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Treasury faces lawsuit on national framework

A major fit-out contractor has launched a legal battle worth more than £11 million against Her Majesty’s Treasury, claiming it breached procurement regulations when tendering a major new nationwide framework.

In the claim – filed against the Treasury’s procurement arm OGC Buying Solutions – Amaryllis alleged the Government breached the Public Contracts Regulations when evaluating tenders from potential framework contractors last year for the supply and fit out of furnishings for a range of public sector bodies.

Contractors traditionally shy away from challenging public frameworks for fear of alienating major clients.

But it is believed this claim could, if successful, potentially set a precedent for similar action against public procurement flaws and, consequently, force the Government to keep a closer eye on its tendering process.

The Treasury tried to prevent the action being heard by the High Court, claiming Amaryllis had not provided written notice of its intention to bring legal proceedings and that it had also failed to start proceedings within the required three month time frame.

But the High Court has backed the contractor, suggesting the dispute may now see the inside of a courtroom.

The framework was tendered early last year and details published in the Official Journal of the European Union stated it would be divided into six lots – with Lot 1 being the largest and most valuable.

Amaryllis was informed late in March that it had been successful on Lots 3-5, but failed on Lots 1 and 6.

High Court judge Mr Justice Coulson said: “The claimant had had considerable experience of providing furniture to a range of UK public bodies, including a number of Ministries of State. As a result, it was very disappointed not to have been successful on the first stage of the process for Lot 1.”

He strongly criticised Government department for its behaviour in the row, claiming it had withheld information from Amaryllis despite continued requests for reasons regarding its failure in the tender process.

The judge said: “It is fair to compare the claimant’s speed of reaction during the relevant period (which I have concluded was prompt) with the defendant’s conduct during that period, which I have concluded was anything but prompt.”

Following its exclusion from the Lot 1 package, Amaryllis wrote to Buying Solutions to state it would not be tendering for the remaining lots.

It alleged its submission was “not assessed fairly and no consideration was given to its established history as the incumbent supplier”. The company – which fit out Heathrow’s Terminal 5 and lists the Department for Work and Pensions, British Airways and Her Majesty’s Revenue and Customs as some of its major clients – also claimed it had been completely unaware of the relative importance and weightings of the questions in the PQQ.

Papers later released by the Treasury revealed the claimant had failed on environmental issues, and there was also a reference to the lack of Forest Stewardship Council accreditation.

A spokeswoman for OGC Buying Solutions said: “As the litigation is ongoing, it is not appropriate for Buying Solutions to comment at this time.”

The dispute is expected to go to trial in July.

BASIS OF THE CLAIM: AMARYLLIS’S ARGUMENT

* Criteria and Weightings

The contractor complains that the defendant evaluated the PQQ responses without informing the tenderers of the relative importance it described to each question/topic, and maintains that this was also a breach of the principles of equal treatment and transparency. Mr Justice Coulson said: “On the face of it, this seems to me to be perhaps the strongest of the claimant’s criticisms: it is a bit like being required to do an exam without knowing what marks are available for any given question.”

* Environmental Management

Amaryllis makes a number of criticisms under this heading, including the allegation that the defendant failed to keep the claimant informed of the importance and weighting to be given to this issue and that, moreover, the marks awarded to the claimant were manifestly wrong.

* Business Activities

It complains that it was awarded zero for this section of the PQQ on the sole basis that it had bought in its products, rather than manufactured them itself. The firm claims there was a complete lack of transparency in relation to the importance of this issue. Again it is suggested that the marks awarded to the claims under this head were manifestly wrong.