New public procurement regulations impact timelines for making complaints

Wednesday September 7th, 2011

By Ruth McNaught, Solicitor, Harper Macleod LLP

On 25 August 2011, the Cabinet Office announced the results of its consultation on the implementation of the European Court of Justice’s (ECJ) decision in the Uniplex case (Uniplex (UK) Limited v NHS Business Services Authority) and published the Public Procurement (Miscellaneous Amendments) Regulations 2011 (the ‘Regulations’), making important changes to the rules, which will apply from 1 October 2011.

The new Regulations will apply to the Public Contracts Regulations applicable in England, Wales and Northern Ireland, as well as the Utilities Contracts Regulations and the Defence and Security Public Contracts Regulations. They also apply to Scotland, but only to reflect government changes – replacing references to the Office of Government Commerce with references to the Cabinet Office.

The key change introduced by the Regulations is to require aggrieved tenderers (in terms of the Regulations: ‘economic operators’) to bring proceedings under the procurement rules within 30 days of the date of knowledge of the issue that gives rise to the suspected breach, with Court discretion to extend the period up to a maximum of three months from the date of knowledge.  The ‘date of knowledge’ means the date on which the economic operator first knew or ought to have known that grounds for starting the proceedings had arisen, leaving the Court to decide when this knowledge occurred, based on the circumstances of the case. Case law to date indicates that knowledge occurs when the aggrieved tenderer has “knowledge of the facts which apparently clearly indicate, though they need not absolutely prove, an infringement” (Sita UK Ltd v Greater Manchester Waste Disposal Authority).

The Court will have what appears to be a broad discretion to extend the 30-day period up to a limit of three months where it has ‘good reasons’ for so doing. Once the Regulations have been put into practice, a clear interpretation of ‘good reasons’ will hopefully emerge.

It is a departure from the previous regime whereby an aggrieved tenderer had to bring claims “promptly and in any event within three months from the date when grounds for the bringing of the proceedings first arose, unless the Court considers that there is good reason for extending the period”. It was this requirement to bring proceedings ‘promptly’ that was brought into question in the Uniplex case, the ECJ determining that it “leaves the Court with the discretion to dismiss an application even where the three month time limit has not yet expired…is inconsistent with EU law as it is not precise and makes the limitation rules uncertain.”

The new time limits will not apply where the date of knowledge occurred prior to 1 October 2011, in respect of which transitional provisions will apply.

Other provisions introduced by the Regulations include:

  • changes to what is needed when automatic suspension is sought
  • clarification that there is no obligation to send an award decision notice at the start of the mandatory standstill period to bidders who have been ‘definitively excluded’ from the procurement process
  • clarification as to the grounds for excluding bidders to reflect the changes brought about by the Bribery Act 2010

In practice, the provisions on time limits should provide more certainty for all parties and should assist contracting authorities in managing their exposure to risk. Contracting authorities may consider updating their procurement documentation to reflect the new rules.

Would-be challengers should not delay in bringing a claim until they have received full evidence from the contracting authority that might substantiate a claim if they already have knowledge of the basic facts that could indicate an arguable breach of the Regulations.

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