Mayo County Council faces a fine potentially running into hundreds of thousands of euro following a dispute over the award of a public lighting contract, it has emerged.
Killaree Lighting Services Ltd unsuccessfully bid in 2020 for a contract tendered by the council on behalf of itself and five other local authorities for the repair and maintenance of public lighting.
Last week, Ms Justice Niamh Hyland in the Court of Appeal ruled that the council was liable for a financial penalty for its failure to give Killaree the opportunity to seek “pre-contractual remedies” when it eliminated the company from the tender process in October 2020.
She returned to case to the High Court to decide on the amount. The final figure could be 10 per cent of the contract’s value, estimated at €4 million to €6 million, depending on the length of time for which it runs.
When dealing with Trump, Ireland needs to focus on what we can control rather than speculating ourselves into a crisis
Fair Deal: Nursing home care costs will limit scope for tax-efficient small gifts to family
Apple investors turn jittery as earnings loom
Ryanair grows profits tenfold, while Aer Lingus cabin and ground crew seek talks on pay deal
The council must pay the fine, known as a civil penalty, to the State and not to the company. The three-judge court ruled in Mayo County Council’s favour on most of the issues raised by Killaree.
However, it upheld the company’s claim that it was entitled to a “standstill letter”, which would have allowed it time for pre-contractual talks with the local authority once it had decided to award the contract.
Standstill letters allow unsuccessful bidders for public contracts a set period of time to raise concerns they may have about the treatment of their offers once a public body has decided on the successful bid, but before it awards the contract.
Ms Justice Hyland noted that Mayo County Council had breached European Union regulations governing public contracts by failing to do this.
Mayo County Council, acting for itself, Galway city and county councils, and Sligo, Leitrim and Roscommon county councils, sought tenders for the contract in July 2020. The work was worth €1.4 million for 12 months, after which it could be renewed up to six times every six months.
Killaree submitted its bid the following month. The council then responded that it was concerned that the prices quoted for some of the work were “abnormally low”.
Following further correspondence, the council told Killaree on October 9th that it decided to eliminate the company from the competition. It had decided to award the contract to another firm, Electric Skyline.
Killaree went to the High Court, which ruled that the council was entitled to exclude the company from the process.
Ms Justice Hyland noted that when Mayo County Council told Killaree that it had excluded its bid, the local authority had failed to tell Killaree that it had decided on the successful bid and that the “clock was ticking for the purposes of the standstill period”.
Mayo County Council did not comment.
HG Carpendale & Co Solicitors, David O’Brien BL and Stephen Dodd SC acted for Killaree.
- Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
- Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
