The Government’s Procurement Bill – Its Impact On Challenges And Remedies For Suppliers And Public Authorities

Of interest to suppliers and public authorities will be the extent to which the Bill’s proposals will affect the ability of suppliers to challenge contract award decisions and the court remedies available to them. While the Bill contemplates that many of the current provisions will remain in place some changes are envisaged. The following is a high-level summary of some of the key points.

• Information to suppliers – Currently suppliers receive so-called “standstill” letters which in addition to their marks and certain other information, should contain “the reasons for the decision, including the characteristics and relative advantages of the successful tender.” In broad terms, this information is meant to be sufficiently detailed to enable an unsuccessful bidder to understand why the winning bid was successful and whether there has been any illegality or infringement which might form the basis for a challenge. Under the proposed legislation, before the contracting authority announces the award of the contract, each supplier must be provided with an “assessment summary” setting out the contracting authority’s assessment of the tender and (if different) the most advantageous tender submitted in respect of the contract. It is not presently clear what level of detail is to be included in the assessment summary and therefore whether this represents a departure from the existing requirements, although it does appear that the assessment summary need not contain a comparison between the advantages of the successful tender over the unsuccessful tender.
  
  
• Standstill period – Following the decision to award a contract, the contract cannot be entered into before the end of the mandatory standstill period, which is currently 10 days from the date notification is sent to bidders (where the award notification is given by electronic means). Under the new proposals while a standstill period is still provided for it is for a period of 8 working days from the publication of the contract award notice, assuming a longer period is not provided for in that notice.
  
  
• Time limits – The Bill does not envisage significant changes to the current position. A supplier challenging an award decision must bring proceedings within 30 days beginning with the day it first knew or ought to have known of the circumstances giving rise to the claim. There are a limited number of circumstances where the supplier has been deprived of the opportunity to seek an interim remedy to prevent the entering into of the contract (for example because the contract was entered into during the standstill period) where the period to bring a challenge is extended to 6 months. The Bill also provides that the court can order that time is extended if there is a good reason for doing so up to a maximum of 3 months from the date of knowledge, again reflecting the current position.
  
  
• Automatic suspension – The Bill provides that a contracting authority cannot enter into a contract, thereby suspending the procurement, where proceedings have been commenced and the contracting authority has been notified of that fact. While this reflects the current position, an important change is contemplated in that proceedings will not now suspend the procurement where the contracting authority was notified of the commencement of the proceedings after the end of the standstill period. Currently the suspension comes into play even if proceedings are commenced after the end of the standstill period so long as the contract has not been entered into.
  
  
• Remedies – Under the legislation the court will be given wide powers to grant interim relief including powers to lift or modify the suspension of the contract award or to suspend the effect of any decision taken by the contracting authority. Again, this is very much in-line with the current position. The Bill does expressly provide, however, that when deciding what order to make the court must have regard to the public interest including compliance with the law, the avoidance of delays and the interests of suppliers. The Bill therefore makes clear those matters that the court in any event should have regard to when deciding whether to lift the automatic suspension. The Bill does not propose any significant changes to the remedies available where a contract has not been entered into (the court is given wide powers including the ability to set aside the award decision) as well as the remedies available once the contract has been entered into. In the latter case, the court is to retain the power to set aside the contract in cases of serious breach such as where the contract has been entered into during the period of automatic suspension. Where a contract is to be set aside it is to be treated as being prospectively ineffective rather than retrospectively ineffective.

Other matters of interest include the incorporation of an implied term into every public contract to the effect that it can be terminated in particular circumstances. These include where the contracting authority considers that the contract was awarded or modified in material breach of the Bill or the supplier has, since the contract award, become an excluded supplier. The Bill also gives powers to Government ministers to investigate a contracting authority’s compliance with the Bill. This includes the power to require the contracting authority to provide documents and other assistance, and the results of an investigation (including any recommendations) may be published.

The current Procurement Regulations seek to strike a balance between the rights of suppliers to be treated fairly by contracting authorities and the provision of effective remedies where that duty is breached and the public interest in ensuring that public projects are not unduly delayed. This balance is largely maintained by the Bill, at least in its present form. Whether that remains the case once the Bill has completed its passage through Parliament remains to be seen.