (1) and (2) follow from the logic of the tree structure and from recital 119. Proposition (3) simply means that the designation of a particular service turns on the interpretation and application of the codes within the tree structure, not on whether the resulting classification accords with conventional usage in any particular country. Proposition (4) is, I think, obvious.

Proposition (5) seems to me to accord with the intention of the CPV and to gain support from recital 119. However, it may be arguable that recital 119 does not necessarily preclude the possibility of a lacuna in the subordinate divisions by reason of a failure to mention all relevant positions. Nevertheless, even if such a lacuna were possible (that is, the service in question were not identified by the lowest part of the tree structure), it would follow from propositions (1) and (2) that the service might fall within a higher level of the tree structure, and that those higher levels would properly be interpreted by reference to the lower—and, where appropriate, coordinate—levels and by analogical reasoning from the contents of those levels. Thus the meaning of the high-level description of a division would be shown by the description of the classes; and the meaning of the description of a class would be shown by the description of the groups (and, perhaps, that of any coordinate classes); and that of the groups by that of the classes (and, perhaps, that of any coordinate groups). Accordingly, if no specific code expressly referred to a particular service, it might nevertheless be possible to identify a code that did apply to that service.

As for proposition (6), the very purpose of the use of the CPV requires that the application of a particular code to a particular service be a "hard-edged" question. Thus the codes are binding on the contracting authority, and the use it makes of them is subject to review by the domestic courts, which must ensure that the services in question and the CPV codes correspond. See Case C-411/00, Felix Swoboda GmbH v Österreichische Nationalbank EU:C:2002:660, [2002] ECR I-10567 at [49]-[51] and [61]-[63]; and Case C-465/17, Falck Retungsdienste GmbH v Stadt Solingen EU:C:2019:234 , [2019] PTSR 1684 at [27] and [36]-[50].

In the present case, the relevant services identified in Schedule 3, and thus within the scope of regulation 5(1)(d), are "from 85000000-9 to 85323000-9", comprising the entire division "Health and social work services". The parties are at odds as to whether the appropriate classification of the services in the Procurement was within that division.

For the claimant, Mr Williams' primary submission was that the correct categorisation of the services in the Procurement is a complex matter of fact that will have to be determined at trial on the basis of the oral evidence and the Procurement documentation. I do not agree. It can be determined now, as a matter of the construction of the Procurement documents and the application of the CPV codes. It has not been explained what oral evidence would be relevant or how it could be relevant. In my judgment, it simply could not be relevant. Indeed, if it were otherwise, it would be hard to know how the appropriate codes—and thus the applicable procurement regime—could be known at the procurement stage. The estimated value of a procurement is to be calculated prospectively, not retrospectively: see regulation 6(7).

I agree with the submission of Mr Knibbe that the essence of the services to which the Procurement related was support to individuals experiencing crisis with the aim of preventing the onset of mental health illness requiring clinical intervention. I also agree that no specific CPV code applies to a service of that nature and that the requirement is to find the code or codes most appropriate to what was to be within the scope of the contract.

The claimant's case is that the Contract Notice wrongly categorised the services (this is, in part, accepted by the defendant). Paragraph 18 of the particulars of claim states:

In my judgment, the categorisation of the principal services proposed by the claimant is clearly wrong. I deal with the specific codes in turn.

Code 98113000-8 is the category code for "Services furnished by specialist organisations". The class is "Services furnished by business, professional and specialist organisations" (code 98110000-7). The group is "Membership organisation services" (code 98100000-4). The division is "Other community, social and personal services" (code 98000000-3); this is the final division in the CPV. The groups within the division are, in addition to "Membership organisation services", the following: "Equal opportunities consultancy services" (code 98200000-5); "Miscellaneous services" (code 98300000-6); "Private households with employed persons" (code 98500000-8); "Services provided by extra-territorial organisations and bodies" (code 98900000-2). The group for "Miscellaneous services" includes a large number of varied classes and categories, including laundering, pressing and dyeing services, hair, beauty and cosmetic services, Turkish bath and spa services, accommodation services, portering services, janitoring services, car park management services, port management services, funeral services, cremation services, undertaking services, and dog kennel services. There is clearly a distinction between the wide range of "Miscellaneous services"—many of which could be provided by business or even professional entities—and "Membership organisation services". "Membership organisation services" include not only "Services furnished by business, professional and specialist organisations" but two further classes, namely "Services furnished by trade unions" (code 98120000-0) and "Miscellaneous membership organisation services" (code 98130000-3). The category and specific codes within the class "Miscellaneous membership organisation services" are for the following services: "Religious services"; "Services furnished by political organisations"; "Services furnished by social membership organisations"; "Civic betterment and community facility support services"; "Services provided by youth associations."

