Damping down the flames

17 October 2007
More news

18 October 2007

A legal request to stop Firebuy signing a new deal with a clothing supplier has been thrown out by a judge. But, as Antony Barton reports, the dispute may not end there

Purchasers at Firebuy must have breathed a sigh of relief when Mr Justice Morgan dismissed a request by a supplier to block it signing a contract with another.

An injunction was called for by Lion Apparel Systems on the grounds there were problems with Firebuy's procurement process. If it had been granted, it would have prevented Firebuy sealing the deal with preferred bidder Bristol Uniforms, causing problems for fire and rescue services whose current deals with clothing suppliers soon expire.

Around 10 fire and rescue services are nearing the end of their supply contracts and an injunction would have forced each of these to spend time and money on independent procurement processes for new clothing suppliers.

But the dispute could still cause Firebuy further misery.

As we report on here, a case conference between lawyers and a judge is due in the coming weeks to decide whether there will be a full trial to examine the procurement process. If a full trial does take place (which may not happen for a year) it could result in the award of damages to Lion.

Firebuy's CEO Terry Brewer says the judge's decision represents a "vindication" of the Integrated Clothing Project procurement process. He adds the judge finding no basis in 10 of the 13 alleged breaches has given the organisation the confidence to go ahead with the contract, dependent upon the approval of the Communities and Local Government department (CLG). The deal will make Bristol the single clothing supplier for all fire and rescue authorities in England for the next 15 years, with the Ministry of Defence and Welsh fire services also set to sign up.

Lion made the challenge using regulation 32 of the Public Services Contracts Regulations 1993. This gave it three months to lodge an objection from the date that preferred bidder status was awarded in March.

Alan Ma, partner at law firm Maxwell Alves, says there are no other reported cases of regulation 32 being cited in England. This meant the judge had to refer to an Irish case from 2003 for precedent.

He says it's important to note that just because Lion was not successful in this instance "suppliers should still seek to use these powers when necessary".

While the deal can now be signed, if Firebuy lets a contract before a trial and loses, it could have to pay a large amount in damages.

Brewer admits there is a possibility that Lion could win a full trial, but doubts this will happen. He says a permanent injunction will not be possible if the contract is signed and that Firebuy is currently discussing the possible extent of damage payments with the CLG.

But Steve Tyrrell, managing director of Lion, says it is not interested in damage payments. He claims it was forced to seek court action because it was the only way to receive adequate information on why its bid failed.

"Had we been given the information we sought then our concerns may have been satisfied without having to be aired in court," he says.

Brewer says this is "complete rubbish". He added: "There are the commercial considerations of the other bidders to take into account and the information Lion wanted, such as that surrounding financial models, could have compromised commercial confidentiality."

SMoct2007

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