Not Just Sheep and Rugby: £99m contract extension could still be challenged

by DOUGLAS SHEPHERD

Scottish Borders Council received 'notes of interest' from ten separate companies after announcing its intention to controversially hand IT giants CGI a multi-million pound contract extension until 2040 without inviting competitive bids.

The information together with opinions from senior council officers on the likelihood of a legal challenge is contained in confidential documents released by the local authority in response to a Freedom of Information request.

The papers also show SBC sought advice from specialist lawyers before councillors, by a majority, rubber-stamped the massive deal last September.

However, it is revealed: "There remains a residual risk of challenge for a six month period from the date the VEAT notice was published [September 7th 2020], and the courts could consider the council's actions were unlawful were the original notice considered not to have been clear".

The so-called VEAT (Voluntary Ex Ante Transparency) notice set out the reasoning behind the proposed contract extension without opening up the IT work to CGI's competitors.

This is the SBC explanation in full: "The original City of Edinburgh contract award notice, 2014/S 024-038205, noted the scope of ICT Services to be delivered as including all ICT services presently delivered, those contemplated to be delivered by 2016 and all future ICT requirements of the City of Edinburgh Council and the contracting authorities named in the original Contract Notice.

"It further noted a requirement for a contract which is sufficiently flexible and scalable so as to provide a long-term resolution that offers significant future-proofing. The estimated value excluding VAT was noted to be in the range: between 150 000 000 and 2 000 000 000 GBP.

"Scottish Borders Council is one of three of the named authorities currently contracted pursuant to the arrangements awarded under 2014/S024-038205 with an overall anticipated spend well within the value range notified to the market in 2014 (SBC substantive contract awarded 2016 for a period of 13 years with optional 6 year extension and a likely spend of 179m GBP) such that the additional scope and spend remains an application of the original terms within the scope of the original contract notice. This ensures the requirements of EC Directive 2004/18/C as incorporated into Scots Law by the Public Contracts (Scotland) Regulations 2015 are met."

The reports considered by Borders councillors in private warned: "Any challenge to the award is likely to emerge during the VEAT notice period. There are residual risks of challenge where the notice was not clear or the courts consider the award was in fact unlawful. Longstop date: six months from the date of the VEAT notice".

So technically an objection or challenge could be lodged before March 7th 2021.

The legal and procurement issues were set out again in a follow up report presented to councillors on September 25th, the day the final decision to finalise the deal was taken.

In a reference to the publication of the VEAT notice the report states: "This notice attracted notes of interest from ten companies over the ten-day initial test period, and three media enquiries. No challenges were raised to the proposed extension.

"This provides a basis to proceed with confidence while noting that risk of future challenge has not been removed altogether by the VEAT process."

The council had obtained external legal advice from commercial law firm MacRoberts in a bid to ensure what was being proposed was not ultra vires [beyond legal powers].

MacRoberts had also reviewed the drafting of the VEAT notice.

And the report states: "The advice from MacRoberts concluded that the proposed extension is 'not considerable' within the context of the original OJEU [Official Journal of the European Union] notice issued by City of Edinburgh Council".

The complete collection of documents released by the council can be accessed via these links:

Not Just Sheep and Rugby

Sunday 17 January 2021

£99m contract extension could still be challenged

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