The following conclusions may be drawn. First, the division "98" is residual, in the sense that it is concerned with services that are not appropriately categorised under earlier divisions (cf. "Other" in the description of services). Second, the group "981" concerns services provided by a range of membership bodies, such as guilds, associations, clubs, political bodies and religious bodies. Mr Knibbe suggested that training or networking events provided by a trade guild would be an example; I agree. Third, the codes 98000000-3 and 98100000-4 are inappropriate for the services in the Procurement, because (a) the services are appropriately dealt with under other codes, as explained below, and in any event (b) the Procurement was not for "Membership organisation services".

This second reason also disposes of the suggestion that code 98133100-5 ("Civic betterment and community facility support services") applies; the first reason applies as well. However, this code is in fact one of those identified in Schedule 3, so if it were the appropriate designation for the major services to be provided pursuant to the Procurement it would indicate that regulation 5(1)(d) was applicable.

As has been explained, code 98300000-6 is the group code for a wide range of "Miscellaneous services". Code 98334000-3 is the category code for "Wellness services". The class code is 98330000-5, "Physical well-being services". The other categories within the class are for "Turkish bath services", "Spa services" and "Massage Services". It is therefore clear that "Wellness services" have to do with bodily health and vitality. The Procurement related to quite different matters. Code 98333000-5 is inappropriate.

The other principal code advanced by the claimant as being appropriate is code 45215221-2, "Daycare centre construction work". That is a specific code within the category 45215000-7, "Construction work for buildings relating to health and social services, for crematoriums and public conveniences". The class is code 45210000-2, "Building construction work". The group is code 45200000-9, "Works for complete or part construction and civil engineering work". The division is code 45000000-7, "Construction work". None of this has anything to do with the present case. The defendant was not seeking construction services. The successful tenderer would have to provide the services at suitable premises; conceivably, though not practically, it might choose to construct them in order to have premises it could use, but that would be its own affair. The services required by the defendant were the services provided within the premises, not the construction of premises.

It is unnecessary to burden this judgment with a discussion of the ancillary services proposed by the claimant. None of them could affect the identification of the main subject-matter of the contract.

The Contract Notice identified four codes; see paragraph 14 above. The defendant accepts that the third of those codes, for "Residential health facilities services", is wrong but it maintains that the other three are correct. Accordingly, it contends that group code 85100000-0 ("Health services"), or the category code 85323000-9 ("Community health services"), is appropriate. Alternatively, it relies on the higher-level divisional code 85000000-9 ("Health and social work services"). By its defence it proposes that two further codes, both listed in Schedule 3, might be appropriate: code 85312300-2 ("Guidance and counselling services"), and code 85312400-3 ("Welfare services not delivered through residential institutions").

Division 85, "Health and social work services") contains the following groups: 851 ("Health services"), 852 ("Veterinary services": an example, I think, of the way in which the CPV does not accord with common usage in this country), 853 ("Social work and related services"). Group 851 is extensive. Its classes are as follows: 8511 ("Hospital and related services"), 8512 ("Medical practice and related services"), 8513 ("Dental practice and related services"), 8514 ("Miscellaneous health services"), 8515 ("Medical imaging services"), 8516 ("Optician services"), and 8517 ("Acupuncture and chiropractor services"). The only class that could apply is 8514, "Miscellaneous health services". However, the categories do not appear to be applicable: the services were not to be provided by medical personnel (category 85141); and, both as a matter of definition and with regard to the specific codes within the category, it is hard to see that they properly fit within the scope of "Paramedical services" (category 85142). It is possible that the class code 85140000-2 might nevertheless apply. However, if (as I think) the meaning of the class is shown by the other relevant parts of the tree, this seems unlikely.

