BT to sue Scotland for £20m over SWAN contract

25 April 2014

The Scottish government has, as expected, awarded the £110m Scottish Wide Area Network (SWAN) to Capita – but it faces a £20m damages claim from BT.

The telco says its bid came in £10m cheaper, and lodged an appeal against the award of the contract to Capita and Updata Infrastructure (see News, Jan 2014). However, following hearings in the Court of Sessions presided over by judge Lord Malcolm, BT has now dropped the appeal but will continue to seek compensation. “The case will now proceed as a damages claim, Lord Malcolm having found damages to be an appropriate remedy for BT,” states the company.

A spokesperson for NHS National Services Scotland, which is overseeing the procurement, confirmed BT was cheaper by £10m. He added: “The best product for any given job is not necessarily the cheapest. Price was just one element in deciding the best bid. The other factors we scored were technical standards, performance, and commercial/legal aspects. Each element was around 33 per cent of the total score.” BT believes that it is now “unclear” whether Scotland will have the most “economically advantageous” contract.

The Scottish government claims SWAN will save it £300,000 a month compared to existing network contracts. It said it also offers: more secure transmission of data between public sector partners; greater bandwidth; increased interoperability between public sector bodies; easier future integration; and the ability to accommodate other users more easily.

The initial SWAN contract is worth £110m and will connect more than 4,600 sites including NHS bodies, Education Scotland and several local authorities. The eventual value could be £325m once all the potential users are on the network.