Pursuer: Crawford QC, J MacGregor; CMS Cameron McKenna (Scotland) LLP

Defender: Dunlop QC, Duthie; Dundas & Wilson LLP

7 February 2014

[1] In this action the pursuer, British Telecommunications plc (BT) seeks an order under regulation 48 of the Public Contracts (Scotland) Regulations 2012 ("the regulations") setting aside the defender's decision to appoint Capita plc as the preferred bidder in relation to the procurement exercise concerning the Scottish Wide Area Network (SWAN), failing which for payment of damages of £20m. The pursuer describes SWAN as the creation of a single, holistic telecommunications service available for the use of any, and potentially, all public service organisations in Scotland. The defender is the Common Services Agency (also known as NHS National Services Scotland). Bearing in mind the need for expedition, an early diet of debate was fixed. After that hearing, and having taken a few days to allow reflection and consideration of the papers, I delivered the following ruling in open court.

The ruling after the debate

[2] The pursuer asks the court to set aside the defender's decision to appoint Capita as the preferred bidder and to order a new SWAN procurement exercise, failing which an award of damages. Capita has not entered the process. The raising of the action has prevented the completion of the contract. An expedited hearing took place on 16 and 17 January. On behalf of the defender, Mr Dunlop Q.C. moved the court to dismiss the action, founding on pleas of time bar, competency, and relevancy. For the pursuer Ms Crawford Q.C. sought a proof before answer. Mr Dunlop did not move for an interim order, not even as a fall-back position. (An interim order under regulation 47(9)(b) would lift the prohibition on the completion of the contract with Capita - as would dismissal of the action.) Both counsel invited the court to put the case out by order so that the parties could reflect on the implications of its ruling on the issues debated at the hearing, and decide on the appropriate further procedure, including whether an interim order might be sought.

[3] Mr Dunlop described the pursuer's complaint about non-disclosure of a particular aspect of the scoring of the bids as "the nub of the case". I agree with him on this. Although Ms Crawford sought no more than a proof, Mr Dunlop urged the court to rule on this matter now, citing the Second Division's recent emphasis on an objective approach based upon how a reasonable tenderer would read and understand the documents (Healthcare at Home Ltd v Common Services Agency 2013 SC 411). He submitted that there was no need for evidence on this point. If there is a problem with the procurement process, the defender would prefer to know about it sooner than later. Whilst stressing that there is no allegation of illegitimate conduct, Mr Dunlop noted that the pursuer is the incumbent provider, the inference being that it may be less concerned about a delay in the resolution of the case. I now turn to what has been described as the nub of the case.

[4] A large number of the challenges narrated in the summons have a common theme. As elaborated upon in the course of the hearing, it can be described as follows. An output based specification (OBS) set out the specific requirements for the SWAN services. The final version, upon which tenderers were to form their bid, was dated 13 September 2013 and is 6/4 of process. Section 3 of production 6/2 sets out the evaluation criteria and scoring methodology to be used to assess the tenders and identify the most economically advantageous bid. The OBS contains percentage weightings for the various aspects of the bids. By the final stage of the process, 35% was allocated to technical issues, 30% to commercial/legal, and 35% to affordability/price.

[5] These three headings were described as level 1 sub-criteria. They were each divided into level 2 sub-criteria, and so on, down to level 4 sub-criteria in respect of the initial sub-portfolio of services in the technical section. Each level 2 sub-criterion was allocated a certain amount of the overall percentage; for example, the initial portfolio of services level 2 sub-criterion carried 12%, meaning that it bore more than a third of the total percentage attributed to the technical section. That 12% was spread over four level 3 sub-criteria in varying proportions; for example one carried 4%, with that 4% split between two level four sub-criteria, with 3% to one and 1% to the other. All of this is shown diagrammatically at pages 10 and 11 of production 6/2.

[6] During the hearing counsel discussed the point at issue by reference to the customer engagement section of the technical chapter in the OBS, though this could equally have been done by reference to other aspects wherever a sub- criterion contains a number of individual requirements. The customer engagement section is at chapter 5 of the OBS and includes various sub-chapters, for example account management, customer satisfaction, and training. Over the whole chapter there are eight individual requirements, each with a unique identification reference. For example, CEN001 calls for a description of an account management structure, and CEN007 asks for suggestions as to SWAN related training courses.

