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Iron Mountain asks the High Court to reopen the £140m passport tender it quit over penalties
Iron Mountain's claim turns on a document-management risk schedule that changed with fourteen days left in a Home Office tender. The argument underneath it is about whose problem a bidder's approval clock is.
The Product Desk · Product desk
What happened
- Iron Mountain (UK) plc has filed a High Court claim saying an unlawful rise in penalty charges forced it out of bidding for a £140m Home Office document management contract for HM Passport Office.
- Two weeks before the extended June 10 deadline, a revised draft raised the monthly penalty for theft, loss or accidental damage of submitted documents from £250 to £20,000, plus £1,000 for each item affected.
- The charge for failing to process submissions on time rose from £8 to £10,000, with additional charges on every late item escalating daily until the problem was resolved.
- Iron Mountain asked for two more weeks to clear its internal governance approvals, the department refused, and the company withdrew from the procurement.
- The company wants the court to set aside the changes and reinstate it in the tender, or failing that to award damages for its lost chance and wasted bid costs, a claim it puts above £10m.
Compiled by The Product DeskSomething wrong?How this is made
Why it matters
- constraint The department's line that internal approval processes "are a matter for each bidder" leaves the timetable risk of a late rewrite with any supplier whose liability sign-off sits with a committee rather than a bid lead.
- decision A bid team hit by a late risk-schedule change chooses between pricing a liability it has not yet quantified and withdrawing to preserve a challenge. Iron Mountain, having called the change a "critical commercial barrier", took the second option.
- precedent If the court treats a service-credit rewrite as a substantial modification barred by the Procurement Act 2023, buyers lose the option of stiffening KPI penalties after the deadline for requests to participate.
- exposure An award DataCenterDynamics expects in October would be made while the claim is live, so whoever wins could find the contract contested before it starts.
A revised risk schedule arrives in the bid portal with 14 days left. Someone has to price it and get sign-off from whoever can approve the new liability. Iron Mountain says it ran out of time doing that, and its letter to the department asked for two more weeks "to enable a full review of the schedules and risk position ahead of suppliers re-convening governance" [10].
Set against the contract, the fixed monthly figures are small. £140m across the four years from November 2026 works out at about £2.9m a month, so a £20,000 monthly deduction is roughly 0.7 percent of a month's revenue [2][3][4].
The multiples are what changed: document loss up 80-fold, late processing up 1,250-fold [1][2]. The parts that scale with volume are the per-item charges, £1,000 for each document affected and a daily escalation on every late item [6][7]. What limits the total is the cap, and the cap moved from applying annually to applying monthly [8]. If the cap figure itself was unchanged, the most a supplier can lose across a year went up twelvefold [5].
The department's reasoning, as recounted in Iron Mountain's own filings, is that the first set of numbers was too small to mean anything. It called the original levels "manifestly disproportionate to the nature, scale and value of the services" and "plainly inadequate," and described its revisions as "corrective and clarificatory in nature" [12].
When Iron Mountain asked in July for the papers behind the decision, the Home Office told it that "numerous bidders have progressed to the moderation stage" [16]. The company that could not get the schedule approved is a subcontracted delivery partner of Sopra Steria on the current contract, according to DataCenterDynamics, whose 2020 contract for scanning, validation and storage was worth £64.5m over eight years [20]. That runs at about £8m a year; the contract now being tendered is worth roughly £35m a year [6].
The binding constraint here is the calendar. The first test for a bid team is whether a revised term changes a liability sitting above the authority the bid lead already holds, and the second is whether the window that is left contains a meeting of the body that holds that authority. If the answer to the first is no, a late change is a repricing exercise and the deadline holds. Yes to the first and no to the second, and the deadline picks the outcome.
The Home Office has not filed a defence, and neither it nor Iron Mountain answered requests for comment [19].
What to watch
- Whether the Home Office's defence, when filed, defends the timing of the revision or only its size.
- Whether the court grants interim relief before the award, or leaves Iron Mountain with a damages claim alone.
- Whether the winning bidder turns out to be the Sopra Steria chain Iron Mountain has been supporting as a subcontractor.