DHL Supply Chain Ltd v Secretary of State for Health and Social Care
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell |
| Judgment Date | 17 August 2018 |
| Neutral Citation | [2018] EWHC 2213 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2018-000185 |
| Date | 17 August 2018 |
[2018] EWHC 2213 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice O'Farrell
Case No: HT-2018-000185
and
Richard Leiper QC and Joseph Barrett (instructed by Dentons UK and Middle East LLP) for the Claimant
Sarah Hannaford QC and Ewan West (instructed by Mills & Reeve LLP) for the Defendant
Fionnuala McCredie QC (instructed by Macfarlanes LLP) for the Interested Party
Hearing date: 7 th August 2018
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
There are two applications before the Court:
i) an application by the Claimant (“DHL”) for summary judgement; and
ii) an application by the Defendant (“DHSC”), supported by the Interested Party (“Unipart”), for the lifting of the automatic suspension which arose on issue of the claim and which prevents DHSC from entering into a contract with the successful tenderer, Unipart.
Background
These proceedings concern a procurement exercise conducted by DHSC under the Public Contracts Regulations 2015 (as amended) (“the Regulations”), in respect of a contract for the provision of logistics services for the NHS and social care services with a value of £730 million.
Since 2006, DHL has provided NHS supply chain services under the Master Services Agreement (“the MSA”). These services included the procurement of all medical devices and hospital consumables (excluding medicines), associated IT, logistics and transactional services. The initial contract duration was 10 years, with an option to extend for a further period of up to 5 years. In 2015, the parties agreed to extend the MSA until 30 September 2018. On 28 March 2018, DHSC notified DHL that various elements of the MSA would be extended for a further period, including an extension to the logistics services, which expires on 28 February 2019.
The procurement exercise, the subject of these proceedings, is part of a reorganisation of the NHS supply chain to form the Future Operating Model (“the FOM”). Under the FOM, the NHS supply chain is broken down into a number of different components, comprising 11 separate contracts for the procurement of medical devices and hospital consumables (other than medicines) (“the Category Towers”), a single IT contract and a single logistics contract. Those contracts will be overseen by Supply Chain Coordination Limited (“SCCL”), a company wholly owned by the Secretary of State, which will also provide all transactional services. It is anticipated that the FOM will achieve value for money for the NHS, release savings to be used in frontline services, increase buying power, improve management and efficiency, drive innovation and secure better pricing through competition.
The Category Towers contracts and the IT contract have been awarded. The only outstanding contract is the logistics contract that is the subject of these proceedings. The planned implementation date for all component parts of the FOM is 31 March 2019.
The procurement exercise
On about 29 August 2017 the procurement for the logistics services was published in the Official Journal of the European Union (“the OJEU”), using the open procedure under the Regulations. The notice stated that the contract duration would be 60 months with a value of £730 million. The services were described as:
i) management of existing logistics services, including transport, inventory management and site facilities;
ii) provision of inbound logistics and inter-depot trunking services;
iii) support for expansion of logistics services to meet projected increased demand;
iv) provision for home and community delivery services for continence products (and potentially other products), on behalf of the NHS, to residential homes, care homes, domestic premises and any NHS funded providers of community health care services.
The invitation to tender (“ITT”) documents stated that the scope of the services comprised (i) core logistics services and (ii) home delivery service (“HDS”) logistics services. The core logistics services were described as warehousing, transport, inventory management, operational finance, customer services, internal audit and inbound logistics and transshipment. The HDS logistics services were described as warehousing, transport and customer services.
The HDS transport services specification was contained in Schedule 2 of the ITT documents and included the following:
“The Logistics Service Provider must ensure that a sufficient number of appropriately qualified drivers are available to meet the delivery obligations for the HDS.
a) All drivers undertaking deliveries to a Service User's home must have an Enhanced Disclosure and Barring Service (DBS) clearance.
b) All drivers undertaking deliveries to a Service User's home must be insured to cross a Service User's threshold and access their home.
HDS deliveries can be in two types:
a) Individual for Service User's own home
b) Bulk for residential care homes or nursing homes.
Drivers may be required to deliver individual packages across the threshold and in some cases to break the Products into storage receptacles.
Drivers will not be required to unpack bulk deliveries at locations such as care homes…”
Service User was defined for the purpose of Schedule 2 as:
“an individual who is resident in a nursing home, residential care home or their own home and receives Products delivered to them by the HDS.”
Evaluation guidance was set out at attachment 4 to the ITT. The evaluation process included administrative compliance (Gate A), legal and commercial compliance (Gate B) and suitability assessment (Gate C). The scoring methodology stated that the suitability assessment would be carried out using the responses to Section 6, Attachment 5 – Selection Questionnaire. The scoring scheme provided for a score of 0 to 3 but a score of 2 or below would constitute a fail and disqualify the bidder from further stages of the procurement.
The selection questionnaire at section 6 included SQ 6.1: evidence of relevant contract experience, SQ 6.2: evidence of any sub-contractor's experience, SQ 6.4: experience in managing customer services for the Core Logistics Service, SQ 6.5: customer services for the HDS, SQ 6.6: project management experience and SQ 6.7: inventory management experience.
