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Court ref: 95/NJ/0236 ...
Court ref: 95/NJ/0236

A catering company's claims that it was 'misled' into under-bidding for a £16m school dinners contract were today vehemently denied by Humberside CC.

BET Catering Services Ltd insists it was induced into seriously under-tendering for the contract by 'inaccurate and misleading' information provided by the council, and that it is now facing crippling losses of up to £3m a year.

But Patrick Elias QC, for the council, said that BET had been given 'a plethora' of information about staff hours, pay and conditions before making its £15.935m tender, and had absolutely no cause for complaint.

He agreed that the council had been obliged to inform BET about the contractual liabilities they would inherit from the council's own in-house direct services organisation if they won the contract.

But he added: 'There is no obligation to inform rival tenderers of the full range of working practices that a DSO employs.

'It is wholly legitimate for a local authority to wish to confine itself to providing the limited information which is relevant, and to be keen not to reveal other material, otherwise the in-house bidders will be seriously disadvantaged in the tender exercise.'

'Extremely experienced' BET Catering had been given all the relevant information it needed to make a financial realistic tender, said Mr Elias.

He accepted that the county council had not fully answered the 'extravagantly detailed questionnaire' put in by BET, but some of the information asked for would have itself been misleading.

'BET received a vast amount of information about the service to be provided - meal numbers, locations, types of menus, cooking, storing and cleaning details.

'There was a plethora of information which allowed BET to calculate what was required to meet the contract'.

Mr Elias denied the caterers' claims that they had been saddled with a union 'collective agreement' on staff hours and pay without being told of it before tendering.

There was a 'staff formula' dating back to 1953, but it only made 'suggestions' as to staff levels and did not impose any obligations on BET.

There was and never had been any collective agreement in force, despite the unions' 'understandable desire for the opposite to be perceived as being the case', he said.

Mr Elias denied that the council had made any 'false representations' to BET during the tendering process which had been entirely fairly conducted with a view to maintaining a level playing field for all concerned.

Earlier the court heard how BET had battled it out with three other tenderers to win the four-year contract which involves providing about 74,000 school meals daily from more than 400 kitchens, as well as thousands of meals on wheels.

But, since commencing its duties under the contract in January this year, the company had been making losses 'of perhaps as much as £3m a year', said BET's counsel, Jonathan Harvie QC.

All the other tenderers had 'fallen into the same error' as BET, putting in bids at far below economic levels, and Mr Harvie told the court: 'But BET Catering were unfortunately the winners'.

BET, which provides catering services to many other local authorities, now found itself locked into a financially crippling contract which threatened to turn the whole group into a loss-maker, he added.

'The broad issue is whether BET, greatly experienced in this field as they are, hopelessly under-tendered through their own ineptitude, or whether they were misled by information provided by the council on which its tender was based,' he told Judge Geoffrey Rivlin QC.

The hearing continues and is now expected to conclude next Wednesday, when Judge Rivlin has indicated that he may give an immediate judgement.

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