NATS (Services) Limited v Gatwick Airport Limited

19 Nov 2014

The Technology and Construction Court handed down an important judgment last week, on 12 November 2014, which provides a clear statement on the scope of a contracting authorities duties under the Utilities Contracts Regulations 2006 (and the Public Contracts Regulations 2006) in relation to abnormally low bids in the field of procurement and also serves as a cautionary tale in terms of the promptness required in pleading amendments in procurement litigation.

The context was an application on the part of GAL to strike out parts of NATS’ pleading in its claim brought in connection with the recent award by GAL of an air navigation services contract to DFS. One of the bases of NATS’ claim was that DFS’s bid was abnormally low and should have been rejected on that basis. The issue being whether that plea was good in law, a review of the case law concerning successive procurement Directives of, inter alia, the European Court of Justice led Mr Justice Akenhead to find that neither the Directives nor the implementing Regulations require a contracting authority or utility to determine whether a bid is abnormally low, nor is there any obligation on them to reject an abnormally low bid. Rather, the limit of the duty upon contracting authority or utility is that, where it does consider a bid to be abnormally low, it must afford the bidder an opportunity to explain itself before its bid can be rejected on those grounds. On that basis NATS’s claim that DFS’ bid should have been rejected as an abnormally low bid was struck out. The judge further struck out late amendments to the claim which threatened GAL’s ability to prepare properly for trial. Although not a novel situation in strike out applications, the judge considered as highly relevant to his discretion the particular features of procurement litigation in which time is of the essence.

Please click to view the full NATS (Services) Limited v Gatwick Airport Limited judgment.

Michael Bowsher QC, Rob Williams and Daisy Mackersie (instructed by Freshfield Bruckhaus Deringer) for the Defendant

Philip Moser QC (instructed by Simmons & Simmons LLP) for an Interested Party (DFS Deutsche Flugsicherung GMBH)

Anneli Howard acted for the CAA in their intervention pursuant to the Competition Law Practice Direction on disclosure and confidentiality issues.