Key Contacts: Angelyn Rowan – Head of Construction | Patrick Kane – Partner | Kerri Crossen – Partner | Laura Mullen – Partner | Michael Cahill – Partner |
Introduction
Since the introduction of regulation 8(2) of the European Communities (Public Authorities’ Contracts) (Review Procedures) Regulations 2010 (“the Regulation”), the issuing of proceedings challenging the award of a tender has triggered the automatic suspension of the tender process, resulting in substantial delays as these challenges make their way through the court system.
To remedy this issue, regulation 8(A) of the Regulation was introduced to allow a party to a procurement challenge to apply to the court for an order lifting an automatic suspension.
Despite providing this remedy, the Regulation is silent with regard to the factors a court should consider in applications of this nature with regulation 8(2) providing:
“the Court shall consider whether, if Regulation 8(2)(a) were not applicable, it would be appropriate to grant an injunction restraining the contracting authority from entering into the contract”
The recent Commercial Court decision of Q-Park Ireland Ltd and Dublin Street Parking Services Ltd v Dublin City Council [2026] IEHC 552 provides some useful insight into factors a court may consider in an application to lift automatic suspensions, giving particular focus to undertakings, whereby the applicant enters a legally binding promise to cover certain costs associated with the challenge incurred by the successful tenderer in the event their challenge is unsuccessful.
Background
The case before the Court centred on a procurement competition tendered by Dublin City Council (“DCC”) for on-street parking enforcement services in Dublin. The contract, which had a value of approximately €51.2 million, was due to commence on 1 August 2026 for a term of five years.
An essential requirement of the tender was access to a suitable car pound. APCOA’s tender was submitted on the basis of a car pound which it held under an option to lease at a cost of €250,000 per year. The option to lease was set to expire on 30 September 2026, however, APCOA would not exercise that option until the contract with DCC was signed.
Two tenderers participated in the competition, Q-Park, the incumbent, and APCOA, who subsequently won the tender competition. Upon notification that their tender was unsuccessful, Q-Park commenced proceedings, triggering the automatic suspension of the contract’s award. DCC subsequently issued a motion seeking to have the automatic suspension lifted.
The Commercial Realities of the Suspension
Justice Twomey acknowledged that the issuing of proceedings to “challenge the tender process could lead to a continuation of the contract [Q-Park] lost in the tender process, for 2 years or more” (emphasis in original), with the commercial reality likely being that Q-Park, as the incumbent service provider, would gain financially from the proceedings irrespective of the outcome or indeed, the merits of their case.
Justice Twomey’s comments regarding the “commercial realities” of automatic suspensions in this case, echo his sentiments in his 2023 High Court judgment of CHC Ireland DAC v. Minister for Transport [2023] IEHC 457 (“CHC”). The Court of Appeal tempered those comments in the appeal of that decision saying that the scepticisms exhibited by the trial judge as to the motives of incumbent applicants in automatic suspension applications were “not an appropriate approach” and stated that “the fact that an applicant benefits from the automatic imposition of the suspension of the power to award the contract cannot be weighed against an applicant and in favour of a moving party on an application to lift the automatic suspension”.
Therefore, despite the scepticism exhibited in this judgment by Justice Twomey as to the benefits that might accrue to the incumbent by virtue of the automatic suspension, he did emphasise that the commercial consequences of the suspension were outside of Q-Park’s control and therefore did not form part of the Court’s assessment of the balance of convenience. What would be relevant, however, to the Court’s assessment was how Q-Park proposed to deal with the financial detriment facing the successful tenderer as a result of the suspension.
Importantly, despite APCOA being required to retain the car pound at a cost of €250,000 per annum to meet the tender requirements, in the event Q-Park’s challenge was unsuccessful, Q-Park did not offer an undertaking in this respect. Justice Twomey was highly critical of this, noting that without an undertaking from Q-Park, the rental cost of the property pending the outcome of Q-Park’s challenge would be “dead money” and an unanticipated cost for APCOA to bear regardless of the final outcome.
As such, Justice Twomey noted that “by asking this Court to continue the Suspension, for its financial benefit, [Q-Park] is seeking to make compliance with the Contract “more expensive” for APCOA.” (emphasis in the original).
Accordingly, drawing on authority from England and Wales, the Court took into account for the first time in an Irish case, the failure of an applicant in the substantive proceedings to provide an undertaking to a notice party when assessing the balance of convenience in an application to lift an automatic suspension.
Q-Park’s Failure to Provide DCC with Full Undertakings
Justice Twomey was also critical of the limited undertakings offered by Q-Park to DCC.
DCC claimed that APCOA’s tender would reduce DCC’s parking enforcement costs by up to €1.5 million, whilst also generating an additional €2.1 million of income. However, Q-Park only offered an undertaking with respect to the increased costs of parking enforcement whilst declining to offer an undertaking with respect to the loss of generated income.
At paragraph 98 of his judgment, Justice Twomey noted that Q-Park’s failure to provide more than these “limited” undertakings was another factor in favour of lifting the suspension.
A Moot Tender
Another reality facing the Court was that, unless the suspension was lifted prior to the expiration of
APCOA’s option to lease on 30 September 2026, there was a real risk that the property, or indeed any suitable alternative property, would no longer be available.
Justice Twomey accordingly noted that “some weight” must be given to the risk that the continuation of the suspension would render the tender moot and the “the consequent waste of public funds which would be involved in running a new competition”.
The Court firmly rejected Q-Park’s suggestions that APCOA could use an alternative property stating that is not for a losing tenderer to prescribe how the successful tenderer could perform the contract.
Decision
Although noting that the risk of a moot tender process and the failure to provide APCOA with undertakings were not the only factors the Court considered, Justice Twomey held that the significance of these factors resulted in the balance of convenience weighing in favour of lifting the suspension and accordingly, granted the order sought.
Key Takeaways
The judgment represents the first time in an Irish setting that a failure to provide adequate undertakings, or indeed, undertakings at all, were taken into account in the Court’s assessment of the balance of convenience.
The judgment also highlights the weight given by the Court to the successful tender’s viability should the automatic suspension be maintained and the consequent risk that, should the successful tender be rendered moot, a contracting authority may have to rerun the tender process at taxpayers’ expense.
To read the High Court’s full judgment, please click here.
This article was written with the assistance of trainee, Grace Healy.
