UK Construction and Law
Bidder outside the procurement rules wins an implied tender contract, then loses almost all of it
By Staff Writer | 13 August 2026
A defence procurement challenge has clarified what a tenderer with no statutory standing actually gets: a duty that its bid be considered in good faith, and nothing more.
The judgment was handed down on 12 August 2026 and decides four preliminary issues ordered in January. It arises from the award of a contract for soft facilities management services at British bases in Cyprus, run between May 2020 and February 2024 under the now repealed Defence and Security Public Contracts Regulations 2011.
The unsuccessful bidder is established in the United Arab Emirates. It is common ground that it was not an economic operator within the meaning of those Regulations, because the policy behind them was to protect suppliers only from countries that give British suppliers reciprocal access. The procurement had begun before the United Kingdom left the European Union, so the protection extended to bidders from the European Union, Norway and Iceland. It did not extend to a bidder from outside that group.
Having no direct claim, the bidder argued for an implied tender contract instead, and said its terms required the department to run the competition fairly, equally, transparently and in line with the invitation to negotiate and the Regulations.
The court found a tender contract, and then held it did nothing beyond obliging the department to consider the bid honestly.
Where the contract came from, and where it stopped
No contract arose at the pre-qualification stage. The questionnaire guidance said that only the express terms of any written contract would have contractual effect, and that publishing the documents committed the department to nothing.
The invitation to negotiate was different. Issuing it impliedly offered at least to consider any tender submitted, and the law implies that such consideration be conducted in good faith. That offer was accepted when the bid went in. The department's reserved rights to amend or cancel the process did not prevent that limited contract from arising.
Everything beyond that failed. Statements that the procurement would be run in accordance with the Regulations were held to be recognition of duties the department already owed to the bidders the Regulations protected, not an offer to extend those duties to a bidder they did not. A responsible authority will in practice try to apply the same principles to everyone, but doing so does not prove a common intention to take on a contractual obligation mirroring the statutory one.
There was no broader implied contract that the MOD should conduct the procurement fairly, equally, transparently or in accordance with the ITN or the Regulations, whether as an incident of the duty to consider the bid in good faith or as a matter of freestanding obligation.
Mr Justice Pepperall
The equality argument and why it did not work
The bidder's most attractive point was that the department's duty to treat the only other remaining tenderer equally made no sense unless the same duty was owed to it. The court rejected that. The other tenderer was a United Kingdom supplier entitled to the protection of the Regulations; the claimant was not. The question was never whether the two should have been treated alike, but whether the department had shown an intention to confer a contractual right of equal treatment on a bidder who had no statutory right to it.
The argument also depended on the accident that a third pre-qualified tenderer had dropped out, leaving one protected bidder and one unprotected one. The court held that the department's intention when it issued the invitation cannot sensibly change according to how many suppliers happened to respond.
On the content of good faith, the judgment confirms that the duty is honesty in considering the tender, not a general obligation to conduct the process well. Evidence of unfairness or opacity might help raise an inference that a particular bid was not honestly considered, but it does not convert the narrow duty into a wide one.
There is one line in the judgment worth pinning to the wall of any procurement team. Current departmental guidance advises that procurement documents should state expressly that opening a competition to suppliers from outside the United Kingdom and Gibraltar is not an admission that statutory rights are being extended to them. That guidance did not exist when this invitation went out. It does now, and this judgment is the reason to read it.