Alstom Transport UK Ltd v London Underground Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Stuart-Smith |
| Judgment Date | 27 June 2017 |
| Neutral Citation | [2017] EWHC 1521 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT/2017-000117 |
| Date | 27 June 2017 |
[2017] EWHC 1521 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Stuart-Smith
Case No: HT/2017-000117
Sarah Hannaford QC and Emma Healiss (instructed by Hogan Lovells International LLP) for the Claimant
Jason Coppel QC and Joseph Barrett (instructed by TfL Legal) for the Defendants
Hearing date: 15 June 2017
Introduction
The Defendants apply to lift an automatic suspension on contract making imposed by Regulation 45G of the Utilities Contracts Regulations 2006. They are responsible for the London tube system in general and the Central Line in particular and are commonly known as LUL and TfL. The Claimant is a company registered in the United Kingdom. It is a substantial enterprise in its own right and is part of the global Alstom business. The Alstom group is a global market leader in terms of size and expertise in the business of train manufacturing. I shall refer to the Claimant and the wider group as Alstom and the Alstom Group respectively.
The present dispute arises out of a procurement for the provision of AC traction motors for the Defendants' fleet of Central Line trains. The outcome of the procurement was that the Defendants decided that Bombardier Transportation (UK) Limited should be the winning bidder, with Alstom coming second. By these proceedings Alstom challenges the validity of the procurement and its outcome; and in this application it opposes the lifting of the automatic suspension.
The evidence available to the Court on this application initially came from Mr Peter Campbell (the Senior Commercial Manager for the Rolling Stock Renewals Department for LUL) whose first witness statement was made on 18 May 2017. A witness statement was also provided on the same day by Mr Peter Fawcett (a Principal Sponsor). Alstom responded by a witness statement from Mr Piers Wood (who is responsible for managing Alstom's Regional and Intercity business) on 1 June 2017. Mr Campbell replied with his third statement, made on 8 June 2017. The evidence was completed by a second statement from Mr Wood and a witness statement from Ms Anne Littlewood (a representative of Alstom's solicitors) on 12 June 2017. Although at one point it was submitted that Alstom had felt constrained about replying to Mr Campbell's 8 June 2017 statement, the evidence it served on 12 June 2017 was presented as a detailed response, making due allowance for the tight timetable imposed on the parties by the Court. Mr Campbell provided a fourth statement on 14 June 2017.
By its evidence and submissions Alstom takes the following main points:
i) It is conceded by the Defendant for the purposes of this application that there is a serious issue to be tried. Alstom goes further and submits that the Court should at this interim stage form the view that its case is strong and that this assessment should be brought into the balance when deciding whether or not to set aside the automatic suspension;
ii) Alstom submits that it is unjust that it should be confined to its remedy in damages and, adopting American Cyanamid language, that damages would not be an adequate remedy because:
a) "The loss of the contract will have a huge impact on the Claimant's centre of expertise in traction technology";
b) "damages would not compensate [Alstom] for the loss of competitive edge that it would suffer if it were to lose the … contract"; and
c) "the Courts have frequently accepted that the calculation of damages in procurement cases can be a difficult and speculative exercise and that damages are not an adequate remedy for claimants …. [Alstom] will suffer, not only the loss of this contract … but the loss of the ability to win future contracts in this field of expertise".
iii) On the other hand, Alstom submits that damages would be an adequate remedy for the Defendants and that it has given a suitable undertaking in damages;
iv) Alstom contrasts the adverse effect that the loss of the contract would have on its business with the limited effect that it submits would be the consequence of delay in proceeding with the intended contract until after the conclusion of these proceedings. It submits that this tends to support the maintenance of the suspension. In support of this submission it asserts that there has been significant delay in the procurement thus far and that a further delay is not disproportionate in the circumstances;
v) Alstom submits that there is a strong public interest in bodies subject to the Regulations being required to carry out complex and significant procurements in a proper and lawful manner. It submits that the Defendants' conduct in this procurement has been characterised by muddle and confusion and that, where such a picture emerges, it would not be right to confine a claimant to its remedy in damages. It also submits that there is a significant public interest in avoiding an outcome where bodies subject to the Regulations are required to pay losing bidders substantial sums in compensation and also pay the winning bidder the contract price;
vi) For these reasons the balance of convenience favours maintaining the suspension.