Group 853, "Social work and related services", contains two classes: 8531 ("Social work services") and 8532 ("Social services"). Class 8531 contains two categories: 85311 ("Social work services with accommodation"—obviously not applicable in the present case) and 85312 ("Social work services without accommodation"). The specific codes in category 85312 include code 85312300-2 ("Guidance and counselling services"), which in turn is ramified by more particular codes for "Guidance services", "Counselling services" and "Family-planning services". Apart from the last one, these codes seem appropriate for the services in the Procurement, though they were not included in the Contract Notice. Class 8532, "Social services", contains only three categories and no more specific codes: 85321 ("Administrative social services"), 85322 ("Community action programme") and 85323 ("Community health services"). As the health services in the last of these categories are clearly outside group 851 ("Health services"), it is possible that they would include the services in the Procurement. I should, however, be more inclined to think that category 85312 was applicable.

Whether the appropriate code for the primary services to be provided under the contract was 85312300-2 (or one of its more specific subdivisions) or, less probably, 85323000-9, the code was within Schedule 3. Whatever ancillary services may have been provided, including for example the provision of food and drink, far the greater part of the contract cost must have been the staffing costs for the primary services. Accordingly, the effect of regulation 4(1)(b)(i) of the 2015 Regulations is that the Procurement fell within regulation 5(1)(d). Therefore the applicable threshold was £663,540. Therefore, even if the claimant is correct that the value of the Procurement was £488,000, the claim under regulation 89(1)(a) and regulation 91 would fail.

Principles and obligations of retained EU Law

Because the Procurement was below the threshold for the application of Part 2 of the 2015 Regulations, the claimant cannot bring a claim for breach of retained EU law pursuant to sections 89 and 91.

Nevertheless, the claimant contends that the defendant was subject to the general principles and enforceable obligations of retained EU law by virtue of section 4 of the European Union (Withdrawal) Act 2018 ("the 2018 Act"). It relies on "the general principles of equal treatment, transparency, non-discrimination, non-arbitrariness, proportionality, good administration, procedural fairness, and the protection of legitimate expectations" (particulars of claim, paragraph 52). It also contends that the defendant was required to conduct the Procurement, including its evaluation of the tenders submitted, "in a manner which was free from manifest error" (particulars of claim, paragraph 53).

Section 3 of the 2018 Act, as amended, provides in part:

Section 4 of the 2018 Act provides:

Section 5(6) of the 2018 Act gives effect to Schedule 1 to the 2018 Act.

Section 6 of the 2018 Act provides in part:

Schedule 1 to the 2018 Act provides:

Section 8 of the 2018 Act provides in part:

In exercise of the powers conferred by section 8 of the 2018 Act, the Secretary of State for Business, Energy and Industrial Strategy made the Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019 ("the Two Freedoms Regulations"), which came into effect on 31 December 2020. Regulation 2 ("Cessation of freedom of establishment") provides in part:

In the exercise of powers conferred by inter alia section 8 of the 2018 Act, the Minister for the Cabinet Office made the Public Procurement (Amendment etc) (EU Exit) Regulations 2020 ("the Procurement Amendment Regulations"), which came into force on 31 December 2020. Regulation 25 provides in part:

For the defendant, Mr Knibbe's argument was, in brief summary, as follows. A claim for relief on the basis of a breach of general principles of EU law is precluded by Schedule 1, paras 3 and 4, to the 2018 Act. Any attempt to rely on domestic law as incorporating those principles is precluded by regulations 2(1)(b)(i), 3(1)(b)(i) and 4(1)(b) of the Two Freedoms Regulations, because the relevant rights, liabilities etc. derive from Article 18, 49 or 56 of the Treaty on the Functioning of the European Union ("TFEU") and have thus ceased to be part of UK domestic law. The underlying rationale of the principles derived from TFEU—namely, that the procurements were of cross-border interest within the EU internal market—has ceased to apply.

