NHS procurement award overturned

A £5m public contract award for the clinical waste management of several East Anglian NHS Trusts has been overturned in a High Court case.

Healthcare Environmental Services Limited (HES) asserted the contract award, given to SRCL, a US-owned clinical waste management company by the North of England Commercial Procurement Collaborative was unlawful and likely to be in breach of several regulations.

Our specialist lawyers acted for HES in the case which centred on several East Anglian NHS Trusts, including Queen Elizabeth Hospital King’s Lynn NHS Foundation Trust; James Paget University Hospital NHS Foundation Trust; Southend University Hospital NHS Trust; Colchester General Hospital University NHS Foundation Trust; and West Suffolk NHS Foundation Trust.

HES asserted that the contract award was unlawful and, furthermore, the tender proposal by SRCL was likely to breach the Waste (England & Wales) Regulations 2011, the Healthcare Waste Guidelines and the Hierarchy of Waste Guidelines. The NHS Trusts rejected HES’ assertions and indicated that they did not intend to review the contract award.

HES then issued proceedings in the Technology & Construction Court in London alleging that the procurement process was flawed and that the contract award made to SRCL on behalf of the NHS Trusts was legally invalid under the terms of the Public Contracts Regulations 2006.

Although the matter was initially heavily defended by the NHS Trusts, they all subsequently withdrew their defences to HES’ claim. Judgment was voluntarily entered in HES’ favour by each of the NHS Trusts. The contract award to SRCL was overturned. Each of the NHS Trusts agreed to pay HES damages in respect of its wasted tender costs as well as HES’ legal costs.

Commercial litigation partner Richard Moore and his team acted for HES. He said: “The action indicates that public bodies need to be certain they have made the right decisions before they award major contracts at the end of a regulated tender process. If there is a dispute, it needs to be dealt with quickly and openly by both sides. Failing to do so can lead to litigation which could otherwise be avoided at a time when public sector budgets are becoming increasingly tight.”

Our team comprised David Stedman, Edward Halden and James Marshall. The NHS Trusts were represented by the specialist procurement team at Hempsons Solicitors, an NHS panel firm.