[7] Of the 35% allocated to the technical section of the OBS, 1% was allocated to the customer engagement section. Section 3.2 of production 6/2 sets out the technical evaluation and scoring methodology. Before turning to it, it is important to explain how the defenders scored the bids, all as described by Mr Dunlop at the hearing. This was illustrated by reference to the customer engagement section. Counsel explained that on the marking range of 0-5, a cumulo decision was made on the responses to all eight individual requirements in the section. The possible scores were 0, 1, 3 or 5. In order to obtain a 3 or a 5, a bidder would need to meet all the requirements in each section, by which I understood Mr Dunlop to mean the basic or minimum response needed for each requirement. There were no pre-ordained relative weightings as between the individual requirements, but if one requirement was not met, and no matter how meritorious the bid was in respect of the others, the maximum possible score was then 1 out of 5. A failure to meet the basics of one requirement necessarily limited the maximum overall score to 1 out of 5. By contrast, if all the requirements were just met, a bid could score a 3. If all the requirements were satisfied it would be open to the scorers to award a 5, if overall the responses so merited. The pursuer's complaint is that, until a post decision de-briefing on 15 November 2013, it was unaware that a failure to satisfy the basics on one requirement would so limit the maximum possible score. The defender submits that this would have been clear to any reasonable bidder reading production 6/2 and its predecessor documents. Thus the complaint of non-disclosure of this element of the evaluation criteria and scoring methodology should be rejected.

[8] Ms Crawford submitted that knowledge of the consequences of missing out on one requirement would have had an impact on the preparation and the content of the pursuer's tender. It was understood that the requirements would be assessed cumulatively, and an overall score of up to 5 awarded accordingly, with regard being had to all the responses. Thus, for example, a near miss on one requirement could be compensated by good responses in the others. Mr Dunlop observed that the specific complaints made in the summons tend to relate to those aspects of the bid where the pursuers scored a 1, suggesting that this issue is at the heart of the dispute between the parties. Both Ms Crawford and Mr Dunlop proceeded upon the basis that the question turns on how a reasonably diligent, competent and informed tenderer would have understood section 3.2 of production 6/2. I therefore turn to consider that section.

[9] At the outset I notice what, to my mind at any rate, is an uncertainty as to the meaning of the term "referenced statement". If one simply reads the narrative without reference to the glossary of terms in schedule 1, "referenced statement" relates to the sub-criteria described in the immediately preceding part of the document. This comes across strongly in the second paragraph of section 3.2. The fifth paragraph makes it clear that each sub-criterion will be given a score out of 5. The narrative does not recognise or address the issue of a sub-criterion with a number of individual requirements within it, for example the eight requirements in the customer engagement level 2 sub-criterion. The narrative in section 3.2 indicates that the eight responses to the individual requirements will be given a score on a cumulative basis, for example a 3, which would then mean 0.6% being added to the overall score of the bid (0.6% being 3/5^ths of 1%). Doubts may creep in if one looks at the definition of "referenced statement" in the glossary of terms at schedule 1, and to the terms of table 2 in section 3.2. Table 2 appears to recognise only one requirement being scored out of 5, and the definition equiperates "referenced statement" with the individual requirements identified by a unique reference code. This suggests that one should attempt to read section 3.2 on the basis that each of the requirements in the customer engagement is a separate referenced statement. This is not an easy task. All would be well if each sub-criterion contained only one requirement, but this is not always the case. It may be that the drafter overlooked the apparent conflict between the terms of the narrative in section 3.2 and the definition of referenced statement in schedule 1.

[10] Having said all that, the key question is, did the document disclose the scoring methodology which was employed, including that to miss the basics in one of a number of requirements would limit the maximum possible mark to 1 out of 5? No matter how one might attempt to reconcile the ambiguity which I have discussed, in my opinion the answer to this question is no. If an individual score was reached for each requirement, on the basis of the text in section 3.2 the bidder would expect, and in my view would be entitled to expect, that at the end of the exercise there would be a cumulative assessment for the sub-criterion as a whole, with at least the potential for a score of 3 or above, even if one requirement achieved only a zero or a 1. If, on the other hand, there were no individual scores for each requirement, but simply one overall score awarded with regard to the responses as a whole, again the bidder would not have been told that the maximum mark is a 1 if there is a failure to meet the minimum in respect of one of the requirements.