For the claimant, Mr Williams's argument was, in brief summary, to the following effect. The general principles of EU law relied on in paragraphs 52 and 53 of the particulars of claim were well recognised both by the CJEU and by domestic courts before 31 December 2020. Schedule 1, para 3, to the 2018 Act, when read in the context of para 2 of Schedule 1, is only intended to prevent any new general principles of EU law giving rise to a cause of action; it does not prevent such principles being relied on insofar as they were already part of general principles of EU law recognised by the courts, including the domestic courts, before 31 December 2020; therefore it does not preclude a claim based on the general principles relied on by the claimant. The provisions of the Two Freedoms Regulations and the Procurement Amendment Regulations do not preclude a claim in which no breach of any of the specified Articles is alleged. As for the underlying rationale of cross-border interest: even if (which is not accepted) the Procurement had no cross-border interest within the EU, it had a cross-border interest within the UK internal market and the requirements of retained EU law would still be applicable.

A convenient starting point for consideration of these arguments is the definitions in section 6 of the 2018 Act. To paraphrase: "retained EU law" is anything that continues to be part of domestic law by virtue of (for present purposes) section 4 of the 2018 Act. Thus it is domestic law. By virtue of section 6(3) of the 2018 Act, any question as to the meaning or effect of EU retained law is to be decided in accordance with any "retained case law" (whether of the CJEU or the domestic courts) and any "retained general principles of EU law" (general principles of EU law existing as at 31 December 2020) so far as they relate to retained EU law that is preserved in domestic law by (here) section 4 of the 2018 Act and is not otherwise excluded. Accordingly, "retained EU case law" and "retained general principles of EU law" constitute interpretative rules for domestic law that is "retained EU law" but are not per se "retained EU law", though the definitions do not preclude them being so. (I should not have thought that section 6(3), by giving retained general principles of EU law an interpretative authority, makes them part of domestic law; the contrary seems indicated by their strictly interpretative function in specific cases. Given that limited function, the answer to this rather Dworkinesque question may not much matter.)

In my view, Schedule 1, para 2, to the 2018 Act makes no provision for what is part of domestic law. It simply provides that general principles of EU law that were first recognised as such after 2020 are not part of domestic law; though the provision necessarily implies that general principles of EU law are capable of being part of domestic law. This reading of Schedule 1, para 2, is contrary to that stated by Green LJ (with whom Coulson and Haddon-Cave LJJ agreed) in Lipton v BA City Flyer Ltd [2021] EWCA Civ 454 , where he stated at [64]:

Whether or not my reading of Schedule 1, para 2, be correct, I reject Mr Williams' submission that para 3 is to be read subject to para 2. There is nothing in Schedule 1 that suggests such a reading, which is contrary to the plain meaning of para 3. Mr Williams' reading is also contrary to Schedule 1, para 5, which makes clear that references in the Schedule (including para 3) "to any general principle of EU law or the rule in Francovich are to be read as references to that principle … or rule so far as it would otherwise continue to be, or form part of, domestic law" after 2020 by virtue of the 2018 Act. In my judgment, therefore, para 3 is straightforward: general principles of EU law do not ground a cause of action in domestic private or public law.

It is of assistance to consider the position regarding Francovich claims, under Schedule 1, para 4. A Francovich claim for damages is grounded directly on EU law: see Joined Cases C-6/90 and C-9/90, Francovich and Bonifaci v Italy [1991] ECR I-5357 , at [38]-[41]. Such claims are recognised by and justiciable in the domestic courts of those states to which they apply. Paras 4 and 5 of Schedule 1 recognise that sections 2, 3, 4 and 6 might have the effect that the rule in Francovich would continue to be (part of) domestic law; their effect is that the rule will nevertheless not so continue (cf. para 5(1): "so far as it would otherwise continue …"). Two particular points may be noted as being important in this case.

