Recent Procurement Developments
The Public Contracts (Amendment) Regulations 2009 came into force on 20 December
2009 implementing the EU directive that seeks to give better redress to aggrieved
bidders.
Two key provisions are:
Standstill Periods and Notification - Public entities are now required
to provide notification with full reasons for a contract award decision, or a decision
to eliminate a bidder from the competition as soon as possible after the decision
has been made to bidders. Such notifications should include the characteristics
and relative advantages of the successful tender, the identity of the successful
tenderer and where possible the score of the tenderer receiving the notice and the
score of the successful tenderer, (slightly different notification requirements
apply to candidates). These tenderer notifications should be provided together with
the 'standstill notice’.
Furthermore the minimum standstill period is now calculated differently and depends
on the means of communication used to transmit the standstill notice as follows
(i) At least 10 days when the notice is communicated using electronic means (e.g.
fax or email), or (ii) When using non-electric means the procuring authority has
a choice between 15 days from the date of sending or 10 days from the date of receipt.
Declaration of Ineffectiveness - More significantly the new Regulations
mean that an aggrieved bidders who can point to a serious breach of the procurement
rules can ask a court to strike down a signed contract and impose a fine on the
public authority and/or shorten the contract. Previously, the only remedy once a
contract was signed was damages. A serious breach could include: a failure to advertise
in OJEU breach of procedural rules (e.g. a failure to publish a standstill notice)
or a lack of equal treatment between bidders. Although it is likely that the remedy
of ineffectiveness will rarely be granted, it could nevertheless have serious implications
for major procurements or contracting exercises as public entities and their contractors
could find signed contracts are set aside and deal with the return of goods and
equipment already supplied. Procurers and suppliers alike will need to be familiar
with the risks of this legislation and how to manage them, (note the effectiveness
provisions do not affect Certified Contracts).
New procurement thresholds - On the 1 January 2010 the EU regime
value thresholds were revised slightly. The new values are set out below:
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Central Government and NHS |
Local Authorities |
|
Works |
£3,927,260 |
£3,927,260 |
|
Supplies and Services |
£101,323 |
£156,442 |
In December the Court
of Sessions in Scotland gave an important judgment in Sidey
Limited v Clackmannanshire Council. The decision was important because
here the court applied the provisions of the new remedies rules to a procurement
below the value threshold.
The court decided that a contract below the EU value thresholds which would ordinarily
not be subject to the procurement rules, was nevertheless still subject to the full
regime because the contracting authority had voluntarily applied the rules to the
tender process.
The tender exercise was for a works contract for the replacement of kitchens and
bathrooms in council houses at an approximate cost of £2.5m. The notice
stated the
type of procedure to be used was the restricted procedure Sidey discovered that
the scoring of its tender had been carried out incorrectly and they should have
been awarded the contract.
Due to these flaws in the process for evaluating tenders received the court decided
the public authority's decision to award the contract to another supplier should
be set aside even though the contract had already been awarded.
This case highlights a number of important lessons. These include the importance
of getting the evaluation and the debrief process correct; the importance of procurers
following the regulations in full if they decide to apply them to what would otherwise
be an excluded contract, for example a below-threshold or Part B services procurement;
if it is not intended to follow the regulations authorities will need to be careful
with the terminology used, otherwise the regulations may be applied by the courts.
Explicit statements would have to be used to rule this out. In this case the council
seems to have implicitly accepted in correspondence that the regulations applied.
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For More Information Contact:
Tarmina Dent
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email: Tarmina
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