Comhairle nan Eilean Siar will have to pay out at least £20,000 in public cash to cover a local contractor’s expenses after losing a court case over a gritting contract.
In a case pursued by Duncan Mackay & Sons, the Comhairle‘s tendering process for the South Lochs gritting contract was questioned and Sheriff David Sutherland ruled completely in the contractor’s favour leaving the council facing a large bill for legal charges.
The Comhairle will have to cover the expenses incurred by Duncan Mackay & Sons which included the employment of junior counsel due to the specialised knowledge required.
The dispute centres on the Comhairle’s award of the contract in November 2011 to a sole trader who did not meet the criteria set out in the original document. The Comhairle then backtracked and said the name had appeared in error as the successful tender and should in fact have been named as a company in which the sole trader was a director.
Sheriff Sutherland noted in this ruling that he found it ‘strange that a local authority well versed in the award of public contracts, would not be able to differentiate between someone who describes his organisation as a sole trader and an organisation such as a partnership or limited company.’
He also stated that ‘the council solicitors had known by 25 October 2011 that there could be no contract’ with the sole trader ‘yet they proceeded necessitating the pursuers raising an action with all its costs’.
In response to the judgement a spokesperson for the Comhairle said they did not know at this stage how much money the case would cost them.
In fact a counter action by the contractors is now the subject of a further case in court.
The Comhairle spokesperson said: “The Comhairle notes the Sheriff’s judgement. It is important to recognize that the Comhairle strove to ensure the award of this vital service was awarded on the basis of the lowest price and best quality. In doing so the Comhairle relied upon the terms of the tenders submitted and statements made by the tenderer.
A second action in relation to this matter continues. The parties are discussing how best to resolve this matter.”
This is not the first time the Comhairle have been criticised for their tendering processes or the first time they have had to pay out due to lost legal cases over tendering. In March 2011, the agreed an out of court settlement of around £250,000 to a contractor over a gritting contract. In 2010 they paid another sum out to a local firm who missed out on the accountancy contract for the Comhairle’s arms-length body Sgoiltean Ura.
Electrical contractor Iain Crichton spent more than 10 years fighting the Comhairle over a street lighting contract. He eventually received compensation.
Just recently the Comhairle were criticised for omitting a performance bond from the Harris House contract with UBC Group who subsequently went into administration. A performance bond would have offered some protection to the local authority and was submitted by all other contractors bidding for the work.
In another legal case not linked to tendering, the Comhairle were forced to cover Stornoway Golf Club’s expenses on behalf of the Western Isles Licensing Board after they refused to grant a seven day licence to the Club.
The contract for the gritting in South Lochs has still not been awarded and the Comhairle spokesperson added that they would consider all options in order to ensure delivery of this service to the public reflecting Best Value.