Procurement Remedies Regulations

Top ten questions on the new procurement remedies regulations

The long awaited regulations implementing the new EC Remedies Directive have now been published – the Public Contracts (Amendment) Regulations 2009 SI 2009 No. 2992.  Here are our top 10 questions and answers on the impact of these new procurement rules.

Q1: On what date will the new Regulations apply?

The new Regulations will apply from 20 December 2009

Q2: Do the new Regulations affect contracts awarded before 20 December 2009?

No, they apply to contracts awarded on or after that date. 

Q3: Do the new Regulations affect contracts not yet awarded but where the procurement procedure is already underway before 20 December 2009?

No, they do not apply to procurement procedures or contracts, including framework agreements, awarded under procurement procedures which commence before 20 December. The Regulations specify when a procedure will be regarded as having commenced before 20 December 2009.  

Q4: What are the rules on notifying participants of the contract award decision?

The contracting authority must notify tenderers and candidates of its decision as soon as possible after the decision to award the contract or conclude a framework agreement. The notice must be in writing and be by the most rapid means of communication practicable.

There is no longer a requirement to notify candidates who were excluded or were not selected at the selection (pre-qualification) stage provided that they were appropriately notified at the time of their exclusion or de-selection.

The notice sent to a tenderer must include:

• The criteria for award of the contract
• The reasons for the decision, including the characteristics and relative advantages of the successful tender
• The score (if any) obtained by the economic operator to whom the contracting authority is writing
• The score (if any) the economic operator to be awarded the contract or to become a party to the framework
• The name of the economic operator to be awarded the contract or to become a party to the framework
• Any reasons why the economic operator to whom the contracting authority is writing did not meet technical specification requirements (where relevant)

and

•  A precise statement of
• • either when the standstill period is expected to end and, if relevant, how the timing of its ending might be affected by any and if so what contingencies; or
  •  the date before which the contracting authority will not enter the contract or conclude the framework agreement.

There are also specific provisions covering the content of a notice to be sent to a candidate.

Q5: How long is the standstill period?

10 days in most cases: Where all notices in relation to a particular contract award are sent by electronic means or by fax then the standstill period ends at midnight on the 10th day after the relevant sending date.  Where the last day of the standstill period is not a working day then the standstill period must be extended to midnight on the next working day.

Where all notices, in relation to a particular contract award, are not sent by electronic means or by fax or where only some of the notices are sent using those methods then different time periods apply.

Q6: Can the contracting authority enter into the contract during the standstill period?

No, the contracting authority must not enter into the contract or conclude the framework agreement before the end of the standstill period.

Q7: What are the obligations on the contracting authority if they receive a request for further information from a tenderer during the standstill period?

The old provisions which allowed tenderers to come back and ask for more information from the contracting authority within the standstill period and to be provided with specified additional information before the end of the standstill period are no longer included. This is because the information requirements have been “front loaded” so that contracting authorities are now required to provide more information in the contract award decision notice which they send to tenderers.

Q8: Can the contracting authority enter into the contract after the expiry of the standstill period?

Yes, provided that legal proceedings have not been issued then the contracting authority can enter into the contract after the expiry of the standstill period.

Where proceedings have been issued during the standstill period then the contracting authority must not enter into the contract.

Q9: What remedies are available?

This is a short, simplified summary of the position. Please look out for our forthcoming Remedies Note which will provide a lot more detail and discussion.

The existing remedies which include interim court orders to set aside a decision or action, to amend a document or suspend a procedure can still be made. The remedy of damages is also still available.

In addition, in certain circumstances where a contract has already been concluded, there is a new remedy of a declaration of ineffectiveness.  New penalties may also apply in addition to or instead of a declaration of ineffectiveness. This is a major change as courts in the UK generally have not set aside contracts which have already been concluded.

Q10: By when must an economic operator issue legal proceedings relating to a contract award decision?

This is a short, simplified summary of the position. Please look out for our forthcoming Remedies Note which will provide a lot more detail and discussion.

Stopping the award of a contract which has not yet been concluded:  Where an economic operator receives a contract award decision notice from a contracting authority in line with the standstill provisions, and it wishes to try and stop the award of that contract then it should generally issue proceedings within the standstill period.

However, just because the standstill period has expired does not prevent an economic operator from stopping the award of a contract.  If an economic operator serves proceedings at any time before the contract is signed, the contracting authority is automatically prevented from entering into the contract.

Other remedies: Where an economic operator is not seeking to stop a contract being awarded or it is not seeking a remedy of ineffectiveness then the proceedings must be started promptly and in any event within 3 months. The 3 month period is triggered by when the grounds for starting the proceedings arose. In this case the most likely remedy being sought will be damages.

Declaration of ineffectiveness: Where an economic operator wishes to challenge the award of a contract where the contract has already been concluded then in certain circumstances it may seek a declaration of ineffectiveness.

The new provisions set out 3 grounds for ineffectiveness and the conditions which must be met to satisfy those grounds. In some circumstances advertising or notification by the contracting authority may mean that the remedy of ineffectiveness is unavailable after a 10 day notification period.

In addition, where specified notification requirements are satisfied, a special 30 day time limit will apply to the service of proceedings seeking a declaration of ineffectiveness.  There is also a general six month time limit on the opportunity to bring proceedings seeking such a declaration.

Bevan Brittan has extensive experience and expertise in the field of procurement.  Please  do not hesitate to contact a member of the procurement team if you would like further information or advice about the new regulations or about any other procurement related issues.