The first and second defendants (“HMT” and “HMRC”), decided that the new government policy of tax-free childcare (“TFC”) should be delivered by them working with the third defendant (“NS&I”), another government department and executive agency, to provide and administer childcare accounts and supporting services. The inter-departmental collaboration to deliver the TFC would be set out in a memorandum of understanding. The claimant, one of the four largest commercial childcare voucher providers, challenged the decision under the Public Contracts Regulations 2006 and art 56FEU of the FEU Treaty on the grounds that the arrangements involved a material variation of an existing public services contract between NS&I and Asos, a company which had an existing outsourcing contract with NS&I. The claimant contended that an open, transparent and competitive procurement exercise should have been carried out under regulation 5(1) of the Regulations. The judge dismissed the claim and the claimant appealed.