After American Cyanamid: procurement’s new balancing act

On 1 May 2026, the Technology and Construction Court handed down the first judgment on an application to lift the automatic suspension in a public procurement dispute under the Procurement Act 2023 in Parkingeye Limited v Velindre University NHS Trust & Anor [2026].

The court refused to lift the automatic suspension, despite damages being an adequate remedy for the claimant. The decision marks a significant shift from the previous regime and will be of considerable interest to contracting authorities, bidders and all those involved in public procurement.

Background

The case concerns a procurement for car park management services run by Velindre University NHS Trust on behalf Cardiff and Vale University Health Board. Parkingeye Limited, which provides parking services across five NHS sites in Wales, was unsuccessful in the competition. The contract was awarded to National Parking Control Group Limited, which achieved an overall weighted score of 84% compared with Parkingeye’s 68%.

Parkingeye issued proceedings during the statutory standstill period, triggering the automatic suspension under section 101(1) of the Act. The claim alleged multiple breaches of statutory duty, including that the tender notice identified the wrong contracting authority, misstated the estimated contract value, failed to classify the contract as a ‘special regime contract’ and that the evaluation process was conducted unlawfully. The defendants applied for orders under section 102 of the Act to lift the suspension.

The core issues

The central question before the court was how the new test for lifting the automatic suspension in section 102(2) of the Act should be applied.

Under the previous regime, the court applied the American Cyanamid principles for interim injunctions. In procurement cases, the key issue was often whether damages would adequately compensate an unsuccessful bidder. If so, the suspension would usually be lifted and the contract could proceed. In practice, this meant the vast majority of applications resulted in the suspension being lifted.

Section 102(2) of the Act replaces this with a new procurement-specific test. In this case, the court understood it to require consideration of:

• The public interest
• The interests of suppliers, including whether damages are an adequate remedy for the claimant
• Any other matters the court considers appropriate.

The weight given to each factor is a matter for the court in each case.

The court’s analysis and reasoning

The court held that the new test is “substantively and not merely formally very different” from the American Cyanamid test. In particular, the adequacy of damages for the claimant, which was previously often determinative, is now only one factor to be weighed in the balance.

In relation to the public interest limb, section 102(2)(a)(i) requires the court to consider the public interest in upholding the principle that contracts should be awarded lawfully. The court interpreted this as recognising that, where the lawfulness of an award is in dispute, the public interest favours keeping the contract award suspended until the challenge is resolved. It concluded that “the public interest will generally tend in favour of keeping the suspension in place, although on the facts of particular cases it may weigh differently”.

The court rejected the defendants’ submission that this principle is adequately served by post-contract damages, noting that this would render section 102(2)(a)(i) “hardly …  worth mentioning at all”.

As to the public interest in avoiding delay to supply under section 102(2)(a)(ii), the court held that this is primarily directed to “serious and maybe exceptional cases”, such as interference with defence or security, or the interruption of public services, rather than a contracting authority’s preference for a new provider. On the facts, car parking services could continue under the existing contract and the benefits of the new contract were “very modest”.

Turning to the interest of suppliers, the court found that damages would be an adequate remedy for Parkingeye, rejecting arguments based on reputational harm, difficulties in quantifying loss and the fact that Parkingeye had not pleaded a damages claim. Crucially, this finding was not determinative, as it would have been under the previous test.

The outcome

The court refused to lift the automatic suspension, concluding that neither the broader public interest nor the private interests of third parties were sufficient to outweigh the public interest in maintaining the suspension.

Wider implications

The judgment has significant implications for contracting authorities, bidders and all those involved in public procurement:

1. The adequacy of damages is no longer largely determinative: damages are now only one factor in a multi-faceted balancing exercise
2. The public interest generally favours maintaining the suspension: this represents a marked sift from the previous regime, under which the substantial majority of applications to lift the suspension succeeded
3. Lifting a suspension will require compelling justification: absent a “very persuasive countervailing public interest” or an overriding private interest, a suspension will remain in place. General improvements to services or a contracting authority’s preference for a new provider will not suffice.

If this approach becomes the new orthodoxy, it will represent a significant shift from the previous regime. All eyes will be on future judgments, and any potential Court of Appeal guidance, to see whether this approach takes hold.