The upshot is that the status of general principles of EU law is that they are a form of interpretative rule as regards any question concerning the validity, meaning or effect of any retained EU law: section 6(3) of the 2018 Act.

Therefore the claimant's claim in paragraphs 52 and 53 of the particulars of claim, which is based squarely on general principles of EU law that are said to have been recognised in domestic law, is untenable. (The obligation not to commit a manifest error in the evaluation of tenders was advanced before me as included in the general principle of EU law requiring good administration.)

If this conclusion were wrong, I should nevertheless accept the further submissions of Mr Knibbe that (1) the lack of a sufficient cross-border interest precludes the claims based on general principles of EU law and (2) the provisions of the Two Freedoms Regulations anyway preclude such claims.

Articles 18, 49 and 56 of TFEU are as follows:

Recital 1 of the Public Contracts Directive, which identifies the rationale of the regulation of public procurement and the derivation and basis of the underlying principles:

The position regarding below-threshold contracts was stated as follows by the CJEU in Case C-298/15, Borta EU:C:2017:266 at [36]:

In R (Chandler) v Secretary of State for Children, Schools and Families [2009] EWCA Civ 1011 , [2010] PTSR 749 , the Court of Appeal explained the position regarding the application of the general principles to the corresponding Directive and Regulations then in force:

It is clear, accordingly, that the general principles relate to the operation of the single internal EU market and that, in the absence of specific legislative provision (such as the Public Contracts Directive), they only regulate procurements where there is at least a realistic prospect of cross-border interest. In view of the nature of the services and the value of the contract, I should regard it as obvious that there was no such prospect in respect of the Procurement. That by itself would dispose of the claim based on general principles of EU law.

Mr Williams submitted that the principles might nevertheless have application within the UK internal market. As he did not explain or develop that submission, it goes nowhere. At all events: first, the relevant general principles of EU law derive from TFEU, which concerns the EU internal market not the UK internal market; second, if the general principles of EU law would not, in the case of a contract lacking a cross-border interest, have regulated the UK internal market before the UK withdrew from the EU, it would have to be explained how they could do so after withdrawal; third, the UK internal market is regulated by the United Kingdom Internal Market Act 2020; fourth, I was not referred to any provisions of that Act; fifth, no case on the basis of that Act is alleged in the particulars of claim.

Finally, as the foregoing paragraphs make clear, the general principles in question in this case derive from Articles 49 and 56 (less obviously from Article 18) of TFEU. If any claim based on them were not otherwise precluded, it would be precluded by the Two Freedoms Regulations (and, possibly, by the Procurement Amendment Regulations).

Tender contract

The claimant contends that the defendant's issue of the Invitation to Tender and the claimant's submission of a tender gave rise to a contract that included terms that the tenders submitted would be evaluated fairly, in good faith, in accordance with the tender procedure set out in the tender documentation, and that the assessment would be free from any manifest error (particulars of claim, paragraph 54). The contract alleged in the particulars of claim is pleaded in the alternative as an express or an implied contract; however, what is contended for is in reality an implied contract.

The leading case remains the decision of the Court of Appeal in Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195 . The defendant local authority had sent out invitations to tender for a concession. The form of tender stated that the defendant did not bind itself to accept all or any part of the tender and continued: "No tender which is received after the last date and time specified shall be admitted for consideration." The plaintiff club submitted a tender within the specified time, but by error the defendant failed to consider it. The Court of Appeal upheld the trial judge's decision that the defendant was liable in damages for breach of contract. The arguments advanced by Mr Toulson QC for the defendant are set out in the leading judgment, that of Bingham LJ, and were in summary: (i) that an invitation to tender is no more than a proclamation of willingness to receive offers; (ii) that a statement that late tenders would not be considered does not mean or imply that timeous offers would be considered; (iii) that no contract could be implied unless it were clearly shown that all the parties intended to make a contract; (iv) that both parties had expected that timeous offers would be considered and it was in both parties' interests that they should be considered, but it was unnecessary to suppose that they were contracting to that effect. Bingham LJ's reasoning at 1201 to 1202 is important and illuminating and I shall set out rather more of it than might be strictly consistent with best practice.

