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Government Bank Sale Tendering Dispute - High Court Ruling

Public tendering exercises almost inevitably leave unsuccessful bidders dissatisfied but the courts will only intervene if there is a legal flaw in the process. A consortium behind a failed bid to acquire a government-owned bank found that out when the High Court declared its complaints unarguable.

During the course of a tendering exercise, the Department for Business, Energy and Industrial Strategy had accepted a group of companies – but not the consortium – as preferred bidders for the bank. That status meant that the group would enjoy an exclusive period in which to negotiate with the Department.

In mounting a judicial review challenge to that decision, the consortium argued that the Department had been obliged to accept its offer, it having submitted the only tender that complied with the terms upon which offers were sought. The Department, however, took the view that, although none of the tenders was fully compliant, the group's offer was better and was more likely to satisfy the Government's objectives.

In rejecting the consortium's complaints as misconceived, the Court noted that the terms of the exercise were tailored to give maximum discretion to the Secretary of State. Whether or not the process might be considered unfair or unduly weighted in favour of the Government, the consortium had agreed to take part in it on the Department's terms. The challenge had not been launched promptly and the Court noted that, even if it had detected a legal error in the conduct of the process, it would have exercised its discretion to refuse relief to the consortium.

It is normally necessary to be careful to comply fully with tender terms. Many tenders fail because they do not adhere to the submission instructions and professional advice is useful to ensure compliance.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.