A Reported £1.25m Pay Out in a Procurement Arbitration

Following a procurement process for a furniture contract the Welsh government found themselves subject to a challenge by an unsuccessful supplier, Triumph Furniture. Welsh Government permanent secretary Sir Derek Jones explained “This was a large procurement, decided on some very narrow margins in favour of one tenderer, and so the contract was awarded. A disappointed tenderer challenged the judgement, the Welsh Government initially defended the allocation but subsequently received legal advice that the cost of continuing to defend the action taken with the prospects of success were such that it would be better to enter formal arbitration with the claimant, which was done. This is a compensation payment under a court order, following the arbitration.” Sir Derek added that the dispute had been avoidable and arose in part from “poor record keeping and some ill-judged naïve administration”.

Whilst this procurement was probably larger in value than many of our members regularly purchase, however it’s a useful reminder to ensure to proper records of procurement processes are kept, in particularly during the evaluation process, and to ensure those involved in the process are aware of the regulations that apply.

For more information on record keeping and procurement regulations check FELP or contact your CPC Regional Procurement Advisor who would be happy to visit you and provide more information.