How can a business challenge a decision made through the public procurement process? Abi Lutey, Partner, Commercial Dispute Resolution & Insolvency outlines the basics.
Blog updated 25 February 2021
Please note that there have been some changes to procurement law since this blog was written. We are awaiting the outcome of a Government consultation and will provide an update after that.
Public Procurement – what is it?
Public procurement is the purchase of goods and services by public sector bodies, including Government departments. In England, procurement is regulated by The Public Procurement Regulations 2015, which were designed to give effect to current EU requirements. The UK’s withdrawal from the EU will have implications for public procurement, though we do not yet know what changes it will bring about.
The regulations do not apply to tenders under £118,133 for central government authorities or £181,302 for other public sector contracting authorities. However, contract decisions that fall under the threshold may still be challenged through the courts.
A lot of time and effort goes into putting together a bid for a public tender. Before making an application, it is important to ensure that you have reviewed the invitation to tender carefully and that you keep a record of your application and any correspondence.
Receiving a decision on your application for a public sector contract
If you submit a proposal for a public sector contract, you will be informed whether or not you have been successful. This will come in the form of an ‘Alcatel’ letter which gives the decision, how it was reached and certain prescribed details of the tender evaluation scores.
Each unsuccessful bidder is entitled to see their own and the successful bidder’s score.
If you want to appeal against the decision, time is very much of the essence. There is a limitation period of 30 days to challenge any public sector procurement process.
The contract may be awarded through what is known as a Competitive Dialogue or a Competitive Procedure with Negotiation. One of these processes can be used if the contract cannot be awarded without prior negotiation because of the nature or complexity of the goods or services required.
The Standstill Period
The regulations provide a 10-day standstill period after the decision has been communicated to all the bidders and before the contract is signed. This may be extended upon request. This means you will have sufficient time to and information to enforce your rights, before the 30-day deadline for challenge.
Disclosure in public procurement
The regulations require the public sector authority to retain copies of, and grant access to, documents on contracts. The organisation is required to make and retain tender reports that contain a list of specified details relating to matters including:
- The names of selected and rejected tenderers and the reasons why they were successful or unsuccessful.
- Details of subcontractors.
- Circumstances justifying the use of the competitive negotiated procedure and competitive dialogue procedure.
- Conflicts of interest identified, and action taken.
They must also document the progress of tenders. This should include sufficient documentation to justify decisions taken at every stage, such as the preparation of tender documents, dialogue and the selection and award of tenders.
Challenging a decision
If you are unhappy with a procurement decision, you have the right to bring a claim in the High Court, usually the Technology and Construction Court. Proceedings must be started within 30 days of knowing that grounds for starting the proceedings had arisen.
If the High Court rules that the public sector body breached the regulations, your claim may result in one of the following:
- An order to set aside a decision of a contracting authority in the course of a tender process.
- The award of damages if you have suffered loss or damages as a result of a breach.
- The remedy of prospective ineffectiveness of the contract where the relevant grounds are met. This could include, for example, failure to advertise an awarded contract, or breach of the procurement rules matched with a breach of the standstill period.
- A financial penalty imposed on the contracting authority.
Grounds for Challenge
Before making a claim, it is important to assess whether or not you have any grounds for a challenge. These could include:
- Mandatory information required by the regulations to be included in the Invitation to Tender is missing.
- The standstill period has been miscalculated.
- Different criteria, weighting or scoring has been used than that set out in the initial call.
- Knowledge or suspicion that the winning bidder fails to meet the criteria.
- Manifest errors in the application of the award criteria
- Errors in arithmetic.
In summary it is important to act quickly as soon as you receive the decision notice. That means that getting early sight of key documentation is vital. Consider consulting a lawyer at this early stage rather than leaving matters until the end of the standstill period.
For more information or advice on these issues, please contact Abi Lutey in the Commercial Disputes team on 01872 246200 or email@example.com