Unlawful Award of Contract

The High Court has ruled that the Minister for the Cabinet Office, Michael Gove, broke the law by giving a contract to a market research company, Public First, who are run by long-time associates of his.

Facts

The Good Law Project (GLP) issued a judicial review of the Government’s decision to directly award a contract for the provision of focus group and communications support services (“the Contract”) to Public First in relation to the Government’s COVID-19 policy.

Public First is a public policy research agency run by James Frayne and Rachel Wolf, both of whom previously worked with Dominic Cummings (Boris Johnson’s former advisor) and Michael Gove.

The Contract was issued without tender under emergency provisions. It was awarded to Public First on 5 June 2020, with retrospective effect from 3 March 2020.

The GLP argued that the decision to award the £560,000 contract to Public First was tainted by apparent bias contrary to principles of public law due to the agency’s personal links with Dominic Cummings. They also argued that there was no basis for making a direct award under Regulation 32(2)(c) of the PCR 2015 and that the award of the Contract for a period of 6 months was disproportionate.

The Cabinet Office defended the decision to not undertake a competitive tender process by relying on 32(2)(c), which states that in matters of extreme urgency brought about by unforeseeable events, prior publication of the opportunity is not necessary and that the award of the contract for six months was not disproportionate due to the scale of the national emergency the COVID-19 pandemic presented. They refuted the allegation of bias and said the decision to award the Contract was based on expertise, experience and availability to undertake the required specialist services within the urgent timescales.

Issues

The issues for the Court to decide were as follows:

  • Whether the Defendant was entitled to rely on Regulation 32(2)(c) of the PCR 2015 to make a direct award of the Contract without competition.
  • Whether the award of the Contract for a period of six months disproportionate.
  • Whether the decision to award the Contract to Public First gave rise to apparent bias.

Held

Judgment was handed down on 9 June 2021, ruling that the decision to award the Contract to Public First gave rise to apparent bias and was unlawful.

With regard to GLP’s claims the judge found as follows:

Issue 1 – Defendant’s entitlement to rely on Regulation 32(2)(c)

The judge found that the conditions for making an award under Regulation 32(2)(c) were satisfied, and the Defendant was, therefore, entitled to award Public First the contract without a competitive tender. The reasons given were as follows:

  • The unforeseeable and extreme urgency caused by the COVID-19 pandemic.
  • The services performed under the Contract were required immediately to inform policy, strategy, and public communications in response to the pandemic.
  • It would not have been possible to comply with time limits for a conventional procurement given the timescales.
  • It was strictly necessary to procure the services under the Contract – failure to provide effective public health messaging would have put at risk the health of the public.

Issue 2 – Proportionality

The award of the Contract for a period of 6 months was not found to be a disproportionate for the reasons set out in relation to the first issue.

Issue 3 – Apparent bias 

The judge found that, whilst there was an urgent need for the services provided under the Contract such that Regulation 32(2)(c) could properly be used, the fair minded and informed observer could conclude that there was a real possibility that the decision-maker was biased, because of the Government’s failure to consider any other research agency.

Whilst the existence of personal connections between Dominic Cummings and the directors of Public First did not preclude Mr Cummings from making an impartial assessment, the existence of such connections might be perceived to compromise their impartiality and independence in a public procurement context.

Comment

This ruling is the second successful legal challenge brought by the GLP against the Government in respect of pandemic-related procurements, the first having been brought against the Secretary of State for Health and Social Care. Each has established that a Cabinet Minister – Matt Hancock and Michael Gove, respectively – acted unlawfully. The GLP has approximately a dozen further judicial reviews in the pipeline, so it will be very interesting to watch how these progress.

This case is a reminder to Contracting Authorities to guard against the appearance of (or actual) bias. A Contracting Authority will need to show that they approached the decision with an open mind, which can be done by:

  • Considering other providers, even in the context of a Regulation 32(2)(c) procurement.
  • Where there are personal connections, working within their Authority’s code of conduct with regards to declarations of interest, and keeping a clear paper trail of their contact and conduct; and
  • Providing training to staff (even up to Government Ministers) on issues of actual bias, apparent bias, and predetermination.

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email enquiries@sharpepritchard.co.uk

Posted in Latest news and blog, Procurement, Procurement challenges.