High Court finds apparent bias in contract award decision

The High Court has found apparent bias on the part of the Government in respect of its award of a contract under the Public Contracts Regulations 2015 (the "PCR") for the provision of focus group and communication support services without public notice or competition during the early weeks of the Covid-19 pandemic (the "Contract") (R (The Good Law Project) v Minister for the Cabinet Office [2021] EWHC 1569).  The Court found that whilst there was no suggestion of actual bias, the steps taken by the Government in awarding the Contract fell short of the objective test for apparent bias.

Key Points:

• The test for apparent bias is whether the circumstances would lead a fair minded and informed observer to conclude that there was a real possibility or a real danger that the decision maker was biased.
• Evidence of personal or professional relationships between the contracting parties is insufficient to establish apparent bias, but it is a factor to be considered when assessing impartiality and independence in the context of public procurement.
• A claimant may have standing to challenge an individual procurement decision despite not being an economic operator if it has a sufficient interest in compliance with the public procurement regime in that it is affected in some identifiable way by the challenged decision, or the gravity of a departure from public law obligations justifies the grant of a public law remedy.

Background

The judicial review claim related to the award by the Cabinet Office of the Contract to Public First, a public policy research agency, in June 2020 with a retrospective effective date of 3 March 2020. The Contract arose incrementally when Public First, who had originally been engaged for a discrete unrelated task, were asked to redirect their planned focus group to conduct Covid-19 research and carry out further work in response to demand caused by unforeseen developments in the pandemic.

Regulation 26 of the PCR establishes the general rule that there must be a competition for public contracts. Regulation 32 specifies that in certain circumstances contracting authorities may award public contracts without complying with the procurement procedures in the PCR. These circumstances include where, for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, the time limits for the procedures in the PCR cannot be complied with.

The claimant, the Good Law Project, sought judicial review on the basis of three grounds of challenge:

1. There was no basis for making a direct award of the Contract under regulation 32 of the PCR.
2. Even if the award of the Contract to Public First was lawful, the duration of the Contract (six months) was disproportionate to the immediate need in the given circumstances.
3. The decision to award the Contract to Public First gave rise to apparent bias, in breach of the principle of procedural fairness. The allegations of apparent bias cited "the longstanding and close personal and professional connections" between Public First's directors and owners, the Minister of the Cabinet Office, Dominic Cummings (the then Chief Adviser to the Prime Minster) and the Conservative Party, the lack of a competition despite the availability of other contract providers, and the high price of the Contract (£840,000) for six months' work.

Judgment

In respect of the first ground, the Court concluded that the Defendant was entitled to rely on regulation 32 of the PCR in awarding the Contract to Public First on account of the extreme and unforeseeable urgency caused by the Covid-19 pandemic which justified a departure from the usual procedural requirements and time limits.

The Court also dismissed the second ground that the Contract length was disproportionate. The Court noted that at the time no one could foresee the extent or duration of the pandemic, thereby creating a need for the greater flexibility achieved by a longer contract length.

On the third ground, the Court noted that the test for apparent bias is as set out in the Supreme Court decision of Porter v Magill [2002] 2 A.C. 357, which asks whether the "circumstances would lead a fair minded and informed observer to conclude that there was a real possibility, or a real danger […], that the [decision maker] was biased."

The Court acknowledged that, having regard to the specialised nature of the public policy and communications research industry, it was unsurprising that those involved might have developed professional and/or personal friendships over the years working within the government departments. It accepted that such acquaintanceships did not preclude Mr Cummings from making a lawful judgment, but stated that it was a factor to be considered in the circumstances surrounding his impartiality and independence in the context of public procurement. The court suggested that it was the fact that these circumstances existed that should have prompted the Government to take careful steps to remove suspicion of favourable treatment, by ensuring that there was a clear record of the objective criteria used to select Public First over other research agencies.

The Court concluded that the Defendant's failure to consider any other research agency by reference to experience, expertise, availability or capacity would lead a fair minded and informed observer to conclude that there was a real possibility that the decision maker was biased. The Court accordingly made a declaration that the decision to award the Contract to Public First gave rise to apparent bias and was unlawful.

Comment

The judgment in this case reiterates the objective test in Porter v Magill to consideration of allegations of apparent bias. Whilst extreme urgency (as a result of the pandemic or otherwise) can justify the need to act quickly when taking procurement decisions, there remains an overriding expectation that those decisions will adhere to fundamental public law principles. The High Court also referenced regulation 24 of the PCR, which is concerned with the avoidance of actual conflicts, as a useful indicator of the circumstances that might give rise to apparent bias. That provision refers to any situation where relevant staff members have, directly or indirectly, a financial, economic or other personal interest which might be perceived to compromise their impartiality and independence in the context of a procurement procedure.

The judgment is also of interest in that the Court found that the Good Law Project had standing to bring the judicial review, despite not being directly affected by the decision to award the Contract to Public First. The Court highlighted a number of points in favour of granting standing, including that: the Good Law Project had a genuine interest in promoting good public administration, where there had been no competition there was no unsuccessful bidder who might have challenged the Contract award, and the gravity of the issues raised justified scrutiny by the Court and the grant of a public law remedy. This decision will be seen as a helpful precedent for third parties with an interest in the award of contracts with a significant public interest.