I'm Dreaming Of A .... legal direct award?

This week, we've been looking through a log of all queries received by our Procurement Portal helpline over 2015, looking for any discernible 'themes'. Surprisingly, 'themes' were conspicuously absent, with the exception of a spike of questions in the spring on the impact of the new Public Contracts Regulations 2015 (which came into force in February). Those aside, it turns out we have answered questions on just about every topic in procurement law and practice this year.

One of the most surprising questions came in only last week, from an incumbent supplier of goods who for very many years now has traditionally been awarded contracts directly, free from any competition.

S. Claus, an entity based at the North Pole, called our helpline to query whether its contracts in fact ought to have been advertised and competed and whether there was any risk of a claim for a - declaration of ineffectiveness? The client was most anxious to avoid this eventuality, given the catastrophic consequences should it ever come to pass (disappointed children with empty stockings, elves and reindeer sitting idle, etcetera).

Happily, we were able to advise that the direct award of these contracts is probably legal.

Our advice was based firstly on Regulation 32(2)(b)(ii), which allows a contracting authority to award a contract without publication of a notice where the services/goods can only be provided by one supplier, due to 'technical reasons' making competition absent. The client explained to us that no other provider had the technical capability to provide the service with the flexibility and in the volume and timeframe offered by S. Claus. In our view, while in general the scope of this exemption is narrow, nonetheless we were satisfied in this case that the requirements of this Regulation were met; i.e. that no reasonable alternative or substitute was available and that the absence of competition was not due to an artificial narrowing down of the parameters of the procurement.

As a second line of argument we also considered whether these contracts were 'public contracts' at all given the requirement in the Regulations for public contracts to be 'in writing' and  'for pecuniary interest' and that they be procured by a contracting authority.

We concluded that this was a grey area in respect of the first two definitions. First while no contract is signed as such it is possible that S. Claus' customary acceptance of handwritten requests may well amount to a contract 'in writing'. Further while S. Clause receives no monetary consideration nonetheless the traditional payment of a glass of sherry and a mince pie is still likely to constitute 'pecuniary interest'.

However we advised that it was highly unlikely that children worldwide could amount to a contracting authority for these purposes providing much needed reassurance to the client and saving the disappointment of children everywhere. 

A very Merry Christmas to all our readers from the Procurement Portal team!

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