Business

Lighting company eliminated from public contract bid due to ‘abnormally low’ quote

Kilkenny’s Killaree Lighting Services loses High Court challenge against its removal from tender process

Killaree Lighting Services said its €4.29 million tender had been eliminated because its quote was abnormally low

Fri Feb 16 2024 - 18:01

A lighting services company has lost a High Court challenge over its elimination from a public lighting tender process because its €4.29 million quote was considered “abnormally low”.

Killaree Lighting Services Ltd, Killaree, Threecastles, Co Kilkenny, had brought the challenge over the awarding of the contract to carry out works on public lighting in the six Connacht counties - Mayo, Galway, Leitrim, Roscommon and Sligo.

The tender process was conducted by Mayo County Council on behalf of all six local authorities.

The work involves retrofitting existing lights with LED upgrades and maintenance for a number of years.

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Killaree said the initial value of the contract was put at €4m and the lowest offer was €6.4 million while the highest was €7.8 million. In 2020, it was awarded to Electric Skyline Ltd.

Before that, however, Killaree’s €4.29 million tender had been eliminated from the tendering process because its quote was abnormally low.

Mayo County Council told the company it was too low because 66pc of tendered items were put at a price of just 1 cent. The council said those 1 cent prices did not cover the full inclusive value of the relevant works, supplies and services.

Killaree argued it had carried out public lighting contracts for the last ten years, including for Laois, Waterford and Wexford councils.

The explanation for the 1 cent pricing was that Killaree has “exceptionally favourable conditions available to it” to supply the products and services necessary to complete the contract.

Killaree brought High Court proceedings against Mayo Co Council, with Electric Skyline as a notice party, seeking to set aside the decision to eliminate it and seeking to suspend the awarding of the contract.

In a judgment on Friday, Mr Justice Brian O’Moore dismissed all but one of Killaree’s grounds of challenge.

In relation to the single ground on which he found in favour of the company - the failure of the council to notify it of a “standstill” period during which the contract would not be awarded - the judge said however the council should not face any penalty.

He found there was no improper fettering of discretion in the council’s decision or any misinterpreting of the tender documentation.

He said the challenge also failed in relation to the claim there was a failure to apply the appropriate test for considering Killaree’s explanations for its low tender.

He dismissed Killaree’s claim there was a failure to give adequate/intelligible reasons for the decision.

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