SQ 6.9 stated as follows:
| EVALUATION INTENTION | Seeks to establish that the Potential Provider has experience of providing a Logistics Service within a Health or Social Care Environment in line with the Authority's requirements. |
| SUBJECT | Experience of providing Logistics Service within Health or Social Care Environment |
| QUESTION | The Health and Social Care Environment presents unique challenges and considerations to a logistics service. Specific product and Customer requirements often require adjustments in storage and delivery practices, for example. For the HDS, it can include direct contact with Service Users in a domestic setting. Potential Providers are to describe where they have provided logistics services within this environment, and where ‘across the threshold’ delivery was a key component of the service and stakeholder experience. |
| RESPONSE REQUIREMENT | The Potential Provider response should demonstrate that it has experience of managing a service in the Health and Social Care Environment of similar size, complexity and scope… Additionally the response should demonstrate that the Potential Provider has experience in delivering an ‘across the threshold service’ irrespective of sector. Particular emphasis will be placed on the: — Understanding of how the unique challenges of operating a logistics service in the Health and Social Care Environment can impact on Service User health and well-being. — Evidence, regulatory compliance and experience around interacting with Service Users. |
The glossary forming part of the ITT defined ‘Health and Social Care Environment’ as:
“a complex system in which health and social services and care are provided to Service Users.”
‘Service User’ was defined in the glossary as:
“an individual in receipt of services from an NHS England body or under an NHS England managed contract.”
On 6 October 2017 DHL submitted a tender in respect of the logistics contract.
By letter dated 4 June 2018 DHSC notified DHL that it had been unsuccessful in the procurement and that the successful tenderer was Unipart. The award of the contract was based on the most economically advantageous tender (“MEAT”), evaluated on a quality to price ratio of 60:40 respectively. The scores of DHL and Unipart were as follows:
Proceedings
| BIDDER | QUALITY SCORE (60%) | PRICE SCORE (40%) | FINAL MEAT SCORE |
| DHL | 40.92% | 14.26% | 55.18% |
| Unipart | 43.32% | 25.74% | 69.06% |
On 26 June 2018 DHL issued proceedings seeking to challenge the procurement on the ground that DHSC conducted the procurement in an unlawful manner contrary to the Regulations. The Particulars of Claim were served on 2 July 2018 and amended on 13 July 2018. The relevant breach is pleaded at paragraphs 36 and 37 of the Amended Particulars of Claim:
“[36] The defendant purported to evaluate the Unipart response to SQ 6.9 as meeting the scoring criteria required to be awarded a score of 3. The Defendant has not identified any proper basis on which its decision in respect of the Unipart response to SQ 6.9 can be justified. It is averred that in purporting to award the Unipart response...
To continue reading
Request your trial
-
Bombardier Transportation UK Ltd v London Underground Ltd
...NATS (above) at [84]–[85]; DWF (above) at [52]; Openview (above) at [33]–[40]; DHL v Secretary of State for Health and Social Care [2018] EWHC 2213 at [45] & 59 This procurement is distinctively prestigious because of its size, location and value. Success in such a competition would enhance......
-
Vodafone Ltd v Secretary of State for Foreign, Commonwealth and Development Affairs
...Limited v Eurostar International Limited [2010] EWHC 2747 (Ch), per Vos J, as he then was, at [129]); DHL Supply Chain Limited v Secretary of State for Health and Social Care [2018] EWHC 2213 (TCC) per O'Farrell J at [39]–[48]); Bombardier Transportation UK Limited v London Underground Li......
-
Word Perfect Translation Services Ltd v The Minister for Public Expenditure and Reform
...loss for which damages would be an inadequate remedy and referred in that context to another English case, DHL Supply Chain Limited v. Secretary of State for Health and Social Care [2018] EWHC 2213 (TCC) (“ DHL”); (b) Loss of turnover: The judge referred to the evidence and stated that he ......
-
Eircom UK LTD v Department for Finance and British Telecommunications PLC
...injunction to restrain breaches of competition law.) 8 In DHL Supply Chain Ltd v Secretary of State for Health and Social Care [2018] EWHC 2213 (TCC) O’Farrell J set out the approach which the court should adopt as follows: “The Court must consider the following issues: (i) Is there a serio......
-
Procurement
...how the instant tenderer actually understood those criteria: see DHL Supply Chain Ltd v Secretary of State for Health and Social Care [2018] EWhC 2213 (TCC) at [25], per O’Farrell J. 163 Case C-470/99 Universale-Bau [2002] ECr I-11617 [ECJ]; Case C-331/04 ATI EAC Srl v ACTV Venezia SpA [200......
-
Table of cases
...Dh Curtis (Builders) Ltd, In re [1978] 1 Ch 162 II.6.419 DhL Supply Chain Ltd v Secretary of State for health and Social Care [2018] EWhC 2213 (TCC) I.4.52, I.4.65, I.4.69 Dial D pty Ltd v Kingston Building (australia) pty Ltd [2013] NSWCa 277 II.6.208, II.6.306 Dial D pty Ltd v Kingston Bu......