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Axiom Leads on Challenge to Flagship IT Procurement

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Axiom Leads on Challenge to Flagship IT Procurement

06 March 2014

Lord Malcolm has today issued his opinion in BT plc v Common Services Agency [2014] CSOH 44. Members of Axiom Advocates were instructed for both parties in a dispute which raised a number of novel issues in procurement law.

The case concerned a challenge by BT plc to a major procuremen t exercise for a “Scottish Wide Area Network” (“SWAN”). The objective of SWAN is to create a single, holistic telecommunications service available for the use of any, and potentially all, public service organisations within Scotland. SWAN aims to facilitate greater infrastructure sharing, collaboration and collaborative procurement of information and communications technology networking and services capability. The estimated value of the purchases for the entire duration of the framework agreement is in the range of between £100,000,000 and £325,000,000.

The summons was served in December 2013.  Lord Malcolm set down an expedited timetable including an early diet of debate in January to attempt to resolve the issues that arise in the case.

At the heart of the dispute is the drafting of the output based specification (OBS), which set out the specific requirements for the SWAN services. The OBS contains percentage weightings for the various aspects of the bids. BT complained that until a post decision de-briefing on 15 November 2013, it was unaware that a failure to satisfy the basics on one requirement in the OBS would so limit the maximum possible score.

Following debate, Lord Malcolm accepted that there was a breach of the transparency requirement in regulation 4(3) of the Public Contracts (Scotland) Regulations 2012 (“2012 Regulations”).

Lord Malcolm rejected BT’s other grounds of challenge, including challenges directed to manifest error in marking and adequacy of reasons. The CSA had sought to argue that the pre-action notification requirements had not been complied with. This argument was rejected by the Court.

CSA enrolled a motion seeking an order in terms of regulation 47(9)(b) of the 2012 Regulations to allow the contract to be concluded, thus limiting BT’s remedy to a claim in damages.
Lord Malcolm accepted the CSA’s argument that the contract should be permitted to be awarded without delay and lifted the automatic prohibition on the contract award. Lord Malcolm held that in the absence of a clear demonstration that the flaw in the process altered the result, and given the adverse consequences of a re-run, it would not be proportionate to set the decision aside.
Lord Malcolm recognised the strong public interest in a fair and transparent procedure being followed in order to identify the most economically advantageous bid.  However, balancing the public interest in allowing the contract to proceed and the private harm to BT in being deprived of notice of the full details of the scoring methodology to be deployed, Lord Malcolm concluded that damages would be an adequate, proportionate, and effective remedial route.

Counsel from Axiom Advocates were instructed on both sides of the dispute. Ruth Crawford QC and John MacGregor acted for BT plc.  Roddy Dunlop QC and Euan Duthie acted for the CSA.