Page last updated at 20:33 GMT, Monday, 22 February 2010

Legal row over Norwich City Council contract

A court has imposed an injunction on Norwich City Council over a multi-million contract alleged to have been awarded to an "abnormally low" bid.

High Court action has been taken by Morrison Facilities Services which bid £23m for a building maintenance contract last year.

Morrison was beaten by Connaught which bid £17.5m.

An injunction stops the contract being awarded, and the council said it would comment in detail after the judgement.

Morrison asked Mr Justice Arnold to impose an interim injunction preventing Connaught being awarded the contract until a five-day High Court hearing which will resolve the dispute in the summer.

There was a failure on the part of the council to address properly the question of whether Connaught's was an abnormally low tender
Nigel Giffin QC, for Morrison

A judgement on the council's Housing Services building maintenance contract is expected by the end of June.

Mr Justice Arnold said that Morrison had a "seriously arguable" case that Connaught's bid was "abnormally low" and the council had not properly investigated it.

Granting the injunction, he rejected arguments made on behalf of the council that, if the High Court eventually finds in favour of Morrison, the company can be "adequately remedied" by a payment of damages.

'Abnormally low'

The local authority estimates that it will cost it £1m-a-month to find a replacement service provider while the injunction is in place.

Nigel Giffin QC, for Morrison, told Mr Justice Arnold that Connaught's tender was "abnormally low" and the council had failed to properly investigate how it could be delivered.

Connaught's bid, said Mr Giffin, was at least 25% to 33% lower than all the other tenders in the process.

"We say that a number of things have gone wrong," he said.

"There was a failure on the part of the council to address properly the question of whether Connaught's was an abnormally low tender."

Philip Hyde, head of legal services for Norwich City Council, said: "Naturally the council is disappointed the court saw fit to grant the application for an injunction against the award of the council housing repairs, maintenance and improvement contract.

"We are, however, pleased that the application for an injunction against the award of the contract for the waste, refuse and recycling service was withdrawn.

"We will now be carefully considering the details of the judgment before commenting further."



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