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10 March 2014 | Will Green
A court in Scotland has lifted a block on the award of a contract - potentially worth £325 million - to provide telecoms services to the nation’s entire public sector.
British Telecom (BT) had challenged the award of the Scottish Wide Area Network (SWAN) contract by NHS National Services Scotland on the basis the scoring methodology in the tender process was not transparent.
BT, the incumbent provider, had also asked the Court of Session for a re-run of the tender process or payment of £20 million damages.
However, while the judge in the case, Lord Malcolm, ruled there had been a breach of transparency regulations, he refused BT’s application to re-run the competition.
In a written judgement Lord Malcolm said: “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 am required 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.”
The SWAN contract has now been awarded to Capita with an initial value of £110 million but with the potential to rise to £325 million as more public bodies take up the contract.
BT said it would not appeal the judge’s decision.
“We are pleased that Lord Malcolm found in our favour with respect to the primary argument and agreed that the procurement regulations had been breached by NHS National Services Scotland," said a spokesman. "Though BT’s primary aim was always to seek a re-run of the procurement process, the case will now proceed as a damages claim.”
A spokesman for NHS National Services Scotland said: "We are pleased that we are now able to proceed with the contract award and get moving with the implementation of the Scottish Wide Area Network.”