The Court of Appeal has upheld Mayo County Council’s decision to exclude Killaree Lighting Services Ltd from a public lighting contract tender, while finding that the Council’s failure to send a proper standstill letter deprived the company of the chance to seek remedies before the contract was signed.
In a judgment delivered on 23 January 2025, Ms Justice Caroline Hyland, with whom Ms Justice Faherty and Mr Justice Allen agreed, dismissed Killaree’s challenges to the Council’s finding that its tender was abnormally low and its reasons for excluding it. The court also refused to declare the contract ineffective. It varied the High Court order and remitted the question of a civil penalty to the High Court for directions and a decision.
The competition concerned repair, maintenance and upgrades to 57,049 public lighting units for six local authorities. Killaree’s notional tender total was €4,292,198.82, compared with €6,426,882.20 for successful tenderer Electric Skyline Ltd. The court said about 66% of Killaree’s 520 priced items were entered at one cent each, including emergency call-out services, traffic management and insurance.
Killaree argued that the Council had confused rules on inclusive and balanced pricing with the rules on abnormally low tenders, should have accepted its explanations based on favourable supplier arrangements and similar past contracts, and was not entitled to look beyond the overall tender total. It also said the Council should have compared its bid with others before investigating it. The Court of Appeal rejected those grounds. It held that the Council could examine individual prices and costs, and that Killaree’s general account of past work did not explain how the unusually low prices in this tender could cover the relevant work. The court also found the Council’s clarification did not require comparison with other tenders as the only way to identify a potentially abnormally low bid.
The court held that the Council’s 9 October 2020 letter excluding Killaree was not a compliant standstill letter. It did not clearly tell the company that the successful tenderer had been identified or that the standstill period had begun. The court concluded Killaree was entitled to assume the Council would comply with its notice obligations and was deprived of the chance to seek pre-contract remedies before the contract was signed on 27 October 2020.
That breach did not meet the additional legal condition for a mandatory declaration of ineffectiveness: the court upheld the finding that no substantive procurement infringement affecting Killaree’s chance of winning had been established. It also upheld refusal of a discretionary declaration, citing the contract’s public safety significance, its implications for six local authorities and legal certainty.
Because the standstill breach was established and the contract was not declared ineffective, the court said an alternative penalty must be considered. No penalty was imposed by the Court of Appeal. The matter was remitted to the High Court solely on whether a civil penalty should be imposed; Killaree may pursue that issue through further pleadings and evidence. Any civil penalty would be paid into the Central Fund, not to Killaree.