4 Eur. L. Rep. 1 (2000)

handle is hein.journals/eurlawreo4 and id is 1 raw text is: [2000] EuLR

High Court of Justice, Queen's Bench Division
Smedley J
19 February 1999
B Public procurement - Award of public services contract - Whether Regulations applic-
able - Whether improper criteria taken into account - Whether impermissible varia-
tions to contract - Whether plaintiffs claim statute-barred - Whether Directive
applicable to award of in-house contract - Council Directive 92/50/EEC- Public
Services Contracts Regulations 1993
Council Directive 92/50/EEC concerning the award of public services contracts (the
Directive) was to be implemented by the United Kingdom by 1 July 1993. The actual
implementation was effected by the Public Services Contracts Regulations 1993 (the
Regulations), which came into force on 13 January 1994.
D     The defendant sent an official notice to the Official Journal, which was published on
10 July 1993, inviting tenders for the provision of internal audit services which at that
time were being provided for by an in-house team. The plaintiff wrote to the defendant
indicating its interest in the proposed contract and was invited to tender, along with
other interested parties, including the defendant's in-house team. The scheme was to
follow the restricted procedure set out in the Directive.
E     Following meetings between the defendant and the various tenderers, the plaintiff
submitted its first tender. Following discussions with the defendant, the tenderers were
all given the opportunity to submit revised tenders, correcting arithmetical errors and
clarifying ambiguities, at which stage the plaintiff had a substantial advantage over
the other three tenderers if price was to be the determining factor.
On 20 January 1994 the tenderers were asked to submit revised tenders on the basis
that the Transfer of Undertakings (Protection of Employment) Regulations 1981
F   applied so that they would have to take over the defendant's existing staff. Around the
end of January and early February, the defendant discovered that it might have prob-
lems contracting out the area of housing benefit fraud investigations. On 3 February
1994 it wrote to the plaintiff and to the in-house team, inviting both to re-tender, delet-
ing housing benefit investigation work and, in the case of the plaintiff, to submit ten-
ders both on the basis that the Transfer of Undertakings (Protection of Employment)
G   Regulations 1981 applied and did not apply. The letter did not invite the parties to
submit revised prices for other elements of the work covered by the specification.
When the request was made for housing benefit fraud investigations to be taken out
of the specification and the in-house team invited to submit a revised tender, it was
apparent to the in-house team that its bid was not, at that stage, the lowest bid.
On 8 February 1994 the plaintiff submitted its final revised tender and the in-house
team submitted a second alternative tender excluding housing benefit fraud investiga-
H tions. The figures showed a dramatic shift in the order of tender prices, the differential
between the parties changing from £510,691 to £7,820. A number of the price changes
made by the in-house team did not relate to the exclusion of housing benefit fraud

C 2000 Hart Publishing Ltd.
CCC 1091-3297/00/010001-24

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