Kellogg Brown & Root Ltd v Mayor's Office for Policing and Crime
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Joanna Smith |
| Judgment Date | 18 November 2021 |
| Neutral Citation | [2021] EWHC 3321 (TCC) |
| Docket Number | Case No: HT-2021-000329 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2021] EWHC 3321 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
THE HONOURABLE Mrs Justice Joanna Smith DBE
Case No: HT-2021-000329
Sarah Hannaford QC and Rachael O'Hagan (instructed by Bryan Cave Leighton Paisner LLP) for the Claimant
Joseph Barrett (instructed by TLT LLP) for the Defendants
Hearing dates: 18 November 2021
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 First Defendant (“ MOPAC”) dated 20 October 2021 for the lifting of the automatic suspension which arose on issue of a procurement challenge by the Claimant (“ KBR”) pursuant to regulation 96(1)(a) of the Public Contracts Regulations 2015, SI 2015/102 (“ the Regulations”); and
ii) An application by KBR dated 8 November 2021 for an expedited trial.
The proceedings arise from a procurement conducted by MOPAC, a contracting authority for the purposes of the Regulations. The procurement concerned a framework agreement (“ the Framework”) and call-off contract (“ the Proposed Contract”) for the provision of services designed to support the efficient running of MOPAC's estate of properties through contract, financial and operational management of the property supply chain, supported by systems and information technology (“ the Procurement”). MOPAC refers to this type of contract as an “integrator” contract.
KBR is a large and highly profitable commercial entity specialising in professional services and providing solutions and systems for projects and programmes in the government, aerospace, construction, defence, energy, engineering and technology sectors. It is the incumbent provider of support services to MOPAC pursuant to a contract entered into in April 2013 for a facilities management integrator role (“ the Current Contract”). Pursuant to the Current Contract, which is due to expire in April 2022, KBR provides support to MOPAC for the management of its estate and supply chain.
The proceedings against the Second Defendant (“ MPS”) have been discontinued.
Background
It is MOPAC's case that the Current Contract is a legacy contract with outdated systems and architecture such that significant, wide-ranging improvements are now required.
On 4 November 2020, MOPAC published a contract notice in the Official Journal of the European Union (“ the OJEU Notice”) advertising the Procurement. The OJEU Notice described the Procurement as being “for a single supplier framework for the provision of a property services integrator for the management of property related services readily accessible by GLA bodies, the Offices of the Police and Crime Commissioner and Central Government Departments”. The estimated total value of the Framework was identified as £400 million, excluding VAT, and its timescale was 60 months. The Procurement was to follow the Competitive Procedure with Negotiation pursuant to the Regulations.
MOPAC issued two versions of the Invitation to Negotiate (“ ITN”), before and after the negotiation phase (8 December 2020 and 19 April 2021 respectively). KBR successfully pre-qualified and submitted its initial tender on 4 February 2021. KBR was invited to take part in negotiation meetings on 10, 16 and 18 March 2021 and 14 April 2021 and submitted its final tender on 4 May 2021. It is KBR's case that the Framework would represent a substantial contract in its Facilities Management Integrator (“ FMI”) portfolio.
On 3 August 2021, MOPAC issued an Award Decision Notice notifying KBR that its bid in the Procurement had been unsuccessful (“ the Award Letter”) and stating that Sodexo Limited (“ Sodexo”) had been awarded the Framework (“ the Award”). The Award Letter stated, amongst other things, that Sodexo had scored a total of 67.42% (44.72% for Quality and 22.70% for Price) and that KBR had scored a total of 66.26% (34.66% for Quality and 31.60% for Price). Accordingly KBR was ranked second. The margin between the scores was only 1.16%.
KBR identified concerns with the evaluation and scoring of the bids in the Procurement by letter dated 11 August 2021 and also sought the key evaluation documents by way of early disclosure. MOPAC responded on 18 August 2021, providing limited further feedback and identifying an error in its feedback in the Award Letter.
