Judge rules in favour of health trust in contract dispute

13 January 2011

13 January 2011 | Angeline Albert

The High Court has allowed University Hospitals Coventry and Warwickshire NHS Trust (UHCW) to award a contract irrespective of an outstanding legal challenge by an aggrieved bidder.

Exel Europe, part of Deutsche Post DHL, tried to prevent the award of a contract to transfer management of the Healthcare Purchasing Consortium (HPC) to preferred bidder HCA International, a US specialist in buying for hospitals.

Although the judge considered five out of six alleged breaches of procurement rules to be “at best weak”, he said there was “a serious issue to be tried” in relation to complaints about the trust’s discussions with HCA in the five months prior to its decision to tender.

Exel Europe wanted the award decision to be set aside, but Mr Justice Akenhead said damages would be an alternative remedy, if Exel was successful in the case, considering the delay to the procurement if the suspension continued and Exel were ultimately unsuccessful. “The defendant has clearly established an urgency for this procurement exercise to go ahead,” he wrote.

The Healthcare Purchasing Consortium is a collaborative procurement hub run by the trust on behalf of itself and 40 other NHS trusts. UHCW wanted to transfer management of the hub to a third party because of the need for significant investment in staff and technology to achieve efficiency savings.

EXEL Europe, which operates the outsourced purchasing provider NHS Supply Chain, raised its concerns with the trust’s chief executive concern over comments “made by certain HPC executives in a public forum, about a deal having already been done with HCA” in 2009 before a tendering process began. The trust responded by saying: “No deal of any kind, has ever been done with HCA.”

Exel Europe later withdrew from the tender process and only HCA submitted a tender. UHCW selected HCA as preferred bidder in July 2010, before Exel began proceedings to block the deal.

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