West Sussex County Council will re-tender a 10-year highways maintenance contract awarded to Ringway following a High Court challenge by rival bidder Amey.
The council confirmed to Construction News that it had abandoned the existing deal, having awarded it to Ringway in February.
Ringway won the contract after scoring 85.48 in bidding, just 0.03 higher than Amey’s overall score.
Amey challenged the council’s decision at the High Court, claiming errors in the way the bids were scored.
Following the preliminary legal proceedings, Lord Justice Stuart Smith rejected the council’s calls to dismiss Amey’s claims and ordered a full litigation process to take place.
A West Sussex Council spokesman said: “Our priority in this case has always been to make sure we have the right contract in place to ensure our highways are maintained properly and to limit any unnecessary spending of taxpayers’ money.
“As a result, we have taken the decision to abandon the procurement process and start again, meaning that the legal challenge can be brought to an end.”
The council has decided to extend the contract of its current highways maintenance provider Balfour Beatty until at least the end of March 2019 – nine months later than originally planned.
Balfour Beatty Living Places have been the council’s supplier since 2011. It secured a £55m two-year extension in 2016, which was set to end in June 2018.
In the High Court claim, Amey alleged that it wrongly lost out on the new 10-year contract due to the council providing “unlawful instructions” during the tender process.
The claims revolved around the way in which the council had instructed Amey to cost local management staff.
Amey alleged the inclusion of these staff members in the final costs of its bid was wrong and resulted in the contractor being given a lower score.
The procurement was assessed 40 per cent on quality and 60 per cent on cost.
The contractor also claimed there were errors in the way the council had scored its drainage cleaning and winter service submissions.
According to Amey, the council had not properly considered the savings it would make in these areas, leading its score to be lower than expected.
In defence against the first allegation of “unlawful instructions”, the council said the complaints had been lodged by Amey after the deadline for any challenge.
The council said the deadline for any challenge was 19 February, and claimed Amey should not be granted any extension time.
The judge rejected these claims and said a decision not to grant an extension of time would be “sterile and unjust”.
On the second allegations relating to scoring errors, the council applied to strike out Amey’s claims that there were mistakes in its assessment of Amey’s drainage cleaning and winter service submissions.
The judge again rejected this, stating that the council’s understanding and interpretation of the savings was wrong and irrational, and led to errors in the way the score was awarded.
Construction News has contacted Amey and Ringway for comment.