England’s largest academy trust has lost a High Court battle over a £2 million management information system (MIS) deal, with a judge ruling rejected bidder Bromcom should have won the United Learning contract.
But United Learning will seek permission to appeal the judgement, a move it said has the backing of government as the ruling is “of concern to all schools”.
United Learning had handed Arbor a multi-year deal providing a cloud-based MIS to 57 schools, thought to be one of the largest deals of its kind. Systems were previously run by Capita.
But second-placed bidder Bromcom took legal action in 2020, alleging United Learning had breached procurement law and seeking damages.
United Learning denied the claims, but a High Court judge has now found in favour of Bromcom on multiple issues, and said he would be awarding damages – with the sums yet to be determined.
Mr Justice Waksman ruled: “There were numerous breaches and collectively they would have meant that the result would have gone the other way by some margin. “
But a United Learning spokesperson told Schools Week the Education and Skills Funding Agency had said it should defend the case, partly given “the potential impact on other schools of repeated litigation”.
He added: “It will be of concern to all schools that a good faith procurement carried out with full professional advice can lead to so many wasted hours and thousands of pounds of legal costs, even where a trust does all it can to close the matter reasonably.”
‘Failure to treat the bidders equally’
The judge said there was a “failure to treat the bidders equally” and “manifest error” because it did not take a particular step to “‘neutralise’ Arbor’s inherent advantage as incumbent provider” to 15 other United Learning schools.
Arbor had stated there would be no cost for a data warehouse, saying it was “already set up”. The judge ruled Bromcom was either clearly offering to cover costs or there was “uncertainty” – but UL “should have sought clarification”.
Instead United Learning added £4,405 to Bromcom’s cost projections, and some of its evaluators marked Bromcom down on the basis it was not covering the costs.
United Learning was also found to have infringed regulations as its cost scoring factored in a rebate from Arbor on its separate contract for other trust schools. The question turned on “the proper approach of the rules relating to incumbent advantage and ensuring a bid relates only to the contract in question”.
Meanwhile the trust “acted unlawfully” in its scoring because it did not provide enough information to Bromcom about why it received particular scores.
Legal breaches not ‘deliberate’
Several Bromcom accusations were thrown out however, including a “general complaint” about Arbor’s incumbent provider status “influencing evaluators”. The judge also said no rule breaches were “deliberate” or in “bad faith”.
A trust spokesperson said it was “pleased” the judge accepted United Learning acted “in good faith” and rejected multiple Bromcom claims. But it is “disappointed” the court found it was “in technical breach on some specific points”.
The case had also seen United Learning accuse Bromcom of “grave professional misconduct which renders its integrity questionable”, because six phone calls with United Learning were covertly recorded.
The judge said the behaviour “showed a lack of professional courtesy” but not grave misconduct.
Bromcom ‘vindicated’, but ‘dread’ for schools
Ali Guryel, executive chairman of Bromcom, said he was “delighted that Bromcom is clearly vindicated”.
He said it had made the “very difficult decision” to take legal action to “drive the changes needed” in the MIS market.
“For a long time some 80% of schools have been locked in legacy non-cloud technology due to procurement gaps and the lack of a level playing field in the marketplace.”
“We are confident our success in this legal action will lead to better outcomes for schools and their pupils as well as better suppliers in the future.”
The company pledged to give half of recovered damages, after costs, to “education charities and awareness campaigns for best practice”.
We are confident our success in this legal action will lead to better outcomes
Duncan Baldwin, an education consultant and former deputy policy director at school leaders’ union ASCL, said the judgement will “potentially fill school and MAT leaders with dismay and dread”.
He said they would “do well to heed” insights from the case. While it is “helpful” for trusts to have all schools on a common MIS system, they should be “very cautious” about discounts offered on existing deals when agreeing new ones for other schools.
Baldwin also said leaders needed to ensure everyone involved had suitable training, understanding and time to fully consider bids.
Trusts should not be “put off” changing MIS, but learn from the judgement to make their processes “reliable”.
Arbor ‘continue to fully support’ United Learning
James Weatherill, CEO of Arbor, said he could not comment on the “particulars of this case”.
But he said procurement could be “complex”, and advised trusts to use frameworks “as they offer a robust and compliant way to purchase”. He added that the company “continue to fully support United Learning” across its schools.
Last year Bromcom also filed legal action against another large trust, Academies Enterprise Trust, and has previously been involved in legal battles with two local authorities.
Meanwhile earlier this month the Competition and Markets Authority concluded a probe into the biggest MIS provider, Education Software Solutions SIMS. ESS was sold by Capita in 2020, and is now part of ParentPay.
ESS had sparked anger by scrapping usual one-year rolling contracts in favour of three-year deals. But after the probe began it made “legally binding” commitments offering those schools which had genuinely considered switching a chance to exit deals early.
The ESFA was approached for comment.
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