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Transport Scotland heads to court over tender claims

A £3.5 million case against Scottish ministers will be heard in Edinburgh's Court of Session next month, when a Portsmouth road-gritting company sues Transport Scotland (TS) for alleged breaches of procurement law.

The case, to be heard before Lord Woolman from May 6-20, concerns TS's alleged failure to put out to public tender a contract to supply road salt to counter the harsh winters of 2009-10 and 2010-11.

Nationwide Gritting Services (NGS) claims that, as a result of the alleged breach of the 2006 Public Contracts (Scotland) Regulations, it was the only major gritting company in the UK not to supply Scotland with salt in the years in question. It claims that this lost opportunity cost it £3.5m in revenues, advantaged its competitors, and resulted in Scotland overpaying for the product by as much as £5m.

The setting of a court date itself represents a defeat for TS's lawyers, who tried and failed to have the case dismissed on a technicality. The agency argued that NGS had failed to make its complaint within a required three-month time period following the discovery of the alleged damage.

However, the judge criticised Transport Scotland's failure to provide clear and timely responses to NGS's urgent requests for clarity on the sources of its salt stocks and the lawfulness of its procurement process, especially given the quango's subsequent claim that NGS "ought to have suspected that TS had obtained supplies of salt from elsewhere". TS has claimed that NGS should have made its complaint despite its own failure to provide information on the salient points.

This line of argument was rejected by Woolman, who upheld NGS's claim that Transport Scotland had "breached its duty of transparency" in providing information in response to a challenge, and that the Scottish bureaucrats had "drip fed" information about contracts to NGS.

TS's more substantive defence is that it was entitled to enter contracts without a competitive tendering procedure, including publication in the Official Journal of the European Union (OJEU), as it was exercising an exemption based on "the extreme urgency of the [weather] situation".

A spokesman for NGS told the Sunday Herald: "We are confident this is worth our while. It will cost us about £750,000 to pursue the case, but we believe in fair competition. Things shouldn't be happening behind the scenes where public money is concerned. We want to be part of a fair process and every other commercial company wants to be part of that.

"There needs to be transparency and accountability in public procurement, which won't happen if everyone shies away from pursuing [cases like this]."

NGS more than trebled the amount it was attempting to recover from the Scottish taxpayer last year. The company was previously under the impression that TS had bought only 25,900 tonnes of salt from Ineos's Runcorn outlet during 2010 and 2011 for around £1.5m. It later learned that TS paid £570,000 to Ineos for salt bought in January 2010 before the agency and its contractors spent a further £9.7m on the product during the winter of 2010-11.

A spokesman for Transport Scotland said: "We intend to robustly defend our position, but at the moment it would be inappropriate to comment or speculate further."

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