Connaught clients fearful of breaking EU law

Aaron Morby 12 years ago
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Connaught clients are growing fearful that Morgan Sindall’s deal to snap up the failed firm’s contracts may put them in breach of European tendering law.

Several housing associations and local authorities are reported to have rejected working with Morgan Sindall, which signed a £28m deal with administrators KPMG to take on contracts.

Rival housing repair contractors have told the Enquirer that they should be allowed to bid for jobs if terms and conditions are altered with local authorities.

One said: “We bid several of these jobs and lost out to very low prices. If the contract terms are renegotiated we should be entitled to bid again on the revised conditions.”

It is understood several maintenance contractors are watching developments with view to a possible legal challenge.

Mark London, a partner at legal firm Devonshires, is reported to have already drafted eight letters to Morgan Sindall’s maintenance contractor Lovell on behalf of housing associations warning they will not be entering into a contract.

In some he is understood to be citing a breach of EU law. The contracts in question range from £20m to £35m in value.

Up to 100 contracts were involved in the Morgan Sindall deal but as yet no transfer has been finalised with a local authority.

Simon Randall, consultant at Winckworth Sherwood, the law firm, said that local authorities were being placed in an impossible position by rigid public procurement rules.

In Hull, rival Kier has struck a deal to undertake some of Connaught’s work.

A Hull council spokeswoman said the council did not have a contract with Morgan Sindall as yet.

“As an interim measure, we made alternative arrangements with other repairs and maintenance contractors to minimise any disruption to tenants and services and to ensure work is completed.”

Morgan Sindall said it remains confident that the majority of contracts will transfer across.

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