Remedies and Challenges
In these questions and answers, we assume that the procurement is regulated by the 2015 Regulations.
No, the time limits for and routes to challenge are substantially unchanged.
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, urgent legal advice should be sought.
The 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.
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.
No, there is a 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).
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.
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.
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.
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.
A court could also impose a fine in any proceedings where the Court is satisfied that the contract has been entered into in breach of any requirement imposed by regulation 87 (i.e. the requirement to hold a standstill period), 95 or 96(1)(b) (both around the automatic suspension mechanism), without making a declaration of ineffectiveness (whether because none was sought or because the Court is not satisfied that any of the grounds for ineffectiveness applies).
There is no prescribed "tariff" for fines. However, the Regulations do state that fines must be "effective, proportionate and dissuasive".
The "Lord Young" measures at Part 4 of the 2015 Regulations go above and beyond the requirements of the parent directive and include obligations for both over- and under-threshold contracts around the use of Contracts Finder and how the PQQ stage is run (if at all), together with an obligation to ensure that invoices are paid within 30 days down the entire supply chain. There is something of a grey area around the potential route to challenge by a bidder if one of these obligations is breached. Part 3, which contains the regulations dealing with applications to court, is stated to apply to "contracts falling within the scope of Part 2" - which would not cover an under-threshold contract. On the face of it then, it appears that the standard remedies regime would not apply if one of the Part 4 obligations was breached in relation to an under-threshold contract, although this is a new area and it remains to be seen how bidders will attempt to litigate Part 4 breaches.
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New public procurement e-learning tools
We have teamed up with BuiltIntelligence* to develop an e-learning tool and procurement webinar.
> Procurement e-learning: Remedies Directive
Designed to help you recognise key risk areas in the procurement life-cycle.
> New Public Contracts Regulations 2015 webinar
Are you struggling to get a handle on the Public Contracts Regulations 2015? If so, procurement experts Greg Gibson and Helen Prandy will guide you through the key changes in the new Regulations and provide practical answers to some of the tricky issues raised. The webinar is priced at £49 + VAT.
* Mills & Reeve LLP receives a share of the course fees from BuiltIntelligence to reflect our contribution to the course content.