Mid Ulster company FP McCann unfairly denied £100m contract

FP McCann unfairly denied �100m contract
FP McCann unfairly denied �100m contract

Stormont’s Department for Regional Development breached public contract regulations in rejecting a tender from Mid Ulster company FP McCann for a motorway contract worth up to £100 million, a High Court judge ruled last week.

Mr Justice Colton backed the construction company in a legal action it brought after failing to land the deal to design and build the A8 dual carriageway between Belfast and Larne - despite submitting the lowest bid.

With the Department also held to be in breach of a duty to the firm, compensation will be assessed at a later date.

FP McCann issued proceedings over the tender for the work it submitted in 2009 as part of a joint venture with Balfour Beatty in a public procurement process run by DRD’s Road Service.

The consortium, referred to as BBMC, did not secure the contract on the grounds that it had submitted an abnormally low tender, the court heard.

The contract for the A8 project featured two phases. A consultant who designed the new road would progressing it through to a public inquiry, and then become the contractor subject to the agreement of a target cost.

The contract had an estimated value of between £80m and £100m, and was to be awarded on the basis of the most economically advantageous tender.

During the procurement process a Commercial Evaluation Panel (CEP) appointed by the Department concluded that the BBMC’s bid was abnormally low, that there was a risk BBMC and Roads Service would not be able to agree a target price and that the project would stall.

In December 2009 Road Service decided Lagan Ferrovial Costan Consortium should be the successful bidder.

Based on all the evidence in the case, Mr Justice Colton identified a number of concerns about the tender process. They included:

:: Isues expressly excluded from contributing to the recommendation may in fact have factored in the decision to reject the plaintiff’s bid.

:: BBMC was not given the opportunity to explain matters which ultimately contributed to the decision to reject its tender.

:: The Department failed to comply with its obligation to verify the offer or parts of the offer which were allegedly abnormally low.

Following evidence that the rate quoted by FP McCann was sustainable, the judge said this confirmed his view that there were significant flaws in the process of assessing the plaintiff’s tender.

He ruled: “These concerns lead me to the view that there has been a clear breach of duty by the defendant in respect of its consideration of the BBMC bid and specifically a breach of Regulation 30 (of the Public Contracts Regulations 2006).

“I consider that if these matters had been properly dealt with there was a significant chance that the decision in this case would have been different.”

With no option to set aside the award of the contract, Mr Justice Colton held that the plaintiff is entitled to an award of damages for losses suffered due to the breaches.

Adjourning the case for further submissions in assessing the scale of payout, he added: “The defendant’s breach of duty should be marked by a meaningful award to reflect the loss of opportunity to the plaintiff to be awarded a significant and potentially lucrative contract.”