Alstom's other submissions, written and oral can be seen as developments of the main ones identified above. At this point it is sufficient to record that the Defendants take issue with each aspect of Alstom's submissions.
The Factual Background
The ITT
The ITT stated that the evaluation process "will be conducted in a fair, equal and transparent manner in accordance with UK and EU procurement rules." The evaluation process was broken down into 4 key stages, and the ITT stated that Responses rejected during any of Stages 1, 2 or 3 would not be evaluated further. The stages, for which threshold scores were set by Part 6.5, were:
i) Stage 1 – General Review and Mandatory Requirement;
ii) Stage 2 – Technical Compliance and Maintainability;
iii) Stage 3 – Project Deliverability;
iv) Stage 4 – Commercial Evaluation.
Part 5.6 said:
"Any failure to meet the minimum thresholds described in Part 6.5 shall be treated as a Non-compliance and LUL will apply the process described in Part 5.3
Following the review of any further information submitted by a bidder in response to a request for a bidder to resubmit any aspect of its Response made under Part 6.5, LUL will finalise its scoring.
Any Response that is rejected during Stage 3 shall not be evaluated further."
Part 5.3 is central to the dispute between the parties. It said:
" Qualifications and Non-compliances with ITT
This Part 5.3 describes the process which LUL will follow at Stages 1 to 4 in respect of any matter contained within a Response which constitutes a Qualification, assumption or non-compliance (including without limitation any failure to meet the minimum thresholds set out in Part 6).
LUL reserves the following rights:
• to reject any Response which is identified at any time as failing to satisfy the requirements described below for Stages 1 to 4;
• to reopen any of Stages 1 to 4 at any time if it becomes aware of information that would have (a) led to rejection of a Response during that stage, or (b) led to an adjustment of the score awarded during that stage; and
• to request a bidder to resubmit any aspect of its Response at any time for the purpose of clarifying its offer following any use of the processes set out in Parts 3.8.
Without prejudice to this position, LUL may, at its discretion, revert to bidders in relation to any Qualification, assumption or non-compliance contained within a Response and request the submission of further information.
Further information to be submitted by the bidder will be required to take the form of:
i) withdrawal of the Qualification or correction of the Non-compliance;
ii) provision of clear assurances about the future resolution of the Qualification or non-compliance; and/or
iii) provision of such other information or assurances as LUL may require.
Should the bidder decide to increase its price as a result of any further submission requested by LUL, it shall comply with LUL's instructions with regard to the resubmission of financial and associated parts of its Response.
Bidders are advised that a Response which is rejected at Stage 1, Stage 2 or Stage 3 shall not proceed to the next stage of the evaluation."
Chronology
The essential chronology is as follows:
i) On 28 January 2015 the Defendants advertised the procurement in the OJEU;
ii) On 13 March 2015 there was a Supplier Engagement Event at which background information was provided to potential bidders;
iii) On 1 May 2015 the Pre-qualification Questionnaire ["PQQ"] was issued;
iv) On 1 June 2015 PQQ responses were submitted;
v) On 17 July 2015 the PQQ selection was issued: Alstom and Bombardier were among the potential bidders selected;
vi) On 18 December 2015 the Invitation to Tender ["ITT"] was issued;
vii) On 4 January 2016 a revised ITT was issued with a bid return date of 18 March 2016. After a number of requests from bidders to extend the deadline, on 3 March 2016 LUL extended the bid return date to 8 April 2016;
viii) On 8 April 2016 bids were submitted;
ix) On 19 July 2016 the LUL Evaluation Board endorsed a recommendation to shortlist 3 bidders, including Alstom and Bombardier. The recommendation document recognised that Bombardier had not met the stated scoring thresholds for passing Stage 3 of the procurement but recommended that "in order to maintain tender competition all three bidders are considered to have met the requirements for Stage 3 and have proceeded to the Stage 4 Evaluation". This decision to retain Bombardier in the procurement and to consider it further lies...
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