[11] All of this is disclosed most clearly from the terms of the second paragraph in section 3.2, but is also implicit in the rest of the section. In any event, one searches in vain for any express explanation of the consequences for the overall mark if one requirement is missed. In my opinion the reasonable tenderer would not understand that in such circumstances the maximum possible score is 1 out of 5. It follows that the scoring methodology involved a departure from that set out in the relevant documents. I uphold the pursuer's submission as to the proper understanding of the terms of section 3.2 and equivalent passages in production 6/2. I reject Mr Dunlop's submission that the practice adopted by the scorers should have been anticipated by the reasonable reader of section 3.2. As a result the pursuer is also justified in saying that there was no reason to suspect that anything was amiss in this regard until the meeting in mid-November. As Mr Dunlop recognised, this has implications for the time bar plea.

[12] My understanding is that both counsel proceeded upon the basis that such a ruling would mean that, having regard to the legal propositions set out in paragraph 122 of Mr Justice Ramsey's judgment in the case of Mears Limited v Leeds City Council [2011] EWHC 1031 (TCC), there was a breach of the transparency requirement in regulation 4(3). If I am wrong on that, the issue can be explored at the by order hearing. In any event the question arises as to any remedy to which the pursuer may be entitled. Again I expect parties' position on the implications of this ruling to be clarified at the next hearing.

[13] The above decision relates directly to the grounds of challenge in articles 16-30 of the condescendence of the summons. However the same complaint does, to varying degrees, have relevance to at least some of the other complaints in the summons. So far as these alternative grounds of challenge are concerned, for example, manifest error and failure to seek clarifications, I prefer the submissions for the defender, and this largely for the reasons given in its note of argument as elaborated upon by Mr Dunlop at the hearing last week. However, I will make further brief comments by way of explanation.

[14] Insofar as the averments in article 31 criticise the scores awarded, and also matters of marking judgment distinct from the section 3.2 issue, in my view they are not relevant to a proper challenge under the regulations. The authorities are clear that the court should not become embroiled in a review of the merits of the assessment process itself. Similar remarks apply to the averments in articles 32, 33 and 34.

[15] With regard to the averments in articles 35 and 36, in my opinion, even if proved, they are insufficient to demonstrate manifest error. Again I consider that the pursuer is simply seeking to open up an investigation into the facts and the substance of the decision-making process itself. Similar comments apply in respect of article 37. The defender proceeded on the basis of the terms of the pursuer's bid. The section 3.2 issue may be relevant to these complaints, in that in this chapter BT was given a 1, and Capita a 5.

[16] Articles 38 to 42 aver a failure to seek various clarifications of the pursuer's bid. In my view there is no real prospect of the pursuer proving that the defender was required to make any of the suggested requests. At most, these were discretionary matters for it to weigh up and decide. Articles 43-45 set out a challenge based on an alleged failure to provide adequate reasons for the decision on the bids. I agree with Mr Dunlop's proposition that the averments are lacking in specification, and with his submission that the reasons and explanations proffered to the pursuer were sufficient to comply with the requirements of the relevant regulation.

[17] As mentioned at the outset, the defender has a plea of time bar. This was based on its understanding of the pursuer's case in articles 16-30 of the pleadings, which refer to a failure to disclose the relative weightings of the requirements within a sub-criterion. It was said that, if there is merit in this complaint, it could have been taken at a much earlier stage when the relevant documents were issued. However, by the close of the discussion last week, the exact nature of the main complaint was clarified in such a way that Mr Dunlop acknowledged, in my view rightly, that the pursuer could not have been aware of it before the meeting on 15 November 2013. It follows that it is not caught by the time bar provisions in the regulations.

[18] This leaves only the plea to the competency of the action, which was based on a complaint that the pursuer's agents' letter, 6/18 of process, failed to meet the requirements of regulation 47(6), in that there was insufficient notice of the grounds of complaint. (The timing point was not pursued.) It was said that the letter is generic, and should have been more specific as to the particular allegations of breach of duty. While it is true that the pursuer cannot open up new fronts in the action, I am not persuaded that anything of that nature has occurred, nor that there was any fundamental deficiency in the terms of the letter as would prevent all or any of the challenges in the summons. I see no merit in the competency plea.

[19] A few days later a further hearing took place. Both parties presented submissions on further procedure in the light of the above decision. Thereafter I advised parties as follows, again in open court.

