Trust in legal dispute over multimillion pound procurement deal

The arrangement between Alder Hey Children’s Foundation Trust and Procure Partnerships Framework Limited to set up and run procurement frameworks is the subject of a legal challenge, according to papers filed with the High Court on 12 June. 

For a private company to offer procurement framework services to public bodies it needs a public sector authority to host the framework and the tendering process to set it up.

Alder Hey has hosted PPFL frameworks in this way before, dating back to at least 2019, according to the government contracts finder service.

Both Alder Hey and PPFL derive an income from the frameworks they set up and run, by charging fees from suppliers that successfully win contracts through the frameworks.

But rival provider Pagabo filed a legal claim earlier this month. It said the trust broke procurement regulations in the way it awarded the contract to PPFL.

Pagabo is seeking remedy for losses after being “denied an equal, transparent, fair and lawful opportunity to compete for the award of and be awarded the contract”.

Total damages would be determined at the end of the legal proceedings should the judge find in Pagabo’s favour. But its legal documents assert the trust and PPFL have shared millions of pounds in income generated by their arrangement.

The claim arose from a contract notice put out by Alder Hey in May when it announced it was setting up a new framework for professional services with PPFL. It is estimated to generate up to £800m over its lifetime, meaning PPFL and Alder Hey could expect to share between £8m and £16m.

The contract notice said the trust would host the tender process related to the framework award while PPFL, “on behalf of Alder Hey… will manage the operational and practical aspects of selecting the suppliers and running the framework”.

Pagabo claimed the trust breached one or both of two different sets of procurement regulations, explaining that it had not yet seen the contract between Alder Hey and PPFL and so it “still lacks essential information concerning the nature of the arrangements between [Alder Hey] and PPFL”.

It said information it had received in pre-action correspondence with the trust made clear that Alder Hey and PPFL had entered into an arrangement to provide services, which it said will have to be governed by a contract.

Pagabo said the trust had not advertised the opportunity to provide those services, nor had it carried out a competitive procurement exercise before appointing PPFL.

It said either the agreement was a concession contract, meaning they had breached “numerous specific provisions” of the Concession Contract Regulations.

Or, if it was not a concession contract, then the trust “did not comply with numerous specific provisions of the [Public Contracts Regulations]”.

The trust has not yet published its defence – and is unable to comment on a live legal proceeding for this story – but in correspondence with Pagabo it denied it was in a concession contract.

It told Pagabo “a concession would have to be a unique opportunity which only Alder Hey has to offer” but “any public sector body can be a Contracting Authority Host”.

It also said a key element of a concession contract is “a true transfer of risk” but “Alder Hey has no risk to transfer”.

The trust said it had not selected PPFL but that the firm had “recently asked” the trust to host the new framework. It added that “the opportunity to work with a Liverpool-based entrepreneur to improve local employment prospects and encourage economic growth… assists the trust in meeting its Good Corporate Citizen objectives.

“The potential for the trust to derive some income from the arrangement is also most welcome.”