On 24 August 2021, MOPAC provided a four page spreadsheet setting out moderation rationales for each of KBR's responses to the Quality Questions, together with agendas for the meetings between MOPAC and Sodexo. On 2 September 2021, MOPAC provided into a lawyers only Confidentiality Ring moderation rationales in a similar form for Sodexo's responses to the Quality Questions. Although KBR has asked for additional documents, in particular the scores or rationales of the individual evaluators, any notes of the moderation meetings for KBR and Sodexo, and notes of the negotiation meetings with Sodexo, these have not yet been forthcoming from MOPAC.
The Proceedings
KBR challenged the Award and issued its Claim Form on 27 August 2021, thereby triggering the automatic suspension under Regulation 95(1) of the Regulations.
In summary, KBR claims in the Particulars of Claim that MOPAC owed duties to it under the Regulations and that in breach of those duties:
i) The Award Letter failed to provide sufficient information as to the reasons for the outcome of the Procurement and subsequent correspondence provided only limited further explanation;
ii) MOPAC was in breach of its obligations and in manifest error in the scores which it awarded for six of the Quality Questions; and
iii) MOPAC failed to take proper steps during the negotiation phase to ensure that KBR understood MOPAC's requirements and could put forward the best possible tender or improve its tender, “in particular in relation to those areas of its bid which [MOPAC] thought were weak, namely those areas where it awarded [KBR] scores of 2 and 4”. During the course of her submissions, Ms Hannaford QC, acting on behalf of KBR, confirmed that this was intended to be a reference to the specific Quality Questions in respect of which it was alleged that scores of 2 and 4 had been in manifest error.
Accordingly, KBR seeks relief in the form of (i) an order that MOPAC's decision to award the Proposed Contract to Sodexo be set aside; (ii) a declaration that MOPAC was and is in breach of its obligations under the Regulations and/or general principles of EU law; and/or (iii) damages “including its lost profits on the anticipated Contract and/or its wasted tender costs”.
There has been some dispute during the course of the hearing as to the scope of the challenge that is made by KBR in its Particulars of Claim dated 3 September 2021 and as to whether the Particulars of Claim are sufficiently particularised for MOPAC to know the case it must meet at trial. Mr Barrett, acting on behalf of MOPAC, says that they are not. Given the “uniquely difficult position” inevitably faced by KBR in seeking to challenge the evaluation process (see Roche Diagnostics Limited v The Mid Yorkshire Hospitals NHS Trust [2013] EWHC 933 (TCC), per Coulson J (as he then was) at [20(i)]), brought about primarily by the information as to why it lost the Procurement being within the peculiar knowledge of MOPAC, I am not persuaded by MOPAC's submissions on this point. However, insofar as the point may be relevant to the issue of expedition (and has also been raised in the context of submissions as to the balance of convenience), I shall return to it later.
In its Defence dated 1 October 2021, MOPAC denies KBR's claims, pointing to a lack of particularisation and often doing little more than simply denying the allegations made. In respect of the scoring claim, it is MOPAC's case that the scores awarded to KBR were appropriate, rational and thus lawful. In its Reply, KBR points out (as it did in its Particulars of Claim) that it was unable to provide further particulars of various of its allegations in circumstances where MOPAC had refused to provide further documentation. KBR has an outstanding application for specific disclosure dated 16 September 2021 which is due to be heard on 3 December 2021.
By letter dated 7 October 2021, MOPAC's solicitors, TLT LLP (“ TLT”), wrote to KBR's solicitors, Bryan Cave Leighton Paisner LLP (“ BCLP”), requesting that KBR consent to the automatic suspension being lifted. In this letter they noted that “there is a mobilisation and implementation period for the Proposed Contract of at least six months” ( emphasis added). The letter pointed out that MOPAC was concerned that further delay in awarding the Proposed Contract would result in MOPAC not obtaining the benefits that were envisaged under the Proposed Contract until 2023, that it would expose MOPAC to ongoing performance issues under the Current Contract and that it would prejudice the transfer of services from KBR to Sodexo.
In a response dated 14 October 2021, BCLP recorded that KBR “does not deny that it is currently operating a legacy system” and that MOPAC would benefit from the Proposed Contract. Nevertheless, KBR rejected the proposal that the automatic stay be lifted.
MOPAC now applies formally to the court to lift...
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