The ruling after the second hearing

[20] Having decided that there has been a breach of the regulations, I now require to deal with an application by the pursuer for an order setting aside the decision to award the SWAN contract to Capita, and with the defender's request for an order in terms of regulation 47(9)(b) which would allow the contract to be concluded, thus limiting the pursuer's remedy to damages. Mr Dunlop withdrew a motion for dismissal after Ms Crawford tendered a minute of amendment elaborating upon how the pursuer intends to demonstrate that the breach of the regulations had an impact on the terms of the pursuer's bid.

[21] I deal firstly with the pursuer's motion for a set aside order. Both counsel accepted that, in terms of regulation 48(1)(b), the court enjoys a broad discretion to select the most appropriate remedy for a breach of the regulations. The pursuer argues for an order which would result in a re-run of the process, at least from the invitation to submit a final tender stage. The defender contends that the court should allow the contract to proceed, meantime preserving the pursuer's right to seek damages for any loss caused by the irregularity.

[22] I now summarise the submissions tendered by Ms Crawford on behalf of the pursuer. Ms Crawford emphasised that, because of the non-disclosure of part of the scoring methodology, BT was prevented from putting forward its best bid, or, in other words, the one most likely to win the competition. It is this which gives BT a cause of action and the right to seek reduction of the decision. Evidence is not required to allow this to be resolved in BT's favour. Full knowledge of the scoring methodology would have had an impact on the whole bid, not just on the two sections in the technical chapter where a score of one was achieved. The primary remedy should be one which corrects the flaw in the procedure, and thereby allows a re-run avoiding the illegality which has tainted the bidding and scoring process so far. There has been a breach of the regulations, and to sanction the contract would award Capita what were described as "poisoned fruits". Ms Crawford submitted that, for actionability in terms of regulation 47(5), it is enough for the pursuer to demonstrate a risk of harm, thereby opening up the possibility of reduction of the decision. It is not necessary to prove that on full disclosure the pursuer would have won the competition. Such issues arise only in the context of a damages claim. According to Ms Crawford the defenders should not be allowed to breach the regulations, as she put it, with impunity. Substantial weight should be given to the public interest in a lawful and transparent procurement exercise, especially in a matter of considerable public importance.

[23] With reference to Ms Sue Edwards' affidavit, the view is that the delay need be for no more than 6 to 8 weeks. It would not be necessary to rewind to the start of the whole process. Any immediate problems for Education Scotland and the Pathfinder (South) Councils (Scottish Borders and Dumfries and Galloway Councils) can be resolved in the longer term. As for the information disclosed to parties after the decision, this was simply a consequence of an application of the regulations. Acknowledging that there are few reported decisions where the court has set aside a decision, the norm being the grant of an interim order, particular reliance was placed upon two Northern Irish judgments, to which I will return. It was submitted that an award of damages would mean that BT were deprived of "a fair crack of the whip", and that a damages claim would be unlikely to address reputational damage to the company from losing out on the SWAN project. To quash the decision would respect the core purpose of the regulations, minimise injustice, and provide an effective review of the procurement exercise.

[24] Turning to Mr Dunlop's submissions on behalf of the defender, he recognised that they are relevant to both of the applications before the court. He suggested that the pursuer will struggle to prove that the non-disclosure of part of the scoring methodology made a difference to the outcome of the competition. Production 6/12 reveals the amount of ground which BT need to make up. For example, it would not be enough to substitute marks of five for the scores of one in the technical section. He noted that, in terms of the minute of amendment, the pursuer offers to prove only that it is possible that BT would have won the contract. Notwithstanding the irregularity in the process, this remains a weak case on the merits. The court should not order a re-run just because BT might have won. Without a stronger case on the operative effect of the problem, a damages claim is a sufficient and appropriate remedy. Reliance was placed upon Ramsey J's judgment in the case of Mears (cited earlier). This was an example of the court restricting the claim for a proven breach to one of damages. There is no presumption in favour of reduction as a primary remedy. Everything depends upon the particular circumstances of the particular case.

[25] Counsel suggested that Ms Crawford had no satisfactory answer to the question: what is wrong with an award of damages for any loss caused by the breach? Such a claim would be relatively straightforward, involving identification of the contract value, BT's profit margin, and an assessment of the lost chance. On the other hand, if the decision to award the contract to Capita were to be set aside, this would cause a large number of problems and considerable harm to the public interest benefits underpinning the implementation of the SWAN project, which itself was prompted by the McClelland report recommendations. The factors relied upon by Mr Dunlop in this regard can be summarised as follows. Reduction would cause delay, uncertainty, and yet more non-compensable losses to public bodies and to Capita. In all probability Education Scotland and the Pathfinder (South) Councils would lose the benefits of their early involvement in the SWAN project. In the meantime BT would continue to be paid as the incumbent provider, while Capita and others would have no remedy for wasted costs and lost savings. The considerable benefits flowing from the improved public services inherent in the McClelland recommendations would be, at best, delayed for an uncertain period. Vulnerable groups in society would be harmed.

