Introduction

The case of AMEY OW Limited (the pursuer) versus North Lanarkshire Council (the defender) pertains to a commercial dispute over the awarding of a significant public contract for "Roads and Infrastructure Maintenance and Improvement Services." The contract was awarded to Hochtief PPP Solutions GmbH following a competitive procurement process with negotiation. Amey OW Limited challenged this decision, alleging breaches of several provisions under the Public Contracts (Scotland) Regulations 2015, including issues related to transparency, assessment criteria, and procedural fairness. The case was adjudicated in the Scottish Court of Session on June 28, 2024.

Summary of the Judgment

The Scottish Court of Session, presided over by Lord Sandison, examined the merits of Amey OW Limited's claims against North Lanarkshire Council. Amey OW alleged five primary breaches:

• Transparency Failures: The council allegedly failed to engage transparently with Amey's concerns and did not provide requisite information regarding the tender evaluation.
• Improper Use of Evaluation Criteria: The council used a "Should Cost Model" in assessing bids without informing the tenderers during the final submission stage.
• Abnormally Low Bid: Amey contended that Hochtief's bid was abnormally low and should have been excluded from consideration.
• Non-Compliance of Successful Bidder: Hochtief's bid was allegedly non-compliant with the demonstrated capability requirements.
• Scoring Errors: Errors in scoring Amey's bid concerning the acceptance of material terms of the draft contract.

Analysis

Precedents Cited

The judgment extensively referenced several key cases to substantiate its reasoning:

• Shetland Line (1984) Limited v Scottish Ministers [2012] CSOH 99: Emphasizing the need to balance the strength of the parties' cases against the public interest and adequacy of remedies.
• American Cyanamid Co v Ethicon Ltd [1975] AC 396: Providing foundational principles on the balance of convenience in interim relief applications.
• Elekta Limited v The Common Services Agency 2011 SLT 815 and Clinical Solutions International Limited v NHS 24 [2012] CSOH 10: Discussing the interplay between serious issues to be tried and the adequacy of damages.
• Medequip Assistive Technology Ltd v Kensington and Chelsea [2022] EWHC 3293 (TCC): Addressing the complexities of reputational loss claims in procurement disputes.
• Woods Building Services v Milton Keynes Council [2015] EWHC 2011 (TCC): Highlighting the necessity for clear and precise award criteria in procurement processes.

Legal Reasoning

The court's legal reasoning centered on the application of the Public Contracts (Scotland) Regulations 2015, particularly focusing on Regulation 90(2), which governs the court's discretion in lifting suspensions on contract awards during ongoing disputes. The key aspects of the reasoning include:

• Prima Facie Case: The court assessed whether Amey OW presented a sufficient initial case. It found that while some allegations lacked concrete evidence, others did not demonstrate a clear breach of regulations.
• Use of Should Cost Model: The "Should Cost Model" was scrutinized. The court determined that its use was within the statutory obligations of the council and aligned with Cabinet Office guidelines, thereby not constituting an undisclosed evaluation criterion.
• Balance of Convenience: Central to the judgment was the weighing of potential harms and benefits of lifting the suspension. The court considered public interest factors, such as the timely maintenance of infrastructure, against the alleged procedural breaches.
• Adequacy of Damages: The court examined whether monetary compensation would suffice as a remedy for Amey OW's alleged losses. It concluded that damages would be an adequate remedy, particularly since reputational harm was not deemed sufficiently substantive to warrant the lifting of the suspension.

Impact

This judgment has significant implications for future public procurement processes in Scotland:

• Emphasis on Procedural Compliance: Public authorities are reinforced to adhere strictly to procedural regulations, especially concerning transparency and the establishment of clear evaluation criteria.
• Use of Evaluation Models: The acceptance of tools like the "Should Cost Model" within statutory duties provides councils with validated methodologies for assessing bids, provided they remain within regulatory frameworks.
• Interim Relief Standards: The balance of convenience analysis, as applied under Regulation 90(2), offers a clearer precedent on how courts weigh public interest and potential remedies in procurement disputes.
• Adequacy of Damages: Courts may continue to view monetary compensation as a sufficient remedy in similar disputes unless substantial, non-monetary harms are demonstrably proven.

Complex Concepts Simplified

Should Cost Model

A Should Cost Model is a financial tool used by procuring authorities to estimate what a project or service "should" cost over its entire lifecycle. It assists in evaluating the robustness and realism of bids by analyzing key cost drivers. In this case, the council employed the model to ensure best value but made its application compliant with existing guidelines by limiting its use to financial implications rather than as a primary evaluation criterion.

Balance of Convenience

Balance of Convenience refers to the judicial assessment of which party would suffer greater harm from granting or denying interim relief. In procurement disputes, this involves weighing the public interest and operational continuity against the procedural rights and potential losses of the competing tenderers.

Pleads and Prima Facie Case

A prima facie case is a preliminary demonstration that, based on the initial evidence, a party has a valid claim warranting further investigation. Pleadings are the formal written statements of each party's claims or defenses. In this judgment, Amey OW's pleadings outlined their grievances, but the court found that not all claims presented a strong enough initial case to override the procedural suspension.

Conclusion

The judgment in AMEY OW Ltd v North Lanarkshire Council [2024] ScotCS CSOH_66 underscores the judiciary's commitment to upholding transparent and regulated procurement processes within public sector contracts. By affirming the permissibility of tools like the "Should Cost Model" when used within statutory duties, and by emphasizing the adequacy of damages as a remedy, the court has delineated clear boundaries for future disputes. This decision serves as a pivotal reference for both public authorities in structuring competitive tenders and for private entities in understanding their rights and obligations within such frameworks. Ultimately, the emphasis on procedural integrity and the careful balancing of public interest needs chart a course for fair and efficient public procurement practices in Scotland.