The art of maintaining good relationships through procurement disputes

With the value of good relationships in business being paramount, it can be a difficult decision to challenge an organisation with which you have years of good-standing with. So when our client lost several bids for the renewal of its contract, it reluctantly looked for an expert opinion on the merits of such a challenge.

In pursuant of the Public Contracts Regulations (PCR), the UK arm of a US-based group of technology companies had bid to provide IT and telecommunications services to a central government body. Spanning four different lots with the combined contract value of £2m, this opportunity was a key focus for our client, which has provided services to the contracting authority for several years.

When it failed to win any of the four lots within the contract, the company looked to Harrison Clark Rickerbys to obtain a view on whether there was merit in pursuing a formal challenge to the decision to award the contract to another bidder. And it needed that view quickly, as procurement challenges operate on very short time limits, sometimes requiring legal proceedings to be issued within as little as 10 days.

Our vast experience of procurement processes and the IT/telecommunications industry helped us act on this rapid response. We examined, in detail, the processes followed and the outcome of the evaluation. With little information about the successful parties’ bid to act on, we issued robust correspondence to obtain the reasons why our client had not scored more favourably on certain elements.  This, along with our knowledge of the PCR, enabled us to identify weaknesses in the bid process, but not weak enough to warrant challenge given passage of time.

We pursued another angle, and by combining our own legal/technical/industry knowledge with the technical expertise of the client, we identified areas of the bid where the contracting authority had categorically not given sufficient credit to our client during the evaluation process. Our approach and sector experience meant we could successfully pitch various elements on our advice to the appropriate audiences, including UK legal counsel, UK technical teams, and the US management board. Based on this, we issued proceedings to prevent the award of the contract.

At this point, the US parent company’s budget and policy constraints limited the UK arm from continuing pursuit of the legal proceedings. We were now faced with a sticky situation, where our client had challenged the contracting authority on its decision, withdrawn its challenge, and potentially damaged a business relationship. This needed repairing, and we needed to find an alternative way in which our client could maximise on its opportunities for future business potential.

Options are limited in this context, the PCR makes it impossible to do deals in the same way as in other commercial disputes, but our technical knowledge of the sector and our pragmatic approach to proceedings enabled our client to preserve its historically strong relationship with the contracting authority. So whilst the initial challenge did not come to fruition, it also didn’t harm the bond between these two organisations, and even secured our client’s input to enhance future alternative bidding opportunities.