State Aid? State What?!

Do you need to think
about State Aid risk on
your procurement project?

Make sure you know what
to look out for with our
handy new guide
from our state aid experts.

Looking to challenge a procurement decision?

Suppliers wishing to challenge have only a short time frame in which to act. Click here for our useful guide.

Which Regulations do you need?

To get up to speed with the various new procurement law regulations, please click below;

> Concession Contracts Regulations 2016 

> Utilities Contracts Regulations 2016

> Public Contracts Regulations 2015 

If you're not sure which regulations apply, click here.

Challenges by bidders

In these questions and answers, we assume that the procurement is regulated by the Public Contracts Regulations 2006.
Before the end of the standstill period, an unsuccessful bidder puts us on notice that it has issued court proceedings. Can we award the contract anyway?
No. If a claim form has been issued in relation to legal proceedings on the decision to award a contract, this has the effect of "automatically suspending" the contract award until a court has considered the claim, and the contracting authority is not permitted to enter into the contract. If any relevant formal court proceedings have been issued, and urgent legal advice should be sought.
What are the time limits for an unsuccessful bidder to bring a claim?
Following Uniplex (UK) Limited v NHS Business Services Authority (Case C-406/08), the Public Contracts (Miscellaneous Amendments) Regulations 2011 (in force from 1 October 2011) have introduced a new time limit for damages claims, as follows:

a limit of 30 days from the day on which the economic operator first knew or ought to have known that grounds for starting the proceedings had arisen (called “the date of knowledge” ); and
discretion for the court to extend this where there is a good reason for doing so, but only up to a maximum of three months from the date of knowledge.
These new limits will apply to all cases where the date of knowledge occurs on or after 1 October 2011. For cases where it occurred earlier, the limit will continue to be the old limit as interpreted in the way required by the ECJ, ie, three months from the date of knowledge, with unlimited discretion for the court to extend. The last day of the 30 day period must be a working day.

As stated above, this regime applies only to damages claims. Any claim for a declaration of ineffectiveness (as opposed to damages) would need to be brought within the earlier of 30 days from either the issue of an award letter to the unsuccessful bidder or publication of an award notice, or six months from the date of contract award.
Is it right that, once a contract has been awarded, a bidder's only remedy is damages?
No, there is a new remedy of ineffectiveness, which can be awarded in certain limited circumstances (see below), even after the contract has been entered into. There are additional time limits relating to bringing an ineffectiveness claim (see above).
We made a mistake in the procurement process, but the outcome was the right one. Does this matter?
Potentially, yes. Cases have suggested that in certain circumstances a bidder may have a claim even where they are unable to establish that, other than for a breach of the Regulations, they would have been likely to be successful.
What remedies are available to suppliers if we are found to have breached the Regulations?
If a court finds that the Regulations have been breached, it may declare the contract ineffective, shorten the contract, and fine the contracting authority. In addition, a bidder may claim damages for its losses resulting from the breach.
When might a contract be declared ineffective?
There are three main circumstances when this remedy may be available to suppliers. Firstly, where the contracting authority has directly awarded a contract without placing an OJEU advertisement in circumstances where an OJEU advertisement is required by the legislation. Secondly, where there has been a breach of the rules relating to the standstill period and that breach has denied the supplier an opportunity to challenge the contract award in relation to a separate, earlier breach. Thirdly, where a call-off contract under a framework agreement for goods or services with a value over the EC procurement threshold has been entered into without following the relevant call-off procedures under that framework.
When could we be fined?
A court is required to impose a fine (described in the legislation as a "civil financial penalty") in any circumstances where the court declares a contract ineffective.
What will the level of fine be?
There is no prescribed "tariff" for fines under the Public Contracts (Amendment) Regulations 2009 (which implemented the Remedies Directive in the UK in December 2009). However, the Regulations do state that fines must be "effective, proportionate and dissuasive".

Contact Us

The Procurement Portal aims to provide a "one stop shop" for procurement law queries and advice.

Click here to email our team with your query.

Procurement legal training

Our experienced lawyers provide training on the procurement Regulations to both national and local public sector organisations. This includes the option to undertake training at your premises for a nominal charge.

Call us on 0344 880 2963 or contact any member of our team to find out more details.