[26] Mr Dunlop indicated that there are real questions as to whether there could be a fair re-run of the process given the recent disclosure to the parties of details as to the bids, and of other confidential and sensitive information. The worst outcome would be a fresh challenge to a new decision. Those with responsibility for the procurement exercise question the practicality of a re-start at the advanced stage suggested by the pursuer, especially in a process governed by the competitive dialogue procedure. In any event it is unlikely that Education Scotland and the Pathfinder (South) Councils would be involved in any new competition, given that they will require to renew their current contracts this year. So any new specification and bids are likely to be materially different. It was submitted that all of this outweighs the arguments for a re-run, especially given BT's continuing right to seek compensation for any proven losses. Furthermore, as the wholesaler, BT will still receive financial benefit, even with Capita as the chosen contractor.

[27] Turning to my decision on the applications before the court, I consider that much can be gained from a consideration of three cases, each of which involved a proven breach of the regulations. I will begin with the two decisions from Northern Ireland relied upon by Ms Crawford. The first of these is McLaughlin and Harvey Limited v The Department of Finance and Personnel (No.3) [2008] NIQB 122. The plaintiff participated in a competition to identify five economic operators who would join a framework agreement allowing them to bid for some £800 million worth of public building works over four years. The plaintiff came a narrow sixth, less than 1% behind those marked fourth and fifth. The judge noted that even a modest improvement in its marking could have materially affected the outcome. The plaintiff offered the fourth lowest price, so was well placed to benefit from any slight improvement in the quality assessment of its tender. It was held that some 39 elements taken into account by the evaluation panel had not been disclosed to the plaintiff, nor had the weightings applied to them. The court having rejected a request to add the plaintiff to the list of approved operators, the issue came to be between setting aside the decision complained of, or limiting the claim to damages. The judge asked: which is the most appropriate remedy to grant to the plaintiff, it having succeeded in proving a breach of duty? He noted the difficulties which, in the particular circumstances of the case, the plaintiff would face in seeking to prove and qualify damages. To set aside the framework agreement would cause a delay of months, not years. In the meantime the department could enter into specific contracts for any projects ready to proceed. Reduction would cause little, if any, real inconvenience, and would avoid the waste of paying both the contract price for works and damages to the plaintiff. This could be contrasted with a difficult and lengthy damages assessment process. The conclusion was that damages would be a manifestly inferior remedy. Setting aside the framework agreement was a much better alternative.

[28] The second Northern Irish case is Resource (NI) v The Northern Ireland Courts and Tribunals Service [2011] NIQB 121. An evaluation panel failed to disregard an impermissible enhancement to a bid by G4S. The judge was, to put it mildly, unimpressed with the quality of the evidence led in support of the decision. He found that there were manifest and serious breaches of the rules which were contrary to the substance, spirit and ethos of the relevant guidance, and which infringed the principle of equality of treatment. Only G4S benefited from preferential treatment in a case where "the margins could not have been tighter". In the critical section of the bid, G4S received a mark of five out of five. Had it been below a four, the plaintiff's bid would have won. The judge regarded the impermissible factor as "plainly influential". The error was serious and of obvious gravity, the panel having given credit for a factor which was "alien to the contract being pursued".

[29] While it was noted that each of the remedies listed in the regulations is discretionary in nature, no one had suggested that damages would be an appropriate remedy. The contest was between a re-run before a different evaluation panel, or the judge simply awarding the contract to the plaintiff. The former option was chosen. In all the circumstances it is wholly understandable that the court was not asked to preserve the decision by limiting the claim to damages. Plainly this was a case at the very serious end of the spectrum, with the unfair advantage given to one bidder being just enough to see it over the line narrowly ahead of the plaintiff.

