Unipart and DHL v Supply Chain Coordination: What it means for public procurement

The High Court recently handed down judgment in respect of Unipart Group Ltd & Anor v Supply Chain Coordination Ltd [2025]. In this article, we review the court’s decision and explore the likely impact on public procurement moving forward.

Case background

The case refers to three proceedings, which all relate to one procurement exercise and challenge the conduct of Supply Chain Coordination Limited (SCCL) for the procurement of logistic services. SCCL manages the NHS Supply Chain and is a contracting authority in accordance with the Public Contract Regulations 2015. SSCL applied to lift the automatic suspension in each proceeding. Unipart is the incumbent to the contract, but the new contract is of significantly more value than the current one.

Key issue

SCCL failed to address a potential conflict of interest involving a senior executive who worked for SSCL on the logistics transformation of the contract, prior to joining the winning bidder. This was therefore considered by Unipart and others, to be unequal treatment of bidders.

Considerations by the Court

The Court applied the American Cyanamid test to determine whether to allow the automatic suspension. The Court determined that there was:

1. Serious issue to be tried: The conflict of interest presented a serious issue.
2. Adequacy of damages for claimants: Whether the loss will lead to significant financial loss, beyond loss of profit (including reputational damage cost), should be considered on a case-by-case basis. Damages were therefore deemed adequate for DHL but not for Unipart, due to its smaller size and incumbent status.
3. Adequacy of damages for SCCL: The contract’s importance to, and the public interest in, the NHS modernisation program meant damages would not suffice for SCCL should the automatic suspension be upheld.
4. Balance of convenience: The delay in awarding the contract (estimated at two years) outweighed the convenience to Unipart, especially since Unipart delayed challenging the procurement process.

The application to lift the suspension therefore succeeded.

What does this mean and how does it link to the Procurement Act 2023?

The judgment aligns with the principle that automatic suspensions under the Public Contract Regulations 2015 are hard to enforce.

In respect of the Procurement Act 2023, (the Act) claimant’s may only apply for an automatic suspension during the standstill period, resulting in a narrower timeframe to bring the application.

Additionally, the American Cyanamid test has been altered slightly and has been written into the Act. The test is set out under the Act, section 102:

(a) the public interest in, among other things—

(i) upholding the principle that public contracts should be awarded, and contracts should be modified, in accordance with the law;

(ii) avoiding delay in the supply of the goods, services or works provided for in the contract or modification (for example, in respect of defence or security interests or the continuing provision of public services);

(b) the interests of suppliers, including whether damages are an adequate remedy for the claimant;

(c) any other matters that the court considers appropriate.

The changes made to the test are not substantial, but give courts scope to place lesser significance on the adequacy of damages for the claimant. This may mean more claims for automatic suspension are upheld.

Conclusion

The outcome of this case is not unexpected in the world of public procurement but is timely as it gives us a moment to reflect on what changes the Act brings with it. It remains to be seen whether the changes will mean an increase in successful automatic suspension cases in practice, so we will have to wait and see.

Nicola Cullen

Associate

Share post on: