Lion Apparel Systems Ltd v Firebuy Ltd
Jurisdiction | England & Wales |
Judge | MR JUSTICE MORGAN,Mr Justice Morgan |
Judgment Date | 27 September 2007 |
Neutral Citation | [2007] EWHC 2179 (Ch) |
Court | Chancery Division |
Docket Number | Case Nos: HC07C01111 & HC07C01645 |
Date | 27 September 2007 |
[2007] EWHC 2179 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Morgan
Case Nos: HC07C01111 & HC07C01645
Mr Jonathan Hirst QC & Mr Aidan Robertson & Ms Jessica Mance (instructed by Eversheds) for the Claimant
Mr Michael Bowsher QC & Mr Rob Williams (instructed by Pinsent Masons) for the Defendant
Hearing dates: 18 th, 19 th, 20 th, 21 st, 24 th & 25 th September 2007
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.
INTRODUCTION
This is an application by the Claimant, Lion Apparel Systems Limited, for an interim order under Regulation 32 of the Public Services Contract Regulations 1993, pending the trial of this action, to prevent the Defendant, Firebuy Limited, from entering into a contract with Bristol Uniforms Limited for the supply of fire-fighters' uniforms and personal protective equipment (“PPE”).
The Claimant is Lion Apparel Systems Limited which is the U.K. subsidiary of an American parent, Lion Apparel Inc. The Lion Group of companies produces a full range of fire-fighters' uniforms and PPE. In this judgment, I will refer to the Claimant as “Lion”.
The Defendant is Firebuy Limited (“Firebuy”). Firebuy was established on 20 September 2005 as a company limited by guarantee. It is a Non Departmental Public Body. One of its first tasks was to take over managing a procurement process which had been started by the London Fire and Emergency Planning Authority (“LFEPA”).
The Procurement Process
It is possible to describe the key steps in the relevant procurement process succinctly as follows.
The procurement process relates to a project referred to as the Integrated Clothing Project or “ICP”. The ICP reflects relevant central government policy. The ICP is to offer to Fire and Rescue Authorities (“FRAs”) the supply of PPE and other clothing (such as station wear) and also a stock management and maintenance service.
The procurement process in this case is governed by Council Directive 92/50/EEC and the Public Services Contracts Regulations 1993 (hereafter “the 1993 Regulations”).
On the 14 June 2003, LFEPA caused to be published in the Official Journal a notice of its intention to invite tenders for the ICP.
The competition was to take place in three stages. The first stage involved the submission of pre-qualification questionnaires (“PQQs”). This stage took place in around July 2003.
There was then a considerable interval of time before the second stage took place in mid 2005. The second stage involved the issue of an invitation to negotiate, known as an ITN1. This second stage dealt principally with the design of the various garments and other equipment. At around this time, the authority responsible for the procurement set up a Garment Trials Working Group (“GTWG”).
Firebuy was created in September 2005 to become the central purchasing body in connection with the ICP. Firebuy officially took over the procurement process from the LFEPA in December 2005.
The third stage was the principal stage of the procurement process. The first thing to happen was in September 2005, when the GTWG invited bidders to measure the volunteers who were to help with the garment trials. The bidders were given until January 2006 to make limited changes to their garments and resubmit garments to the GTWG. There were then garment fitting days on 3 and 4 May 2006.
On the 22 May 2006, Firebuy issued an invitation to negotiate, known as an ITN2 to the 4 bidders.
Between May and July 2006, the garment trials were carried out.
On 13 October 2006, Lion submitted its bid to Firebuy. Firebuy received 4 bids in total. On 13 December 2006, Firebuy invited all 4 bidders to what was called a Bid Development Day. On 19 December 2006, there were meetings between Lion and Firebuy, these meetings representing Lion's Bid Development Day.
On 29 January 2007, Lion submitted a revised bid. The other 3 bidders also submitted revised bids.
On 23 March 2007, Firebuy announced the result of the procurement process. Bristol Uniforms Limited (“Bristol”) was the preferred bidder. All the bidders had been ranked by Firebuy and Lion was third in the list of preference.
