Procurement Act 2023: ParkingEye and contract suspension tests
“to respond to unlawfulness in the procurement process by an award of damages is to divert public funds from the services for which they are allocated … and to impose on the contracting authority a double cost” (Para 62.). The recent interim hearing of Parkingeye Ltd v Velindre University NHS Trust [2026] EWHC 1019 (TCC) (Parkingeye) tested new provisions in the Procurement Act 2023 for suspending or allowing the contract award before a full hearing. By applying the new provisions in the Procurement Act 2023, the court determined it was not in the public interest in this case to consider damages as an appropriate remedy and therefore continued the suspension. “Under that former test, the public interest was considered only after the second stage of that test (adequacy of damages for the claimant) …. that is no longer the case.” (Para. 30)
Background
Public procurement case law frequently led to a public body continuing with the award of a tendered contract pending the outcome of a procurement dispute claim, since damages would be an adequate remedy for the claimant. Therefore, a public body might pay twice for the contract, once to the successful tenderer under the awarded contract and later if the case was lost, a further payment to the claimant in damages for the lost contract.
The case sets out the change of position from the Public Contract Regulations 2015 which has been superseded by the Procurement Act 2023 in paras 18, 23 and 24. This case was identified by the parties as the first to consider and apply the new legislative wording in this situation.
The new test
A summary of the 5 part test is given in para. 36 of the judgement and briefly covered below:
To balance the public interest and the interests of suppliers, including the claimant, along with any other matters the court thinks appropriate
The court decides the weight of the factors in each case.
(i) Damages for the claimant, remains a factor but without applying the previous significance under the American Cyanamid test;
(ii) Applying the S102(2)(a)(i) public interest in awarding contracts lawfully so that the contract should not be awarded until the dispute has been determined;
(iii) Applying the S102(2)(a)(ii) public interest regarding the continuing provision of goods and services rather than merely the contracting authority’s judgment for the preferred bidderLifting the suspension will generally require the presence of either a very persuasive countervailing public interest or some overriding matter of private interest
Provision of an undertaking by the claimant is also a factor in deciding where the balance lies and the undertaking ought to be in the form found in the standard orders for interim injunctions
Factors to consider
Public interest
At para. 31 this Section is interpreted as being for the courts to consider “a public interest that, where the lawfulness of an award of a contract is disputed, the contract should not be awarded until that dispute has been determined”. As a result of this clause, the case introduces a new weight to considering the public interest in awarding contracts lawfully. It also sets out how the courts approach the balance so that “the public interest will generally tend in favour of keeping the suspension in place, although on the facts of particular cases it may weigh differently.” This indicates a departure from considering if damages are an adequate remedy to, are there any factors to indicate a suspension should not remain in place?
Para. 31 “the court must assess the weight of the public interest in the prompt delivery of additional or improved services”. While benefits under the new contract do form part of public interest considerations, they form a balance of factors and the following were considered within the Parkingeye case:
Are the services continuing?
Is there evidence there would be an absence of public services through delays or interruption?
Has there been a delay in the procurement or previous extension of the existing services?
In this case delays in commencing the procurement and slippage in the procurement timeline were also considered as factors in determining the strength of the public interest argument in continuing with suspension or allowing the contract award
The level of benefit to be achieved by lifting the suspension? To be assessed in two parts:
a) are the benefits from the new specification modest in comparison to the whole?
b) can the benefits of the new contract largely be achieved while the suspension remains in place?The delay in award and risk of challenge to any extension as a result, was given little weight in the balance of factors in this case
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Supplier interests
The court will consider the claimants evidence for their commercial interests, for example in reference to loss of chance and loss of reputation
A successful bidder could provide evidence for the court to make a case for prompt award of the contract an overriding consideration
S102(2)(b) could also extend to the court considering other bidders and suppliers who did not bid but could have done so but for the issues with the procurement.
Other relevant factors
Weight to be given to the benefits the public body claims will be delivered under the new contract in comparison with the services provided under the existing contract
The Section 12 procurement objectives (para. 27)
Litigation timetable and conduct of the litigation
The likely future litigation timeline until the full hearing to decide the case and whether the case involves vital interests (such as defence or security) or the continued supply of public services is under threat
An undertaking by the claimant to pay damages incurred by the respondent and successful bidder as a result of the suspension
Conclusion & how we can help
For public bodies the process of successfully resisting a suspension decision begins during the procurement planning and the procurement. Documents created both during the planning of the procurement, the invitation to tender documents and evaluation documents provide the evidence which forms part of the factors considered by the court.
Contracting Authorities should consider the approach taken by the court in applying the test under the Procurement Act 2023 together with the balance of factors considered in the Parkingeye case and ensure they can sufficiently evidence these factors in seeking to continue with a disputed contract award.
This may also include engagement with and representation from the successful bidder, so the courts can consider appropriate factors and weight to be given to the supplier’s commercial interests in securing the contract award.
For further advice for your organisation on public sector procurements or for a review of tender documents or your public procurement processes, contact Jennifer Andrews or another member of our Public Sector team or sign up for updates.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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