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the awarding body only provided additional information to one tenderer
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failing to advertise a relevant contract
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permitting only one tenderer to change their tender application
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giving the contract to a tenderer who did not comply with specifications
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determining that a candidate did not meet pre-qualification criteria on incorrect grounds
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changing the criteria needed to be met after bids have been received
Is there a time limit for challenging a procurement process?
A claim for any remedy bar ineffectiveness (for example a claim for damages) must be made within 30 days from when the claimant knew, or ought to have known that grounds for the claim had arisen. If the claimant is seeking an order that the contract awarded is ineffective, the claim must be brought:
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30 days from the date the contracting authority informs bidders that it has awarded the contract (giving reasons for the award)
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30 days from the date the contracting authority publishes a contract award notice in OJEU
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six months from the date of the contract if the contracting authority has not given notice in OJEU or informed bidders
What is an award for ‘ineffectiveness’ under the procurement regulations?
If the court deems that a procurement award is ineffective then the contract between the public body and the winning party will be terminated. This remedy is only available for procurement processes after the 20 December 2009.
In order to obtain a declaration of ineffectiveness, the claimant must prove the following took place (as set out in The Public Contracts (Amendment) Regulations 2009):
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the contract was improperly awarded without prior advertisement (ie a failure to publish a contract notice)
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the contracting authority entered into a contract before the expiry of the standstill period or when an automatic suspension applies, where there is also another breach; and
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there has been a breach of the provisions concerning the award of contracts under framework agreements or dynamic purchasing systems.
Anyone who suffers or risks suffering economic loss or damage as a result of the Public Contracts Regulations 2006 being breached has the right to challenge the awarding authority.
Does the contract between the public body and the third party continue if a case to challenge the award is brought before the courts?
No. The existing award is automatically suspended. The contracting authority must apply to the court to have the automatic suspension lifted. The court will then apply the American Cyanamid test when deciding whether or not to uphold the suspension. According to the test the court will need to consider the following criteria:
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Is there a serious question to be tried?
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Adequacy of damages to both the claimant and the defendant
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The balance of convenience, i.e. whether it would do greater damage to the applicant if the injunction were wrongly refused than it would do to the respondent if the injunction were wrongly granted.
The purpose of an automatic suspension is to give an applicant a chance at winning the contract they have fought for if they are successful in their claim.
How are costs awarded in public procurement challenges?
There is a significant risk to claimants when challenging a procurement award in that they may be liable for up to three sets of costs. In the case of Group M UK v Cabinet Office [2014] EWHC 3863 (TCC) it was held that:
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If the defendant contracting authority applies to lift the automatic suspension; The winning bidder participates in that application as an interested party and contributes something relevant to the question of how likely the claim is to succeed at trial or otherwise to the question of whether the court should lift the suspension; and
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If the suspension is lifted then…
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The winning bidder is entitled as a matter of principle to recover its costs if the final judgement goes against the claimant.
The losing claimant may also be ordered to pay the contracting authority’s costs. This can prove to be a very expensive day in court for an unsuccessful claimant, as court costs plus damage costs to the winning bidder could easily run into six figures.
If you have any further questions relating to challenging a procurement decision then please call our London office on 0207 993 6917 or request a call back.
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Fisher Scoggins Waters is a leading construction, engineering and manufacturing litigation firm, specialising in disputes and disasters. For further information on this article or any of our litigation services, please contact us on: +44 (0) 207 993 6960.