[30] The third case is that of Mears (cited earlier). It was established that the authority had failed to notify the tenderers of the applicable scoring guidance and consequent weightings, all in breach of the transparency provision in regulation 4(3) and the terms of regulation 30(3). As to the test of actionability, the judge concluded that, in the context of a case where he was considering the detail of the loss, he required to decide whether, had the relevant disclosure taken place, there was a real or significant, as opposed to a fanciful chance, that the plaintiff's bid would have been selected. He referred to earlier case law to the effect that, while the damages test is proof of loss, a cause of action under the regulations does not depend upon proof that but for the breach of duty the plaintiff's tender would have won. Mr Justice Ramsey was satisfied that, because of the infringement, Mears lost a significant chance of obtaining the contract. The judge observed that the court has a discretion as to the appropriate remedy. The court required to balance the public interest in the contract proceeding and the private interests of the plaintiff. There is no presumption in favour of any one form of remedy. Everything depends upon the particular circumstances. The remedy requires to be proportionate. At one end of the scale there might be a breach so serious that it can only be met by quashing the decision at issue. There will be other cases where the impact is less serious or obvious, and in which damages will deal adequately with the breach.

[31] In the circumstances of the case before him Ramsey J concluded that the overall balance favoured allowing Mears the remedy of damages alone. The plaintiff's loss, or risk of loss, could be adequately compensated by financial compensation, which provided a proportionate remedy.

[32] The following general propositions are illustrated by these decisions. The judicial task is to identify the most appropriate remedy, which should be both proportionate and effective. The court enjoys a broad discretion which is to be exercised with regard to all the relevant facts of the particular case. A proven infringement of the regulations will always carry substantial weight, but not all breaches of duty have the same impact and effect. For example, if there was a serious breach of a fundamental principle underpinning the regulations which related directly to the evaluation of the winning tender, and it was that unfair advantage which caused its success, that would be a strong indicator in favour of an order setting aside the unlawful decision. However, if a less egregious breach was of more doubtful operative effect, and if reduction would cause harm to public and other legitimate interests, the court may well prefer the route of financial compensation for any loss sustained. In this regard, something will depend on whether the proof and assessment of damages is of more than usual complexity or difficulty. It is relevant to consider and weigh in the balance the likely benefits and detriments of respectively a set aside order and the alternative of limiting the claim to one of damages. If a re-run causes little harm and inconvenience, that will support the view that a fresh competition should be carried out free of the problem which tainted the previous procedure.

[33] I have taken into account all that is said in the affidavits lodged in court. I mention the following specific points. Some of the affidavits explain how, with disclosure of the full scoring methodology, BT would have altered its bid. It is only realistic to acknowledge that this is being said with the benefit of hindsight as to the scores given to the bids. There will always be an inherent difficulty in trying to construct what BT's bid would have looked like with full disclosure first time round, and to assess the score it would have achieved. That said, I have no difficulty in accepting the general point that it is likely that BT would have taken greater care and invested more in respect of individual requirements where, within a sensible budget, there was room for improvement. Mr Gibb notes that even within the pricing requirements, BT had some £10m or thereby with which to enhance its bid.

[34] Mr Salvetta explains the potential benefits and savings for public services involved in the SWAN project. In respect of the four vanguard partners (the defender, Education Scotland and the Pathfinder (South) Councils), the contract value is £110m, potentially rising to £325m across the wider public sector. He comments on the work required at Capita before the new system can go online as planned by April 2014. Already the work is several weeks behind schedule. He notes the imminent problem of the expiry of Education Scotland's current contract. Continuing uncertainty will adversely affect the Pathfinder (South) Councils in respect of the contracts with their providers, which end in October this year. The SWAN project is described as a flagship policy designed to protect vulnerable groups in society by facilitating the rapid exchange of information. Mr Salvetta elaborates upon the concerns for the vanguard partners in his supplementary affidavit. So far as NHS Scotland is concerned, work needs to start by April 2014. More generally, on-going problems and delays could impact on the viability and credibility of the whole project. Other potential partners could be dissuaded from participation.

[35] The impact of delay and uncertainty on Capita is explained in Mr Strang's affidavit. Capita's Mr McLaughlin questions the feasibility of the pursuer's suggestion that the process could be re-run from the invitation to submit a final tender stage to a conclusion in just a few weeks. He states that, on any view, the Education Scotland contract could not be completed on time, and some technical requirements would not be achieved before the planned roll out of Pathfinder (South) services. The NHS Scotland transition would be at risk. He offers the view that in terms of delivering the objectives of the SWAN programme, the point of no return is approaching. In addition, Capita have concerns over the fairness and integrity of any new competition, given the revelation of commercially sensitive information since the original decision.

