• Judge throws out DHL Supply Chain’s legal challenge to Department of Health and Social Care
  • Challenge came after procurement of £730m logistics contract
  • DHL Supply Chain set to apply for right to appeal judge’s decision

A high court judge has dismissed a company’s legal challenge over the Department of Health and Social Care’s decision to award a £730m NHS logistics contract to a new provider.

In June, DHL Supply Chain, which runs the expiring NHS Supply Chain service, challenged a decision by the DHSC to award the contract to Unipart as part of sweeping changes to the NHS procurement and supply model.

The contract is for the transportation of equipment and supplies to NHS trusts.

DHL Supply Chain accused the DHSC of “misdirection” and “manifest errors” in the way the procurement process was handled, but DHSC denied the allegation and warned delaying the contract award would jeopardise the success of the new model.

The new model aims to deliver savings to the NHS of up to £600m annually by 2022-23. 

On Friday morning, Ms Justice O’Farrell rejected DHL Supply Chain’s case and ruled that the DHSC can award the contract to Unipart.

However, the department will not be able to award the contract until after the Court of Appeal has considered DHL’s application to formally appeal the judgement.

A decision by the Court of Appeal is expected by the end of next Friday (August 24). If the appeal application is unsuccessful, DHSC will be able to avoid further delays.

The dispute was focused on the interpretation of a section of the service specification within the “invitation to tender” document issued by DHSC when the procurement was launched.

DHL Supply Chain also claimed Unipart did not have the capability to provide the contract, despite Unipart’s plan to use logistics firm Movianto as a sub-contractor for a small portion of the service.

Ms Justice O’Farrell’s judgement revealed Unipart had scored 43.32 per cent on quality while DHL had scored 40.92 per cent.

On price, Unipart scored 25.74 per cent and DHL scored 14.26. The tenders were evaluated on a quality to price ratio of 60:40.

DHL Supply Chain is contracted to carry out the logistics service until February 2019, when – if the company’s application for an appeal is rejected – the service will be transferred to Unipart.

The procurement element of NHS Supply Chain formally expires at the start of October this year, when the model is replaced by the new “category towers”.

DHL Supply Chain will run two of the category towers, and is involved in a third through a joint venture with American health analytics firm Vizient. 

A DHSC spokesman said: “We welcome the judgement today, but it would be inappropriate to comment further given the ongoing legal process has yet to finish.”

DHL Supply Chain did not comment.