Public Procurement – Remedy in damages

Woods Building Services v Milton Keynes Council (No. 2) [2015] BLR 591 TCC, Coulson J

Facts

Woods tendered for an £8m single supplier contract to run over 4 years.  In earlier proceedings it was ruled that the successful tenderer's bid had been wrongly "scored", or evaluated, and Woods might have been given the contract if the scoring had been done correctly.  The Council's Decision was set aside and Woods asked the Court for an order that it be awarded the contract or alternatively damages.

Held

The Court would grant damages, but would not order the Council to simply place a contract with the claimant because that was not a remedy provided for in the Public Contracts Regulations.  In theory, mandatory injunction might have been available but would only normally be granted in very exceptional circumstances.  Given that the Council's tender process was fundamentally flawed, granting an award to Woods might be unfair to other tenderers.  In any event damages were an adequate remedy and the damage would be assessed once a new tender process has been gone through.

Comment

Many unsuccessful tenderers have applied to have contracts set aside or re-run; damages are however very often a much more attractive outcome for a disappointed tenderer.  Of course if Woods won the new tender process then there would be little or no need to make an order in damages.  Hypothetically, if and when the damages came to be negotiated between the parties, the reference point would be the loss of profit which Woods could properly expect to have achieved from that contract.  The Court made it plain that it would be necessary for the claimant to prove any loss of profit and/or any claim for wasted costs upon the balance of proof and subject to closer examination of evidence.

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