[36] In my opinion the nature and the impact of the breach of the regulations in the present case are very different from those discussed in Resource (NI), which concerned a grave irregularity directly relating to the successful bid. The evaluators gave it an unfair and illegitimate advantage, which, given the small margins involved, meant that it, rather than the plaintiff's bid, was successful. But for the irregularity the plaintiff would have won the competition and been awarded the contract. While I accept that in the present case the defender's breach of duty impacted upon the pursuer's approach to its bid, there was no favouritism towards nor direct discrimination in favour of the Capita tender. In my view, the infringement is of a less serious nature, consisting of a deficiency in the description of the scoring methodology. The successful Capita bid is not directly tainted in the manner of the G4S tender. Furthermore, in Resource (NI) there was no real doubt that, but for the irregularity, the plaintiff's bid would have won. That is not true in the present case. On the contrary, in the whole circumstances, and given the scores as set out in production 6/12, my impression is that it would be difficult for the pursuer to demonstrate that, absent the non-disclosure, it would have won the competition. To be fair the pursuer does not offer to prove that. It pleads that, for the reasons elaborated upon in the minute of amendment, had it known the full facts it might have presented the successful tender. In damages terms this translates to a loss of a chance. In my view there is force in Mr Dunlop's submission that, in the absence of a clear demonstration that the flaw in the process altered the result, and given the adverse consequences of a re-run, it would not be proportionate to set the decision aside.

[37] Unlike the position in the other Northern Irish case of McLaughlin and Harvey Limited, to order a re-run in the present case will cause significant harm, particularly in respect of the Education Scotland and Pathfinder (South) contracts, which are due for renewal this year. At least one, and possibly both of these vanguard partners would, in all likelihood, drop out of the project meantime, and there would be uncertainties over the NHS contract. In my view, even if the process returned only to the invitation to tender stage, the prediction of a delay of no more than two months is likely to be optimistic, given the scale of the task and the need to mobilise other parties. In any event, it is far from clear that it would be practicable or sensible to rewind only to that point, especially given the use of the competitive dialogue procedure. There is the potential for a challenge to the outcome of any new competition, given the possible compromise of its integrity and fairness arising from the recent disclosure of sensitive information concerning the parties and their previous bids. The worst outcome would be if a new competition became mired in a fresh legal challenge.

[38] I recognise the strong public interest in a fair and transparent procedure best placed to identify the most economically advantageous bid. Failing a re-run, no doubt BT will harbour an understandable sense of grievance and of hurt which no damages claim will assuage or compensate. However, it will be entitled to pursue a damages claim which, in comparison with some, will not be unduly complicated or difficult. The case law teaches that I require to balance the public interest in allowing the contract to proceed and the private harm to the pursuer in being deprived of notice of the full details of the scoring methodology to be deployed. In my view, and having regard to all the circumstances, damages is an adequate, proportionate, and effective remedial route, and one which is preferable to the alternative of setting the defender's decision aside. I shall therefore refuse Ms Crawford's motion.

[39] Turning to the defender's application for an order under regulation 47(9)(b) ending the prohibition on the completion of the contract with Capita, as counsel recognised, much the same considerations arise as have been discussed in the context of the proposed set aside order. In considering the strength of the pursuer's case, full weight needs to be given to the fact that a breach of the regulations has been established, and also to the uncertainties as to the extent to which it affected the bids, their scores, and the ultimate outcome. For the reasons given earlier, the issues of balance of convenience and the public interest favour the defender. I have already held that a claim in damages is an adequate and proportionate remedy. It would not be impeded by an order lifting the standstill period. The overall balance points to allowing the contract with Capita to proceed without further delay. I shall therefore grant the defender's application.

[40] The pursuer sought leave to appeal, against these decisions, but subsequently that motion was withdrawn. The overall result is that the court has allowed the defender to complete the contract with Capita, and the pursuer's remedy is limited to a claim in damages for any loss which it can prove was caused by the breach of regulation 4(3).

[41] The court has attempted to follow the recent guidance of the Inner House, which is to the effect that the court should be mindful of the need for questions as to the validity of public procurement decisions to be resolved as quickly as reasonably practicable. As a result, and notwithstanding the complexities of the case, this stage has been reached two months after service of the summons. I wish to acknowledge the willing cooperation of parties, agents, and counsel in this task, and to thank all involved.