Use of High Priority Lane unlawful

Background

The outbreak of the COVID-19 pandemic and its spread in the UK caused unprecedented need for PPE in the NHS, at a time where global demand, disruption to supply chains and increased prices caused worldwide shortages.

To deal with depleting stock, the Cabinet Office published “Procurement Policy Note – Responding to COVID-19: Information Note PPN 01/20” to provide guidance on how to award contracts during the pandemic. One suggestion was to make use of Regulation 32(2)(c) of the Public Contracts Regulations 2015 (‘PCR’) which allows contracting authorities to make a direct award of a contract, without the need for a full procurement process, in certain prescribed circumstances.

A Portal was set up on the Government website, where information was provided on the items required and their specifications. Businesses could make offers to supply goods by completing a questionnaire. This would trigger a process, whereby those making credible offers were allocated a case worker and contacted for further information. Technical assurance and financial due diligence was carried out and contractual terms and pricing were negotiated. The file was then passed to an Accounting Officer for approval.

An alternate route was also established in late March 2020, known as the High Priority Lane. This was reserved for referrals made outside the Portal by MPs, ministers and senior officials. They were provided with a dedicated email address, which they could use to flag offers from their contacts. The suppliers were contacted for further information and passed to the technical assurance team to follow the remainder of the usual procedure. The Government argued the High Priority Lane helped manage the large number of offers made in the Portal and the number of referrals being made by senior officials.

The claim

The Claimants were granted permission to bring the claim on three grounds:

• i) Equal treatment and transparency – that the award of all the contracts was in breach of the principles of equal treatment and transparency pursuant to Regulation 18 of the PCR, thereby making them unlawful. The Claimants’ position was that use of Regulation 32(2)(c) did not permit an award to be made without any steps to distinguish between suitable suppliers. Further, offers referred through the High Priority Lane were given an unfair advantage and prioritised above offers made through the Portal. The criteria for admittance to this route, that the suppliers had contacts with minsters and senior officials, was also against the principles under Regulation 18.
• ii) Failure to give sufficient reasons – despite requests in pre-action correspondence, the Claimants argued that the Government failed to comply with its obligations to provide reasons for its decisions. It was their view that the Government failed to provide sufficient information to enable them to understand the basis of the decision to make the awards and to make a determination on whether to challenge it, and later allow the court to make a determination as to its lawfulness.
• iii) Irrationality – the Claimants argued that the award of the contracts was irrational, on the basis that the Defendant failed to conduct sufficient financial and technical checks on the businesses and their offers, and by their reliance on the High Priority Lane.

Comments

The decision demonstrates that even in urgent situations, any decision to treat one set of bidders more favourably than another, simply due to the connections they had, is likely to be unlawful, given that the aim of the PCR is to ensure fairness and transparency to all potential suppliers.