Elekta Limited v The Common Services Agency, 21 June 2011
Outer House case concerning the procurement of radio therapy equipment (with an estimated value of around £21m) for cancer centres in Scotland.

Elekta, which produced radio therapy equipment, complained that the Common Services Agency (also known as NHS National Services Scotland), which was responsible for procuring the equipment, had effectively excluded them from bidding by specifying criteria which could only be met by one tenderer.  Four out of the five cancer centres in Scotland had a system manufactured by Varian and the Agency specified that the equipment would have to integrate with the Varian system. However, Elekta argued that Varian system was not compatible with those of other suppliers meaning that everyone other than Varian was excluded from bidding.

The effect of Elekta raising the proceedings (in terms of the Public Contract (Scotland) Regulations 2006) was to prevent the Common Services Agency from entering the contract with Varian and the Agency applied for an interim order bringing that prohibition to an end.

After considering the authorities, Lord Glennie laid down a number of points:

• the contracting authority must be entitled to decide upon the functional requirements it wishes to satisfy;

• the fact that the criteria included in the tender notice can only be met by one tenderer, or a limited range of tenderers, does not of itself contravene the principle of equality;

• the inclusion of these criteria can only be considered discriminatory if they cannot be justified objectively having regard to the characteristics of the contract and the needs of the contracting authority.

Lord Glennie noted that Elektra had not argued that the criteria were not objectively justified and pointed out that there a number of possible justifications for the decision such as the cost, disruption and potential teething problems involved in replacing one system with another.

Elekta also referred to the fact that the Agency had followed an open procedure (under regulation 15 of the procurement regulations) rather than the negotiated procedure (under regulation 14) arguing that, if it chose to follow the open procedure, it had a duty to frame the criteria in such a way that allowed a range of tenderers to bid. However, Lord Glennie said that, whilst it may have been that the Agency could have used the negotiated procedure, it did not follow that, by going down the route of the open procedure, it had to remove criteria which it regarded as essential to define its requirements (i.e. that the system could integrate with the Varian system).

In addition, Elekta complained that the criteria requiring integration with the Varian system had also been applied to the one cancer centre which did not already have Varian equipment. However, Lord Glennie also found that there was no merit in this point. The contracting authority was entitled to decide what its procurement requirements were and how to frame them.  It could properly decide (on the basis of objectively justifiable criteria) that there should be a sole tenderer to provide equipment across the five centres.

Lord Glennie was not asked to dismiss Elekta’s action but found its case to be a very weak one which had no reasonable prospect of success. As such, an interim order was granted removing the prohibition on the Agency contacting with Varian.