09 February, 2011
In developments that would please less scrupulous operators such as Tony Soprano the waste management industry seems to be turning nasty, especially in the field of procurement law with a series of cases coming to court involving challenges to public contracts. The results for the private sector have been disappointing to say the least.
In SITA v Greater Manchester Waste Disposal Authority, SITA's challenge failed for being out of time. The point at which the clock for making challenges starts to run has been litigated a lot and is about to be the subject of government proposals.
In Lancashire County Council v EWC the Court of Appeal upheld a contract awarded to SITA when attacked by EWC. There were strong concerns within LCC about the financial stability of EWC and the bidder alleged that they were used as a hidden marking criterion at the contract award stage, which would have been a breach of the Public Contracts Regulations in the classic Lianakis style. However, the Court of Appeal overruled the first judgment and said that there was no evidence that the assessors had not marked objectively and fairly using the proper criteria.
In J Varney & Sons Waste Management Limited v Hertfordshire County Council Varney challenged a contract award alleging a range of breaches, bias in the assessment process and substantial variations in the contract after award. Across 236 paragraphs of judgment, the judge found only one allegation upheld which HCC had admitted, found that it had made no difference to Varney's bid and held for the Council on all points including Varney having made the claim too late.
Amongst other failed arguments, Varney alleged that a common law contract arose because of its tender and that contract had been breached. The Court relied on past cases to say that where the Public Contracts regulations apply they are the law and nothing else is needed. On the alleged unlawful contract variation the court found that the contracts never had been varied because paperwork had not been signed and increased payments might therefore have been recovered.
Intending procurement litigants should take note of the serious criticism of the evidence used in this case. The judge was clear in his comments that statements put together by lawyers to maximise the number of grounds for challenge were a bad idea if the witness whose statement it was meant to be could not back it up in court. The judge refused to allow an unpleaded allegation of misfeasance to be brought in at the hearing and also criticised and dismissed accounting evidence intended to show that some contracts must be loss-making. By contrast, the HCC personnel and methods were largely praised.
Procurement: it's a dirty job but someone has to do it. These cases give some grounds for confidence that where procedures are right and carried out with integrity they will stand up to challenge.