Following a hearing in Manchester, the council was ordered just over a week ago (January 15) to pay a yet-to-be-determined amount to EWC after the company claimed its tender for the contract was £3.35 million cheaper than SITA UK's successful bid.
It's been a two year battle, but we're delighted to have been vindicated
Bill Edwards, executive chairman, EWC
The contract was awarded in November 2007 and began in April 2008. It involves the management of 21 of the council's 23 civic amenity sites for an initial three years – with the potential for a two year extension.
With the value of the contract thought to be around £35 million, local media reports have suggested that the bill for damages could be worth several millions of pounds.
In its claim, which was made under the Public Contracts Regulations 2006, EWC also argued that its bid was more environmentally-friendly and guaranteed a higher percentage recycling rate than any other bidder.
The ruling made by Judge Hegarty was welcomed by EWC's executive chairman, Bill Edwards, who highlighted just how important it would have been for his company to secure the contract.
“From the outset, all we have asked is that each operator be treated equally,” he said. “The very size and location of this contract made it a significant opportunity for EWC and would have safeguarded the future of our 450-strong workforce.”
He added: “It's been a two year battle, but we're delighted to have been vindicated.”
Jonathan Berkson, head of the commercial litigation team at the Liverpool office of lawyers Hill Dickinson, who acted on behalf of EWC in the case, claimed the case was significant for contract procurement processes as a whole.
“When a more expensive tender is chosen, questions are always raised over the tender process,” he said. “This is a landmark decision for EWC and sends out a clear signal to councils that tender processes must be transparent and judged on the criteria set out within the tender.”
Lancashire
However, Lancashire county council expressed its disappointment with the judge's decision to award damages to EWC, claiming that the majority of the judge's conclusions had found in its favour rather than the company's.
Jo Turton, executive director for the environment at the council, said: “The council is very disappointed by the judgement in this case. In his conclusions Judge Hegarty found in almost all respects in favour of the council.
“In particular he found that EWC's challenge to the detailed assessment of their bid had failed and no serious or manifest error had occurred. In particular Judge Hegarty stated that 'in all the circumstances, I reject any allegation of bias or conscious or sub-conscious partisanship in the assessment of the rival bids,” she added.
And, she said that, in light of the aspect of the case that the council had lost on, it was now “highly likely” to appeal.
“The issue on which the council appears to have lost is that it took into account the financial standing of EWC and it should not have done so,” she said.
“Based on this, it is difficult to understand the Judge's decision and it is therefore highly likely that the council will appeal the decision,” she added.
EWC
News that the council could appeal the decision was greeted with surprise by EWC, with Mr Edwards telling letsrecycle.com that “we have got more to appeal about than they have”.
In particular, he claimed that, if the two-year extension for the deal was awarded to SITA, the council should be made liable for the full five years it runs, rather than the three years Judge Hegarty had ruled.
“The next process is to assess the damage to our business and claim for loss of profits,” he added, and claimed that, due to EWC losing out on a contract that was local to its headquarters, the contract award had damaged its reputation as well.
News of the ruling comes just days before a hearing expected to take place next week in relation to another legal dispute over a waste contract awarded in the North-West, as the Greater Manchester Waste Disposal Authority seeks to strike out SITA UK's attempt to secure damages over the procurement of the Authority's PFI-funded waste deal (see letsrecycle.com story).
SITA UK
A spokesman for SITA UK said: “We have exceeded all performance criteria on this contract to date and will continue to focus on delivering a high quality recycling service to residents across Lancashire.”
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