- Wide margin of discretion for contracting authorities setting the terms of public procurement exercises (Stagecoach and others v Secretary of State for Transport)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Public Law analysis: The Secretary of State for Transport ran several public procurement exercises for train operating companies to bid for contracts to run rail franchises. The contract terms required the successful bidders to take on board uncertain and potentially very substantial pension liabilities, for which the government had previously been responsible. The terms of the tender permitted the Secretary of State to disqualify any non-compliant bids. A number of bidders, unwilling to take on the pensions liability, submitted bids which offered to contract on different terms. Their bids were duly disqualified, and they challenged their disqualifications. The High Court upheld the disqualifications, deciding that contracting authorities have a wide margin of discretion when deciding terms for a public procurement exercise. Moreover, a public tender does not have to specify all the different scenarios in which a bid will be judged non-compliant since a reasonable tenderer would understand what non-compliance meant in context. Written by Alexander Campbell, barrister, at Field Court Chambers.
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