SITA UK seeks damages over failed Greater Manchester bid

Waste management giant SITA UK has initiated court proceedings against the Greater Manchester Waste Disposal Authority for allegedly breaching procurement rules in letting its £3.8 billion waste PFI contract.

The Authority is disappointed and surprised that SITA UK has commenced legal proceedings

John Bland, GMWDA

However, the GMWDA has expressed “disappointment” and “surprise” at the move – claiming that it is confident that everything was carried out in accordance with the law.

French-owned SITA UK – which was part of the consortium appointed as reserve bidder for the deal alongside the Royal Bank of Scotland and Peel Holdings – submitted a claim to the high court on August 27 claiming that the GMWDA failed to identify the “most economically advantageous” bid during the procurement process.

SITA UK also alleges that the authority failed to inform it of the characteristics and advantages of the successful bid from Viridor/Laing and that through its actions it breached its contract with the firm. The charges relate to the Public Services Contracts Regulation 1993 (regulation 21) and the Public Contracts Regulations 2006 (regulation 30) and the EU law obligation of fairness, equal treatment and transparency.

As a result, the company is seeking damages for not being awarded the contract and/or not being offered the chance to be awarded the contract and/or waste tender costs – with the value stipulated as “unlimited”.

While further details of the claim were absent from the claim form, a legal spokesperson for SITA UK claimed that the charges related to the fact that the costs of Viridor/Laing's bid allegedly rose and the project changed “significantly” since it was appointed preferred bidder and that despite this, SITA was not allowed to re-submit its bid.

The spokesperson said: “According to information released by the GMWDA when the PFI contract reached financial close on 8 April 2009, the cost of the PFI contract let to Viridor Laing (Greater Manchester) Limited was 15% more expensive than SITA UK's bid in 2007 and 25% more expensive than their original submission.

“It has also transpired that since the appointment of preferred bidder GMWDA agreed significant changes to the project. In our view SITA UK, as reserve bidder, should have been invited to submit a revised bid, which could have been fully assessed against the VL bid.

“We have sought reassurance from GMWDA that our bid was treated fairly, however the responses to requests for information have simply reinforced our concerns. Regrettably SITA UK has been left with no option other than to issue court proceedings”, the spokesperson added.


Commenting on the proceedings, John Bland, treasury and deputy clerk of the GMWDA – which handles waste disposal on behalf of the districts of Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside and Trafford – told that the Authority had used an evaluation matrix in its procurement process which all bidders were told about.

He explained that this was used to assess the relative merit of bids and included financial and commercial considerations, which were given a 40% weighting.

He said: “The Authority is disappointed and surprised that SITA UK has commenced legal proceedings but is confident that the contract has been awarded in accord with EU procurement law.”

Mr Bland stressed that good progress was still being made on development of facilities under the PFI deal and would continue to progress. Only last month, the Authority achieved planning consent for all 36 waste facilities (see story).

SITA UK will now be invited to submit evidence to the court in support of its claim. Further timescales will be dependent on the court.

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