BT sues NHS Scotland for £20m damages after losing network contract bid

BT is suing NHS Scotland for damages over the £110 million Scottish Wide Area Network (SWAN) contract, after losing in its bid to force a re-run of the procurement process.

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BT is suing NHS Scotland for damages over the £110 million Scottish Wide Area Network (SWAN) contract, after losing in its bid to force a re-run of the procurement process.

The telecoms giant had recently taken NHS Scotland to court over what it claims was a “flawed” tender process for a six-year contract that would have enabled councils and NHS bodies in Scotland to share information more easily. The judge, Lord Malcolm, yesterday ruled in favour of procurement body NHS National Services Scotland (NSS), allowing it to award the contract to be awarded to be the preferred bidder, understood to be a partnership of Capita and Updata.

However, BT is now claiming up to £20 million in damages.

“BT has chosen not to appeal Lord Malcolm’s decision to lift the suspension [on the contract award]. We are pleased that Lord Malcolm, following the hearing in January, found in our favour with respect to the primary argument and agreed that the procurement regulations had been breached by NHS NSS,” the telco said.

“Though BT’s primary aim was always to seek a re-run of the procurement process, the case will now proceed as a damages claim, Lord Malcolm having found damages to be an appropriate remedy for BT to seek for that breach.”

BT added: “We believe that it will now be unclear whether the most economically advantageous tender will be awarded. We believe our proposal offered excellent value and minimal risk to Scottish taxpayers. Our bid was more than £10 million below the price for which maximum points could be awarded under the NSS scoring process.”

The telecoms company began legal action before the preferred bidder was announced. Cable & Wireless with Virgin Media Business were also in the running for the contract.

BT has been arguing that the tender process did not ensure that the contract was awarded on the basis of the most economically advantageous bid, in accordance with regulations.

NSS maintains that the process was “fair, robust and thorough”, and said that cheapest was not necessarily best.

"The best product for any given job is not necessarily the cheapest. Price was just one element in deciding the best bid. The other factors we scored were technical standards, performance and commercial and legal aspects. Each element was approximately 33 percent of the total score available," it said.  

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