Another exciting summer for procurement watchers!
The High Court has recently handed down a judgment in a decision relating to a declaration of ineffectiveness for a development project ¹.
The well-respected Sir Robert Akenhead in the Technology & Construction Court decided in favour of the local authority, which had procured a development partner for a leisure and retail development project in Basingstoke.
The complaint arose because of the nature of the procurement exercise. In a novel change from the typical reported case, and unlike other development projects that we have seen, the development opportunity was advertised in the Official Journal of the EU, under a negotiated procedure in order to provide a degree of flexibility. The opportunity was expressed in broad terms for the procurement of a development partner for the site at Basingstoke Leisure Park. However, after appointment and negotiation, it became apparent that the scale and scope of the project had changed.
This is where the owners of a competing town centre shopping centre challenged the procurement process. Instead of a leisure centre with ancillary retail facilities the Council had, in effect, appointed a developer for a retail park with an ancillary leisure centre.
In deciding that the challengers did not have a remedy to quash the development agreement under the Procurement Regulations, the court adopted a pragmatic approach. It favoured the local authority’s public interest in ensuring that development takes place. The court applied a “mechanistic test”: was a valid OJEU Notice published in respect of the project? This test is a broad-brush one and the court was not prepared to adopt a “semantic debate” as to whether the scope of the development agreement was within the anticipated scope of the original OJEU Notice.
What is clear from the decision is:
- The courts will accept some degree of wriggle-room on the drafting of an OJEU Notice: it does not have to be perfectly precise but needs to provide only a “reasonably close relationship” to the finally agreed contract.
- It appears that the court was swayed by the fact that the challengers were not losing bidders, and were not, in fact, bidders at all, nor would have been interested in bidding for the opportunity even if re-tendered. In that case, the court was clearly not interested in applying a draconian remedy under procurement law to achieve a remedy that it might not be able to obtain under planning law: to block a potential competitor.