New Guidance Issued By TCC On Public Procurement Cases

27/07/2017

In July 2017, the Technology and Construction Court (TCC) issued a new guidance note on public procurement cases (the TCC Guidance).

The key aims of the TCC Guidance are to:

• minimise the risk of parties issuing proceedings by encouraging public bodies to talk openly with providers and share key documents          

• provide consistency on common procedural issues relating to public procurement          

• reduce legal costs for all parties by ensuring experienced judges are appointed alongside expert court staff to deal with public procurement cases

Avoiding litigation proceedings in public procurement cases

In public procurement disputes, the mandatory standstill period is a mere 10 days.  This leaves limited time for any pre-action process.  A potential claimant may need to commence proceedings without delay to obtain an automatic suspension of the award of the contract.

Because of the short time-period, there is likely to be a major imbalance of information held between the parties.

To address this problem, the TCC Guidance sets out the following recommended pre-action process:

1.    The potential claimant will send a letter before claim to the contracting authority.  This letter should alert the authority to the reason for the claim, the procurement process it relates to, any further information they require, the remedy sought and any request for an extension of the standstill period and/or a request not to enter into the contract for a specific period of time and/or not to do so without a specified period of notice to the potential claimant.

2.    The authority needs to acknowledge the letter and let the claimant know whether the standstill period will be extended, and if so, by how long.  Disclosure of any information requested by the potential claimant should be given.

3.    The parties should continue to try and resolve the dispute without resorting to litigation.

The TCC Guidance emphasises strongly that both parties need to operate under a culture of co-operation and reasonableness when dealing with matters such as granting extensions of time and standstill periods.

Confidentiality and disclosure in public procurement disputes

The TCC Guidance acknowledges that the disclosure of highly sensitive, confidential information can affect a disputing parties’ ability to resolve issues outside formal proceedings.  However, it states that 

“the need to protect confidential information needs to be balanced by the basic principle of open justice.”

Parties should also be ready to offer disclosure of documents, although consideration of any genuine concerns with regard to confidentiality, whether their own or those of third parties will need to be taken into account.  The TCC Guidance encourages authorities to disclose key materials to claimants at a very early stage (such as during pre-action correspondence) when relevant to the complaint.  This should reduce the need for claimants to incur the cost of making a court application to obtain this information.

The TCC Guidance also advocates for confidentiality rings to be established as early as possible.   A confidentiality ring comprises persons to whom documents containing confidential information may be disclosed based on their undertakings to preserve confidentiality.  Both parties’ legal advisors and counsel will be admitted into the ring.

Judicial Review

To reduce cost and complexity, if a claimant chooses to launch proceedings in the TCC and the Administrative Court (as a Judicial Review), both cases should be heard together in the TCC by a judge with an understanding of both processes.

Interested parties

Procurement claims frequently impact parties other than the claimant and the contracting authority, in particular, the successful bidder, who may be significantly affected by the relief sought in a procurement claim.

The TCC Guidance recommends that successful bidders should be put on notice if a procurement challenge is brought and they should apply to the TCC if they wish to be represented.

Interested parties may be entitled to recover some of their costs, or even, in some circumstances, be ordered to pay the costs of other parties.  Therefore, a careful risk assessment by the interested party’s solicitor needs to take place prior to proceedings.

The new Guidance will be incorporated as an annex to the TCC Guide, and therefore, it will not have the status of binding procedural rules.  However, judges will take the TCC Guidance into account, especially when looking at case management and the allocation of costs.