Energy Solutions is entitled to recover damages from the Nuclear Decommissioning Authority
Energy Solutions is entitled to recover damages from the Nuclear Decommissioning Authority ("NDA") as a result of its breaches of the Public Contracts Regulations 2006
In our article dated 20 September 2016, we commented on the substantive Judgment that had been delivered by the High Court in July 2016 which held that the NDA had committed manifest errors in its procurement of a nuclear clean up contract worth in excess of £4 billion.
On 20 December 2016, the High Court delivered a further judgment in this ongoing litigation. His Honour Judge Fraser held that the NDA's failure to award Energy Solutions the contract, in circumstances where Energy Solutions was the most economically advantageous tenderer ("MEAT"), was sufficiently serious to entitle Energy Solutions to recover damages from the NDA.
The latest decision is the first delivered by a UK court which provides clarification on when an economic operator will be able to recover damages from a contracting authority that breaches the Public Contracts Regulations 2006 ("the Regulations") (since replaced by the Public Contracts Regulations 2015).
The Court stated, however, that whether a tender was MEAT, could only be determined once an analysis had been carried out on the various underlying breaches that were said to have been committed during the procurement process. The Court held that there had been two categories of breach within the evaluation carried out by the NDA in this case. The first concerned disqualification or threshold requirements ("the Disqualification Breaches") and the second concerned evaluation requirements ("the Evaluation Breaches").
Importantly, the Court concluded that the Disqualification Breaches were individually sufficiently serious to warrant an award of damages. For the Evaluation Breaches, the Court held that each of them could be sufficiently serious if their effect either individually or collectively would have changed the outcome of the procurement.
The decision in this case could still be affected by the ongoing appeal that NDA has made to the Supreme Court but this case provides useful guidance about how the UK Court will approach the question of damages where breaches of the Regulations have been established.