In March 2020, at the height of the pandemic, the government used the emergency powers under Regulation 32(2)(c) of the Public Contracts Regulations 2015 (the Regulations) to directly award contracts for personal protective equipment (PPE) to three companies (amongst others); PestFix, Clandeboye and Ayanda.
Reports of the government’s use of the “high priority lane” (aka the ‘VIP route') lead to the Good Law Project and EveryDoctor (the Claimants) bringing action against the government challenging the lawfulness of the contract awards in the case of R (Good Law Project and EveryDoctor) v Secretary of State for Health and Social Care. The judgment for this was handed down by the High Court last week.
On the whole, the Court found in favour of the government. It had previously established at an earlier stage that the use of Regulation 32(2)(c) in this situation was in fact lawful, and permission to challenge this was refused. However, the challenge was brought on a number of other issues, including that the Secretary of State had:
- Breached the EU principles of equal treatment and transparency (March 2020 fell within the transition period and the principles still applied) when he used the high priority lane for suppliers referred by government connections, which ultimately led to a failure to ensure competition between suppliers;
- Failed to provide reasoning behind the decisions; and
- Failed to carry out sufficient financial or technical verification of PestFix and Ayanda before awarding the contracts.
The Court dismissed all the claims, except one, that the Claimants had established the operation of the High Priority Lane was in breach of the obligation for equal treatment under the Regulations.
The high priority lane process was mostly compliant in its checking of potential suppliers, and sufficient technical and financial verification had been carried out prior to award to ensure that the award decision. However, offers of contracts that were referred into the High Priority Lane enjoyed a faster consideration through the initial checking process. This meant that they had a better chance of being awarded a contract. This was a breach of the principle of equal treatment.
That being said, the Court acknowledged that due to the merits offered by both PestFix and Ayanda and, amongst other things, their ability to provide high volumes of PPE at a time when they were in urgent demand, it was highly likely that both entities would have been awarded contracts regardless of their route of assessment. Indeed, in deciding against granting the declaratory relief sought by the Claimants, the Court acknowledged that:
"Although operation of the high priority lane was in breach of the obligation of equal treatment ….and therefore unlawful, it is highly likely that the outcome would not be substantially different and the contracts would have been awarded... The contracts in question have been performed (or expired) and it is sufficient that the illegality is marked by this judgment."
This case is one that has and will continue to gain plenty of media attention due to its political nature and its link to the government's wider procurement activities throughout the pandemic. However, aside from that, it has highlighted key considerations for future procurement cases, most notably the continued high bar for challenging irrational decisions, confirming earlier case law on this point. Furthermore, the judgment provided detailed consideration on the application of the requirements for equal treatment and transparency even when using the power to directly award in an emergency under Regulation 32(2)(c).
If you would like to read the full judgment, you can find it here.
Please get in touch with a member of our Procurement team if you have any queries relating to public procurement law.
