The big case of 2013: Covanta v Merseyside Waste Disposal Authority

The High Court’s decision in October to grant Covanta an injunction suspending the procurement of a long-term high-value waste disposal contract could mark a turning point for procurement challenges in the UK. Up until now, the courts have been loath to grant injunctions, instead preferring to award damages to the unsuccessful bidder. The Covanta case may signify a change in approach or it may be a one-off decision dependent on its particular facts.

The facts were not that unusual. In 2006, Merseyside Waste Disposal Authority (MWDA) began a procurement process for a new waste disposal facility. The contract is expected to last 30–35 years and cost more than £1bn. Seven years of competitive dialogue later, MWDA appointed SITA as its preferred bidder. Covanta, the unsuccessful bidder, was surprised to find out that despite more than six years of competitive dialogue MWDA had given two out of the five key elements of Covanta’s tender zero marks and described them as ‘fundamentally unacceptable’. Covanta claimed that there were manifest errors in the procurement process and sought an injunction to prevent MWDA entering into the contract with SITA.

The procurement had been going on so long that the applicable rules were not Regulation 47G of the Public Contracts Regulations 2006 (as amended) (the automatic suspension remedy), but the usual American Cyanamid principles (named after the case that first set them out) for granting an injunction. In reality, the two sets of rules are similar so the same test applies…

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