The case concerned the purported award of a call-off contract for street lighting services by Inverclyde Council (Inverclyde) under a Crown Commercial Service framework agreement. Inverclyde awarded the contested contract to Amey Public Services LLP (LLP), which was not a recognised firm under the framework agreement. However, LLP is ultimately owned by Ferrovial SA, which is also the ultimate owner of Amey OW Limited (OW), a company which was on the relevant framework agreement panel.
The pursuers, Lightways (Contractors) Limited (Lightways) are competitors of LLP but also were not on the relevant panel. Lightways sought a declaration of ineffectiveness in respect of the contract between Inverclyde and LLP.
Inverclyde accepted that it had erroneously entered into the contract with LLP instead of OW, but argued that it would be in breach of the principle of proportionality for the Court not to permit the error to be rectified by means of the novation of the contract from LLP to OW. Inverclyde also challenged Lightways’ standing to challenge the contract award, on the basis that the latter could not have been awarded the contract in any case.
The Court held that the principle of proportionality related to circumstances where a public authority sought to impose onerous conditions or requirements on tenderers – therefore, it could not be relied upon by a public authority to avoid the consequences arising from its own failure to act within the regulations. In relation to standing, the Court ruled that Lightways was entitled to initiate the proceedings by reason of its status as an economic operator affected by Inverclyde’s decision to award a contract to its competitor without holding a fresh procurement process.
The Court of Session stated that it might have ordered the contract to be rectified if the error was merely a “minor clerical” mistake, but it considered the error in this case to be too serious to merit such rectification.
Consequently, the Court issued a declaration of ineffectiveness but deferred a decision on the consequences arising from its declaration.