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Council succeeds in getting procurement claim brought by NHS trust struck out

The Technology and Construction Court has accepted Cornwall Council's arguments that a procurement claim made against it by the Royal Cornwall Hospitals NHS Trust should be struck out.

Stuart-Smith J had given his ruling in July but has now published his reasons in Royal Cornwall Hospitals NHS Trust v Cornwall Council [2019] EWHC 2211 (TCC).

The dispute concerned a procurement governed by the Public Contracts Regulations 2015.

Royal Cornwall had provided open access reproductive and sexual health services for levels 1-3 in Cornwall under a contract worth £2.88m a year, though it said it spent £3m on providing the services and so made a £120,000 annual loss.

Cornwall Council in February invited tenders for three separate contracts to provide sexual health services in Cornwall, including one similar to the trust’s current contract.

The trust argued that the services to be provided were materially the same as those it provides and therefore cannot be provided for less than about the £2.88m a year.

Cornwall though had said the new contract would be worth only £2.5m a year for seven years, though with £100,000 extra in the first year for digital implementation.

Tender documents were provided to the trust on 25 February and it told the council on 18 March that it would not submit a bid.

On 9 May Cornwall awarded the contract to provider Brook and the trust then issued proceedings which claimed the council had breached the regulations in designing the bid, and sought an order prohibiting Cornwall from entering into the contract with Brook and requiring it to re-start the process.

The trust argued there was a good reason to extend the 30-day time limit for bringing such proceedings because it took time to investigate and consult to validate its conclusions about the contract’s value.

Stuart-Smith J said: “There are two answers to this submission, both of which are fatal to it.

“First, on the claimant's own evidence it had completed its investigations and consultations by 18 March 2019 when it informed the defendant that it would not be submitting a tender. Even if time were extended to start running on 18 March 2019, these proceedings were still brought out of time.

“Second, even when the claimant had finished its investigations on 18 March 2019, it had over a week in which to issue proceedings within the 30-day time limit and no reason has been shown why they were not able to do so within that time.”

He also struck out the trust’s claim that it was entitled to be provided with information about the conduct of the procurement after it decided not to participate.

The trust’s claim would, the judge said, allow anyone who was an ‘economic operator’ to claim they were owed duties under the regulations without it being necessary to show it had demonstrated any interest or taken any part in the procurement.

“All that would be required in order for it to have an actionable claim would be that it could show that it had suffered or risked suffering loss or damage in consequence of a breach of duty,” he said.

“This submission seems to me to be extreme and contrary to the structure of the PCR which, to my mind, provide for the regulation of procurements in relation to those who wish to participate in them.”

Mark Smulian