On 27 March 2007, Lion's solicitors requested certain information from Firebuy. Firebuy's solicitors replied on 28 March 2007. On 29 March 2007, Lion and Firebuy met for what was called an oral debrief. On 2 April 2007, Lion's solicitors raised further requests for information from Firebuy. On 5 April 2007, Firebuy's solicitors replied. There was then considerable further correspondence between the parties.
In a letter of 12 April 2007, Lion's solicitors identified matters of concern to Lion. Lion now relies on that letter as a notice under Regulation 32 of the 1993 Regulations.
On 24 April 2007, Lion issued the first claim form in these proceedings but did not serve it on Firebuy, which did not know of this claim form until some time later.
On 27 April 2007, Firebuy supplied Lion with a very lengthy document intended to be a debriefing in relation to Lion's bid and participation in the procurement process.
On 1 May 2007, Lion's solicitors identified a number of alleged breaches of obligation by Firebuy. Lion relies on that letter also as a notice under Regulation 32 of the 1993 Regulations.
On 19 June 2007, Lion's solicitors wrote again identifying a number of alleged breaches of obligation by Firebuy. Lion relies on that letter also as a notice under Regulation 32 of the 1993 Regulations.
On 22 June 2007, Lion issued its second claim form in these proceedings. The claim forms in both actions were served on that day on Firebuy.
On 5 July 2007, Lion served Particulars of Claim in both actions.
During the hearing, Lion's solicitors sent a further notice for the purposes of Regulation 32 of the 1993 Regulations and issued a third claim form.
THE RELEVANT LEGAL PRINCIPLES
The procurement process must comply with Council Directive 92/50/EEC, the 1993 Regulations and any relevant enforceable Community obligation.
The principally relevant enforceable Community obligations are obligations on the part of the Authority to treat bidders equally and in a non-discriminatory way and to act in a transparent way.
The purpose of the Directive and the Regulations is to ensure that the Authority is guided only by economic considerations.
The criteria used by the Authority must be transparent, objective and related to the proposed contract.
When the Authority publishes its criteria, which conform to the above requirements, it must then apply those criteria. The published criteria may contain express provision for their amendment. If those provisions are complied with, then the criteria may be amended and the Authority may, and must, then comply with the amended criteria.
In relation to equality of treatment, speaking generally, this involves treating equal cases equally and different cases differently.
Council Directive 89/655/EEC (the remedies directive) requires Member States to take measures necessary to ensure that decisions taken by an Authority in this context may be reviewed effectively and as rapidly as possible on the grounds that such a decision may have infringed Community law in the field of public procurement or national rules implementing that law.
Regulation 32 of the 1993 Regulations (which I consider below) gives effect to the remedies directive.
When the court is asked to review a decision taken, or a step taken, in a procurement process, it will apply the above principles.
The court must carry out its review with the appropriate degree of scrutiny to ensure that the above principles for public procurement have been complied with, that the facts relied upon by the Authority are correct and that there is no manifest error of assessment or misuse of power.
If the Authority has not complied with its obligations as to equality, transparency or objectivity, then there is no scope for the Authority to have a “margin of appreciation” as to the extent to which it will, or will not, comply with its obligations.
In relation to matters of judgment, or assessment, the Authority does have a margin of appreciation so that the court should only disturb the Authority's decision where it has committed a “manifest error”.
When referring to “manifest” error, the word “manifest” does not require any exaggerated description of obviousness. A case of “manifest error” is a case where an error has clearly been made.
I take the above principles from the decision of the Supreme Court of Ireland in SIAC CONSTRUCTION V MAYO COUNTY COUNCIL [2003] EuLR 1, and the decision of the Court of First Instance in EVROPAIKI DYNAMIKI V COMMISSION 12th July 2007 at [89].
Regulation 32 of the 1993 Regulations provides that the duty on an Authority to comply with the 1993 Regulations and with any enforceable Community obligation in respect of a public services contract is a duty owed to the bidder.
A breach of the duty referred to in Regulation 32 is actionable by a bidder who in consequence suffers loss or damage or risks suffering loss or damage.
The bidder will be able to show that a breach of duty will cause him to suffer loss or damage, or the risk of loss or damage, if he had a chance (which the law recognises as sufficiently good to merit consideration) that if the breach had not been committed, the contract would be awarded to it and the breach causes the bidder to lose that chance: MATRA...
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