Suspension lifted on trains contract

Posted: 12th November 2018

Underground signWhen the outcomes of public contract tendering exercises are challenged, the award of contracts is automatically suspended in order to hold the ring.

As a High Court case concerning a multi-billion-pound railway contract showed, deciding whether such suspensions should be lifted involves a delicate balancing exercise.

A company successfully bid for the contract to manufacture, provide and maintain a large number of London Underground trains over a 40-year period.

The contract had a potential value of £2.5 billion. The unsuccessful bidders were three other companies, two of whom had formed a joint venture to compete for the contract.

The unsuccessful bidders had launched proceedings, challenging the result on the basis that the tendering process was fundamentally flawed. It was alleged, amongst other things, that there were manifest errors in the way the rival bids were marked. In those circumstances, the award of the contract was automatically suspended by operation of the Utilities Contracts Regulations 2006.

In arguing that the suspension should remain in place pending a full trial of the action, the unsuccessful bidders pointed out that the contract represented a once-in-a-generation opportunity. The outcome of the tendering process was said to pose a risk both to jobs and the unsuccessful bidders’ global reputations. The Court found that money alone would probably not be enough to compensate them if their criticisms of the tendering process were to be substantiated.

However, in upholding London Underground’s application to lift the suspension, the Court noted that the action was unlikely to be tried for more than a year and that such a lengthy delay would be contrary to the public interest. The trains that were to be replaced under the contract were well past their 40-year design life and the new rolling stock would deliver substantial benefits to millions of users of the underground network and the regional economy.