Comment: Out-of-court settlement over lost bid is basically wrong

In the complex story about the leisure park at Hengrove, the most telling remark is made by city council Tory leader Richard Eddy.

He makes the point that the risk of failure must lie with the contractor, not the authority.

He says it is certainly not in the taxpayers' interests to have the council forking out a large sum of money to a company which was not successful in making its bid.

Cutting through the complexities of this situation, it appears that DCLM, the unsuccessful contractor, was not happy with the process which led to Bristol Active winning the contract.

So they have threatened to sue the council but it appears that the ruling Lib Dems want to pay them off with £800,000 to avoid the possibility of legal action. So when the dust settles, Bristol residents will have effectively paid the money with just a large legal bill to show for it.

At a basic level, this cannot be right. We cannot have a situation where tendering companies that are not awarded a contract may still have a reasonable chance of recouping some or all of the money in an out-of-court settlement.

The principle which underpins competitive tendering is that firms have the right to bid for a job, but if they fail, they must lick their wounds and walk away.

In today's case, the situation is not clear-cut, hence both sides appear to be trying to cut their potential losses.

The loser is the council tax-payer.

Bristol City Council is already pleading poverty and having to make cuts. It could do without an episode like this.