The first judgment related to the Procurement Act 2023 (PA) was handed down on 1 May 2026, signalling a potentially significant shift in how Courts will determine whether or not to lift the automatic suspension on contract award during procurement litigation. 

Facts

Parkingeye is the incumbent provider of car park management services at numerous sites operated by the defendant NHS Trust and Health Board. Following a re-procurement exercise for the future provision of similar services for the defendants (estimated value £10m-£20m), Parkingeye was informed it was unsuccessful.

Parkingeye’s substantive claim relates to whether the procurement process and tender evaluation were conducted lawfully; the classification of the contract awarded (i.e. whether it was a concession contract or services contract); and erroneous contract values included the Tender Notice and Contract Award Notice. (These issues will be determined separately, if not settled in the meantime).

As Parkingeye issued its claim during the standstill period commenced on publication of the Contract Award Notice, an automatic suspension prevents the defendants from being able to award the contract to the successful bidder in the procurement.

This case concerns the test at section 102 PA; and, in particular, how the Courts determine whether to lift the automatic suspension (allowing the defendants to proceed with contract award); or maintain the suspension pending resolution of the substantive claim.

Reminder of the test under the Public Contracts Regulations 2015 (PCR)

Before exploring the Court’s approach in Parkingeye, it’s useful to add the context that under the PCR, suspensions on contract award were lifted in c.75% of cases. 

For procurements conducted pursuant to the PCR, Courts apply the American Cyanamid test and an essential aspect of this test is determining whether damages would be an adequate remedy for challengers (as opposed to winning the contract itself). Damages are often found to be an adequate remedy, and this factor trumps other considerations such as the public interest in ensuring that public contracts are awarded in accordance with the law. 

The test under the PA

Interestingly, in Parkingeye, the judge confirmed that the test under the PA is substantively different in both its method and effect from the PCR test. 

As the test currently stands (noting that it may be subject to appeal or clarification in subsequent cases):

1. while adequacy of damages will be considered by the Court, it no longer has the overriding significance it had under the PCR test;
2. the PA test requires the Court to balance the public interest in ensuring that public contracts are awarded in accordance with the law and interests of challengers, along with other matters the Court considers appropriate; and
3. the weight afforded to each factor is a matter for the Court in each particular case.

The judge commented that the public interest will generally tend in favour of keeping the suspension in place, although on the facts of particular cases it may weigh differently. He went on to say that this ensures proper weight is given to the public interest in ensuring public contracts are awarded in accordance with the law and that courts do not too lightly lift suspensions. 

Interestingly, the judge also commented that the public interest in lifting the suspension on contract award will concern provision of the services themselves, not who provides them. That is, if services are being provided already under an existing contract, the suspension will probably be maintained. However, if services are not being provided currently (i.e. because they relate to a new contract such as a first-generation outsourcing), the suspension will likely be lifted. 

In this case, as car park management services were already being provided by the challenger and not considered to be substantively different/materially less beneficial than those to be provided in the new contract, the suspension was maintained pending resolution of the substantive claim.

Takeaways

If the test remains this way, we could see a rise in procurement challenges from incumbents, now suspensions are more likely to be maintained. 

Challenges take time to be resolved in the Courts and services/works still need to be provided, so contract extensions will be necessary, particularly where the services/works being procured are not materially different to those already being provided by challengers. 

If this does happen, public bodies will be under more pressure to settle litigation so they can proceed with contract awards to new suppliers rather than enduring lengthy and expensive litigation.

Other points to note from the case are:

1. Cabinet Office guidance on the PA: Whilst the 48 guidance notes do not have statutory authority, they are considered capable of having persuasive authority, so should be read and considered when conducting procurements.
2. Importance of getting the information in notices correct: Amongst other issues, the challenge itself concerns the content of the Tender Notice and Contract Award Notices, e.g. that incorrect values, classification of the contract and details of contracting authorities were included. Whilst these may be subject to limitation issues, it is important that information in notices is correct to prevent mistakes being raised as potential challenge routes.
3. Awaiting judgments: We are still awaiting judgments on other areas of the PA such as the role of the section 12 objectives, the standard applied to evaluation and margin of discretion, modifications, refinement/modification of processes/award criteria, exclusion of suppliers, direct awards etc.

If you would like to discuss anything in this update, or any other aspect of public procurement law and the incoming changes, please contact Bradley Martin.