BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Strand, London, WC2A 2LL
B e f o r e :
| MLS (OVERSEAS) LIMITED
- and –
|THE SECRETARY OF STATE FOR DEFENCE
- and –
|SCA SHIPPING CONSULTANTS ASSOCIATED LIMITED
Alan Bates and Michael Armitage (instructed by the Treasury Solicitor) for the Defendant
Joseph Barrett (instructed by Preiskel & Co LLP) for the Interested Party
Application dealt with on paper
Crown Copyright ©
Mrs Justice O'Farrell:
i) a declaration that the procurement was carried out unlawfully;
ii) an order setting aside the decision to award the contract to the interested party ("SCA"); and
iii) an order requiring the MoD to amend its award decision to award the contract to MLS.
i) submissions of MLS dated 27 March 2018;
ii) submissions of the MoD dated 10 April 2018;
iii) submissions of SCA dated 16 April 2018;
iv) supplementary submissions of the MoD dated 18 April 2018;
v) supplementary submissions of MLS dated 23 April 2018;
vi) reply submissions of SCA dated 25 April 2018;
vii) further submissions by email from MLS dated 25 April 2018;
viii) further submissions by email from SCA dated 26 April 2018.
Position of the parties
Statutory Time Bar
" … It is clear that, as soon as the Briefing Document was issued without identifying the criteria by which the most economically advantageous bid was to be assessed, there was a breach of [the regulations] … Moreover, it was a breach in consequence of which Jobsin, and indeed all other tenderers too, were then and there at risk of suffering loss and damage. It is true that it was no more than a risk at that stage, but that was enough to complete the cause of action. Without knowing what the criteria were, the bidders were to some extent having to compose their tenders in the dark. That feature of the tender process inevitably carried with it the seeds of potential unfairness and the possibility that it would damage to prospects of a successful tender.
" … it is sufficient to found a claim for breach of the Regulations that there has been a breach and that the service provider may suffer damage as a result of the breach. It is implicit in this that the right of action may and usually will arise before the tender process has been completed."
i) MLS's case, as pleaded and argued at trial, was that the MoD was not entitled to reject its tender based on a "fail" score against Question 6.3 because (a) the MoD determined that MLS's tender was the most economically advantageous tender ("MEAT") using the criteria set out in the ITT; and (b) the ITT did not identify a "pass" against Question 6.3 as necessary to render the tender compliant.
ii) It was common ground that the ITT did not state expressly that a "pass" against Question 6.3 was a threshold criterion as part of the MEAT determination.
iii) It was also common ground that the ITT did not state expressly that a "pass" on Question 6.3 was required to render the tender compliant.
iv) The MoD clearly articulated its case that any challenge by MLS to the lawfulness of the ITT in respect of a defect that was identifiable on the face of that document would have had to have been brought within 30 days (pursuant to Regulation 53(2)). Therefore, any allegation of a breach of transparency in the procurement process by reason of a lacuna in the ITT, in terms of its failure to state expressly the consequences of a "fail" score, would be out of time.
v) The MoD's defence to the pleaded challenge was that it was entitled to reject the MLS tender based on its "fail" score against Question 6.3 because, although the ITT did not expressly state that the consequence of a "fail" score would be mandatory or discretionary disqualification, such result could be discerned from the ITT on an objective interpretation i.e. from the perspective of the hypothetical reasonable and well-informed and normally diligent ("RWIND") tenderer.
vi) The issue for the Court was whether, on a proper interpretation of the ITT, it would have been apparent to the RWIND tenderer that the consequence of a "fail" score against Question 6.3 would be mandatory or discretionary disqualification.
vii) The Court rejected the MoD's case that the consequences of a "fail" score against Question 6.3 were implicitly clear to a RWIND tenderer. The ITT did not, expressly or implicitly, include a "pass" on Question 6.3 as part of the MEAT threshold criteria or as a minimum threshold for a compliant tender.
"A breach of the duty owed in accordance with [the 2011 Regulations] is actionable by any economic operator which, in consequence, suffers, or risks suffering, loss or damage."
" … I consider that the court has a discretion as to the appropriate remedy. In a given case, in exercising that discretion, the court must pay regard to the need for the Regulations to be applied and to the availability for that purpose of the remedy to set aside the relevant action or decision, as well as the availability of damages. I do not consider that there is a presumption in favour of one remedy but rather the matter is a question of the exercise of discretion based on the facts and circumstances of the particular case. There is no doubt that an important remedy is injunctive relief in support of the Regulations but equally the availability of damages must be taken into account.
 In this case I have to balance the public interest in [the defendant] proceeding with the award of the contract and the private interest to [the claimant] of the harm of not having the chance to be included in the [next] stage of the tender.
 The remedy must be proportionate. There will obviously be cases at one end of the scale where the impact of the breach of the Regulations is so serious or obvious that it can only be met by setting aside a decision or action. At the other end of the scale there will be cases where the impact is less serious or obvious where damages will deal adequately with the breach. In between there will be many cases where the court must perform a balancing exercise of the various interests in deciding on the appropriate remedy."
" … Regulation 47I of the Public Contracts Regulations 2006, which sets out the remedies available to the successful claimant where the underlying contract has not been entered into, provides three possible options, including the setting aside of the decision and amending the record, both of which I have ordered. The Regulation does not identify as a remedy the ordering of the contracting authority to enter into a contract with the successful claimant.
 Of course, Regulation 47I makes plain that it "does not prejudice any other powers of the Court". Thus, in principle it might be open to the Court to order a mandatory injunction requiring the Council to enter into a contract with Woods. But it is trite law that a mandatory injunction which would here require the Council to enter into a contract which would last for many years will only rarely be granted. This is for the four reasons set out by Lord Hoffmann in Co-Operative Insurance Society Ltd v Argyll Stores Holdings Ltd  AC 1: the need for constant supervision, the expense of enforcement, the need for precision and the unjust enrichment of the claimant…
 There are related considerations. A mandatory injunction will never be granted to require an employee to carry out work under his contract of employment (see Warren v Mendy  3 All ER 103); or to require an employer to employ someone in whom he no longer placed his trust and confidence (see Page One Records Ltd v Britton  1 WLR 157). It will not usually be granted to restrain an employer from terminating an employee's contract (see Chappell v Times Newspapers  1 WLR 482). Each of these propositions could be said to be at least potentially relevant to the situation in which these parties currently find themselves.
 Thus, by reference to the authorities dealing with mandatory injunctions, I conclude that requiring A to contract with B, in respect of a contract which might last for years, would be an exceptional order for the court to make… Whilst I do not suggest that a mandatory injunction of the type which they seek would never be granted in a procurement case, I am satisfied that it would only be granted in exceptional circumstances…"