Scottish Government loses ferry procurement challenge

Gurjit Degun
4 February 2014

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4 February 2014 | Gurjit Degun

The Scottish Government was wrong to dismiss an attempt by a supplier to challenge a contract award decision, a judge has ruled.

The case relates to a tender for ferry services from the Scottish mainland to Orkney and Shetland in 2011. The six-year contract advertised as worth between £150 million and £300 million was awarded to Serco instead of Shetland Line on 4 May 2012.

However Shetland Line claimed the government breached the Public Contracts (Scotland) Regulations 2006 which were in force at the time. The regulations say anyone seeking to challenge a decision to award a contract by a public authority must give notice that it intends to raise proceedings. The government gave Shetland until 14 May to do this.

Shetland Line served the summons on 11 May 2012 and sent two emails to the government earlier that day. The government said the emails did not “provide the requisite notice” so they should be dismissed.

The judge Lord Woolman said: “Upon receipt of the second email, no reasonable person could have been left in doubt about the pursuer’s intention. It stated that it was going to raise proceedings that afternoon in respect of the breaches set out in the first email.”

The judgement added that as the Scottish Government issued its decision letter on who the contract was awarded to immediately prior to a bank holiday weekend, it created a very tight deadline. “The pursuer only had four working days to evaluate matters,” Lord Woolman wrote.

“Against that background, the defenders knew or ought to have known that the pursuer would almost certainly not be in a position other than to provide bare notice. It had to act fast to avoid losing its right to seek reduction of the contract. That situation was the direct consequence of the defenders' actions.”

Lord Woolman therefore ruled that Shetland Line had complied with the notification requirement. The case will now proceed to a further hearing.

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