Turning Point Scotland against Glasgow City Council (Court of Session)

Factual and Procedural Background

The Plaintiff, Company A, initiated a commercial action seeking reduction under Regulation 90(1)(b)(i) of the Public Contracts (Scotland) Regulations 2015 of the Defendant, The City Council's decision to award certain lots in a public contract to Company B instead of to it. The contract concerned the WAYfinder Service, a programme aimed at assisting individuals at risk of homelessness or experiencing homelessness to secure housing and support. The contract was divided into six lots, each with defined services and estimated values, and was to last four years with an optional two-year extension, totaling approximately £73.8 million.

The Invitation to Tender (ITT) required bidders for Lots 2, 3, and 4 to also bid for Lot 5, which was linked to those lots, and limited bidders to being awarded only one of Lots 1 to 4. The City Council reserved discretion to amalgamate lots or award more than one lot to a provider to avoid unfilled lots. The Plaintiff submitted compliant bids for Lot 3 linked with Lot 5, Lot 4 linked with Lot 5, and Lot 6, ranking Lot 4 linked with Lot 5 as its preferred lot.

On 6 February 2025, the Council awarded Lot 3 linked with Lot 5 to the Plaintiff and Lot 4 linked with Lot 5 to Company B, despite the Plaintiff having a higher combined score for Lot 4 linked with Lot 5. The Plaintiff was also included as an approved supplier for Lot 6. The Plaintiff was the only compliant bidder for Lot 3 linked with Lot 5. The Plaintiff challenged the Council's decision to award Lot 4 linked with Lot 5 to Company B, alleging unlawful exercise of discretion and breach of procurement regulations. The action was raised on 7 March 2025.

Legal Issues Presented

1. Whether the Defendant lawfully exercised its discretion under Section 1.2 of the ITT and the Public Contracts (Scotland) Regulations 2015 in awarding Lot 4 linked with Lot 5 to Company B instead of the Plaintiff, who had the highest combined score for that lot.
2. Whether the Defendant’s limit on awarding only one of Lots 1 to 4 to a single bidder, and its application of that rule, complied with the principles of equal treatment, transparency, and non-discrimination under the 2015 Regulations.
3. Whether the Plaintiff’s challenge to the award decision was time-barred as a challenge to the terms of the ITT or was a valid challenge to the exercise of discretion in the award decision.

Arguments of the Parties

Plaintiff's Arguments

• The Council's decision to award Lot 4 linked with Lot 5 to Company B was an unlawful exercise of discretion under the ITT and breached Regulations 19(1), 67(1), 74, and 76 of the 2015 Regulations.
• The Council owed a duty to the Plaintiff as an economic operator and breached this duty by not awarding the contract to the most economically advantageous tenderer for Lot 4 linked with Lot 5.
• The discretion conferred by Section 1.2 of the ITT had to be exercised lawfully, transparently, and in accordance with equal treatment principles; the Council failed to do so by awarding the lot to a lower scoring bidder.
• The Plaintiff accepted the lawfulness of the ITT terms but challenged the Council’s application of the discretion, which was not time-barred.
• The Council’s approach discriminated against the Plaintiff by disqualifying it from Lot 4 linked with Lot 5 solely because it was awarded Lot 3 linked with Lot 5, contrary to equal treatment and transparency obligations.

Defendant's Arguments

• The Council acted in accordance with the direct and natural meaning of Section 1.2 of the ITT, which limited bidders to being awarded only one of Lots 1 to 4, with Lots 2, 3, and 4 tied to Lot 5.
• The Council’s decision aligned with what a reasonably well informed and normally diligent ("RWIND") tenderer would have understood and expected.
• The Council acted transparently and treated bidders equally by awarding Lot 3 linked with Lot 5 to the Plaintiff and Lot 4 linked with Lot 5 to Company B, the second highest scoring bidder.
• The Plaintiff’s challenge to the award of Lot 4 linked with Lot 5 was effectively a challenge to the terms of Section 1.2 of the ITT, which was time-barred.
• The procurement fell under the Light Touch Regime and Schedule 3 to the 2015 Regulations, granting the Council discretion in procedure design, so long as principles of transparency and equal treatment were met.
• The Council’s approach was aimed at reducing barriers to new or smaller providers and ensuring market capacity and security, which justified limiting the number of lots awarded to a single provider.
• The Council had no discretion to award both Lot 3 and Lot 4 linked with Lot 5 to the Plaintiff without risking unfilled lots, and its application of the ITT and Regulations was lawful and proportionate.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the procurement exercise under the Light Touch Regime of Schedule 3 to the 2015 Regulations, with Section 7 of Part 2 providing the primary legal framework. It emphasised that the contracting authority has discretion to design procedures subject only to transparency and equal treatment principles.

The court found that the ITT and Contract Notice clearly limited bidders to being awarded only one of Lots 1 to 4, with Lots 2, 3, and 4 tied to Lot 5, and allowed the Council discretion to amalgamate lots or award multiple lots to a bidder only to avoid unfilled lots. This was consistent with Regulation 47 and other relevant provisions.

The court rejected the Plaintiff’s argument that the Council had an absolute discretion to award multiple lots to the highest scoring bidder. Instead, the discretion had to be exercised lawfully and proportionately, respecting equal treatment and transparency.

It was held that the Council lawfully awarded Lot 3 linked with Lot 5 to the Plaintiff, as it was the only compliant bidder for that lot, and awarded Lot 4 linked with Lot 5 to Company B, the second highest scoring bidder, because the Plaintiff could only be awarded one lot within Lots 1 to 4. This was consistent with the ITT and the Council’s legitimate policy objective to ensure market capacity and reduce barriers to new or smaller providers.

The court found no breach of equal treatment or transparency in the Council’s approach, noting that had the positions been reversed, Company B would have been treated similarly. The Plaintiff’s challenge to the award decision was understood as a challenge to the terms of the ITT, which was time-barred as it was raised more than 30 days after publication of the ITT.

The court also noted that while the tender documentation might have lacked some clarity on certain procedural points, the Plaintiff did not pursue an argument based on lack of transparency, and the minimum procedural requirements were met.

Holding and Implications

The court DISMISSED the Plaintiff’s action and upheld the Defendant’s decision to award Lot 4 linked with Lot 5 to Company B.

The direct effect is that the Council’s award decision stands and the Plaintiff is not entitled to the contract for Lot 4 linked with Lot 5 despite its higher score. No new precedent was set, and the decision confirms the lawful exercise of discretion by a contracting authority to limit awards to a single bidder within specified lots under the 2015 Regulations, provided transparency and equal treatment principles are respected.