Stocker LJ agreed with Bingham LJ and added some remarks at 1204:

I note the following points from the judgments in the Blackpool and Fylde case. First, contracts are not lightly to be implied. Second, a contract will not be implied unless the facts show that both parties intended to create contractual relations. Third, a claim will not succeed unless the contract that the parties intended to make was to the effect contended for by the claimant. Fourth, in the Blackpool and Fylde case the necessary contractual intention was shown by facts that included, in particular, the relation between the council and those invited to tender, the public obligations of the council as a fiduciary, the express prescription of a clear, orderly and familiar procedure, and the manifest intention that all timeous tenders would be considered. Fifth, the contract that was held to exist merely obliged the council to consider all timeous tenders. Sixth, the defendant council had not said anything to negative the inference that it intended to create contractual relations to the limited extent alleged by the plaintiff. Seventh, Bingham LJ expressly prescinded from expressing any view beyond the facts of the case.

The contract contended for by the claimant in the present case goes far beyond the contract found to exist in the Blackpool and Fylde case. There, the council's contractual obligation was only to consider tenders submitted in time. Such a contract would not avail the claimant in this case, because its tender was considered. Thus the claimant's case is that the defendant contractually bound itself (a) to evaluate tenders fairly, in good faith and in accordance with the procedure set out in the tender documentation and (b) to make an assessment that was free of manifest error.

In support of this far-reaching contract Mr Williams relied on a number of more recent authorities. In Harmon CFEM Facades (UK) Limited v The Corporate Officer of the House of Commons (1999) 67 Con LR 1, the plaintiff (Harmon) contended that, by issuing invitations to tender, the defendant (H of C) had made an offer to the prospective tenderers of a contract whereby it was under the following obligations: (a) to consider each tender; (b) to do so fairly; (c) to award the contract to the tenderer that offered best value for money; (d) to comply with all of the statutory provisions pertaining to consideration of the tenders. HHJ Humphrey Lloyd QC considered the Blackpool and Fylde case and the subsequent decision of the Court of Appeal in Fairclough Building Limited v Port Talbot Borough Council (1992) 62 BLR 82, as well as several Canadian authorities. He said:

I do not think that the Harmon case is of great assistance. The Blackpool and Fylde case expressly does not establish any general rule about the existence of contracts in procurement cases; it rested on the application of basic rules of contract to the facts of the particular case. The Fairclough case did not purport to go beyond the Blackpool and Fylde case in that regard. If (which I doubt) HHJ Humphrey Lloyd QC intended to suggest that either case was authority for the proposition that an implied contract such as was found in the Blackpool and Fylde case arises as a matter of law in public procurement cases—that is, that intention to create contractual relations is assumed from the mere fact of public tender—I would not agree, because that would be contrary to the reasoning in those cases. The Fairclough case concerned the removal of a tenderer from the select tender list on grounds of conflict of interest. The Court of Appeal accepted the correctness of the trial judge's decision that (what was effectively) a Blackpool and Fylde contract had arisen on the facts of the case. The judge had said that "the duty of the defendants was to act in good faith … [and] honestly to consider the tenders of those whom they had placed on the shortlist, unless there were reasonable grounds for not doing so". Parker LJ said that there was nothing in the judgment that conflicted with the Blackpool and Fylde case. This indicates that, when the obligation to consider arises, it can properly be glossed as an obligation to consider honestly and in good faith; so much has been confirmed in later cases, as mentioned below. That remains a limited obligation, however. The remarks of Nolan LJ in the Fairclough case are entirely orthodox and may be noted:

In JBW Group Limited v Ministry of Justice [2012] EWCA Civ 8 , 141 Con LR 62 , an unsuccessful tenderer brought a claim alleging that the defendant was in breach of the Public Contracts Regulations 2006 and the terms of an implied contract that it would consider bids fairly. The defendant contended that the regulations did not apply, and the Court of Appeal agreed. The argument for an implied contract was "that at by offering the contract out to tender, the MoJ was impliedly entering into a contract which would oblige it to treat all tenders equally and with transparency and in accordance with the terms of the tender document": see [57]. Such a contract would impose on the defendant the same substantive obligations as it would have had under the regulations. Elias LJ noted at [60] that, if the regulations had applied, an implied contract would have been unnecessary and inconsistent with the statutory scheme, and that it would be difficult to infer an intention to contract on terms akin to those in the regulations when the defendant had throughout been acting on the assumption that the regulations did not apply. He continued:

Mr Williams also referred in this connection to the remarks of Fraser J in Energysolutions EU Limited v Nuclear Decommissioning Authority [2016] EWHC 1988 (TCC) at [871]-[879] in respect of the recognition in domestic law of the principle of proportionality. However, that case involved a procurement regulated under the Public Contracts Regulations 2006, and Fraser J was not considering implied contracts.

The issue concerning the claim in contract comes down to the application of basic principles of contract law to a simple set of facts. In my judgment it is possible to say now that the claimant's case regarding an implied contract is wrong. The questions whether a contract was implied and, if it was, what its terms were turn on an assessment of the objective evidence. The relevant evidence is all to hand; Mr Williams has not identified any further evidence that could have a bearing on the questions, and in my view there is no likelihood that there could be any such evidence. The reasons why the claimant's claim in contract is untenable can be stated very shortly.

Conclusion

For the reasons set out above, I consider that each of the three grounds of claim advanced by the claimant in these proceedings—the 2015 Regulations, general principles of EU law, and implied contract—has no real prospect of success.

I do not consider that there is any other reason requiring any of the claims to proceed to trial.

In his closing submissions, Mr Williams urged that, if I were to reach the conclusions that I have mentioned, I ought not to give summary judgment but rather to transfer the proceedings to the Administrative Court, where they could proceed by way of a claim for judicial review. He said that this case was not about money—any damages would at best be modest—but about the vindication of the claimant's rights and reputation and the enforcement of the obligations of the defendant as a public body. I have not been attracted to that suggested course of action. There may or may not be valid public law grounds for challenging the defendant's decision in the Procurement—I say nothing on the matter—but the case has been formulated and advanced as a private law claim; I think it would be productive of nothing but confusion to permit it to continue, even at the outset, as a claim for judicial review. If the claimant wishes to pursue remedies in public law, it is open to it to commence a claim in the Administrative Court and to contend that the matters that are presumably thought to justify transfer into that court now would equally justify an extension of time for commencing proceedings under CPR Part 54. I am not to be taken to encourage such a course.

Accordingly, I shall grant summary judgment on the claim in favour of the defendant.

Note 1 As Mr Robinson explains in his own witness statement, it was his understanding of the applicable threshold that led him to include a “voluntary” standstill period in the Procurement as a matter of what he considered good practice. [Back]

Note 2 I do not consider that the Procurement can have been under regulation 5(1)(c), because the defendant is a central government authority and not a sub-central contracting authority. Regulation 2(1) defines “central government authorities” to mean “the Crown and all the bodies listed in Schedule 1 (whether or not they perform their functions on behalf of the Crown)”; the definition expressly excludes Her Majesty in her private capacity. The expression “sub-central contracting authorities” is defined to mean “all contracting authorities which are not central government authorities”. Schedule 1 lists, as one of the central government authorities, “Welsh NHS Bodies”. The defendant is one of six Local Health Boards in Wales established under article 3 of the Local Health Boards (Establishment and Dissolution) (Wales) Order 2009 and Schedule 1 to that Order. The Order was made pursuant to section 11 of the National Health Service (Wales) Act 2006. Section 11 is in Part 2 of that Act, which is titled “Health Service Bodies”. Apart from Local Health Boards, the other Health Service Bodies provided for in Part 2 are NHS Trusts and Special Health Authorities. In my judgment, therefore, the defendant is a Welsh NHS Body and thus a central government authority for the purposes of regulation 5(1)(b). [Back]