Lancashire Care NHS Foundation Trust and Blackpool Teaching Hospitals NHS Foundation Trust(the “Claimants”) are two local NHS Foundation Trusts and were the providers of a caring service which Lancashire CC (the “Defendant”) was in the process of re-tendering for. The Claimants and Virgin Care Services Limited (“Virgin”) were the only bidders for the new contract. Virgin were the successful party and the Claimants alleged that the decision to award the contract to Virgin was unlawful and should be set aside. 

The key question for the Court was whether the tender process complied with the principles of procurement law; namely, that the procedure was transparent, provided for equal treatment and meant that comprehensible reasons could be provided for the body’s decision to award the contract to the winning bidder. 

When considering the facts, the Court relied upon the case of American Cyanamid Co. v Ethicon Ltd [1975] AC 396 in considering whether to lift the suspension of the contract award paying particular attention to: (1) whether there was a serious issue to be considered; (2) whether damages would be an adequate remedy for either party; and (3) where the ‘balance of convenience’ lied. 

During the judgment, the court did not spend long considering the first stage of the American Cyanamid test as the defendant had conceded that there was an issue to be tried but Fraser J did decide that damages would not be an adequate remedy for the claimant. He went on to conclude that the balance of convenience lay “overwhelmingly in the Trusts favour”. Therefore, the Contract with Virgin was set aside. 

The case underlines the importance for public bodies to properly account for the decisions made throughout the tender process. When questioned, the public body will need to provide clear evidence demonstrating that decisions were made following an agreed and compliant decision-making process.