8. Remedies and Enforcement
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8. Remedies and Enforcement Start Comparison
a. Are there any remedies and enforcement mechanisms in the procurement legislation?

The UK Regulations include all of the remedies and mechanisms which were originally introduced by the EU Remedies Directive (2007/66/EC). This include mechanisms such as Alcatel or standstill periods. The available remedies for bidders are described in the answer to question 7b above.

Under the previous rules, 'Part B' services were exempt from the standstill requirement. However, the position in respect of contracts which fall within the 'light touch' regime is less clear.

Government guidance published in March 2015 acknowledged that a contracting authority may not strictly be required to observe the standstill period for above threshold 'light touch' regime contracts, but recommended that contracting authorities send a standstill notice and observe the standstill period (in the same way as in procurements governed by the main rules), to avoid the risk that the contract (or framework agreement) might be declared ineffective if case law later clarifies that standstill periods are required for 'light touch' contracts.

b. Are remedies available outside the scope of procurement legislation, e.g. civil law damage claims?

Under limited circumstances, a procurement decision may be challenged in the UK by judicial review. However, it is important to note that a review only relates to how a decision was made, not to its merits and it can only be commenced where there is no suitable alternative remedy. The use of judicial review in the procurement context is exceptionally rare - the case of Cookson & Clegg v Ministry of Defence effectively rules out the use of judicial review unless it involves issues such as bribery, corruption, State aid or unlawful policy; or the contract falls outside the Regulations and there is a sufficient public law element to the contract.

It could be possible to bring a claim in tort of misfeasance in public office which applies when there is targeted malice or reckless knowledge on the part of the decision-maker that they will probably cause injury. The Claimant must have suffered damage specific to him, which can include pure economic loss.

An alternative to litigation could be to lodge a complaint with the UK Cabinet Office (which contains the UK government executive agency which deals with procurement management) or the European Commission.

The PCR 2015 specifically provides for damages to be awarded. As such, a court would not order damages in relation to a separate private law action.

c. Is there a specific forum before which procurement disputes are heard?

The High Court of England and Wales hears procurement disputes (typically in the Technology and Construction Court "TCC"). Appeals from the County Court and High Court are heard in the Court of Appeal, appeals from that court are heard by the Supreme Court.

d. Are there any timing requirements for the review?

Potential claimants have 30 days to commence legal proceedings (for matters arising after 1 October 2011). In relation to matters arising before 1 October 2011, the limitation period is three months. The 30 day time limit may be extended at the court's discretion up to a period of three months.

The UK Regulations apply the Uniplex requirement that time begins to run from the moment the Claimant knows or ought to have known of the alleged breach.

e. What are the main preconditions for review?

In order to enforce a contracting authorities' duties under the PCR 2015 in court, the claimant must be an "economic operator". Economic operator is defined as "any person or public entity or group of such persons and entities including any temporary association of undertakings, which offers the execution of works or a work, the supply of products or the provision of services on the market". This is a broad definition and includes bidders in a procurement process, as well as other parties potentially, including sub-contractors and entities that would have bid in the procurement process had they been made aware of the opportunity (i.e. in the context of a direct award).

f. What are admissible grounds for starting a review proceeding?

An economic operator may enforce in the courts any duty incumbent on a contracting authority contained in Part 2 of the PCR 2015 (i.e. the provisions that implement the Public Sector Directive 2014/24/EU, being the substantive section of the PCR 2015 that governs procurement procedures), if that economic operator suffers or risks suffering loss or damage as a result of a breach of such a duty.

g. Does a review proceeding affect an ongoing procurement procedure or an awarded contract respectively?

As noted in the answer to question 7b, where an economic operator issues a claim form in relation to a contracting authority's decision to award a contract, the contracting authority is on notice of this fact, and the contract has not been entered into, the contracting authority is required to refrain from entering into that contract. Other than an automatic suspension, a court may (but is not obliged) to make an order suspending the procurement procedure or any other decision or action taken by the contracting authority in the course of that procedure for the period during which court proceedings are ongoing.

h. What are the consequences of a successful review proceeding for the affected procurement procedure or awarded contract respectively?

This will depend on what the court decides. Where a contract has not been entered into, the court has the power to make a final order setting aside any decision or action of the contracting authority, or to order that the contracting authority should amend any document relevant to the procurement procedure. Where the contract has been entered into, the court must make a declaration of ineffectiveness (if the grounds for ineffectiveness are satisfied) and impose the concomitant civil financial penalties on the contracting authority. If the court does not make a declaration of ineffectiveness, it may also order that the duration of the contract is shortened.

i. How long does a judicial proceeding for review take?

This depends on many factors, chiefly the complexity of the case and the prevailing workload of the court. In our experience, proceedings under the PCR 2015 are supposed to be relatively fast, meaning they should take months rather than years (ideally less than 6 months). However, we also have experience of cases taking years, particularly if the first instance decision in the High Court is appealed to the Court of Appeal and then the Supreme Court.

j. Must unsuccessful bidders be notified before the award? If so, when?

Contracting authorities are required to send each candidate and tenderer a notice communicating its decision to award a contract.

k. Are review proceedings common?

Public procurement challenges have become more frequent in recent years in the UK. As a result, the Courts have been dealing with growing numbers of public procurement claims. However the short limitation period and the perceived risk of damaging an ongoing relationship through litigation, means some economic operators are still reluctant to challenge contracting authorities in court. It is also common for proceedings to settle shortly after being issued, if a contracting authority accepts that the procurement procedure contained a flaw. Where a contract is particularly significant (i.e. it represents all or the majority of a company's business), challenges are more likely.

l. Are damage claims in relation with procurement procedures common?

Yes, although they tend to be a "secondary remedy": if a company is aggrieved by a procurement procedure or its outcome, it will tend to focus on remedies (such as a declaration of ineffectiveness) that will allow it an opportunity to be awarded the contract or have its tender reconsidered, by having the procurement procedure restarted. Damages will therefore often be claimed in the alternative.

In any event, where a claim is brought as a pre-contract remedy and where the automatic suspension has been maintained, the court will decide whether damages or setting aside the award decision is the most appropriate remedy. In Mears Limited v Leeds City Council [2011] EWHC 1031 (TCC) the Court identified the relevant considerations in deciding on an appropriate remedy for breach of the procurement rules. These included the time that would be taken to retender the services, the absence of any interim contract pending any retender, and that damages would be an adequate remedy for the claimant in that case.

m. What are the leading court decisions involving procurement disputes?

As noted above, disputes are normally determined as a result of early rulings and/or settlement and only a few cases proceed to trial in the UK. However some of the more notable UK decisions include:

  • Brent London Borough Council v Risk Management Partners Limited and London Authorities Mutual Limited and Harrow London Borough Council [2011] UKSC 7 applying the Teckal decision in the UK (subsequently codified in the PCR 2015) in circumstances where a number of local authorities set up their own mutual insurance company. The case confirmed that Teckal applied in the UK and that it could apply where a number of different contracting authorities jointly control the "in-house" entity.
  • Sita UK Limited v Greater Manchester Waste Disposal Authority [2011] EWCA Civ 156 applied the Uniplex decision in the UK and confirmed that time runs from the date of actual or constructive knowledge of the breach.
  • McLaughlin and Harvey Limited v Department of Finance & Personnel [2011] NICA 60 concerns the extent to which a contracting authority is obliged to disclose sub-criteria in the invitation to tender (and the weight to be applied to each of them).
  • JB Leadbitter & Co. Ltd v Devon County Council [2009] EWHC 930 (Ch) confirmed that contracting authorities must act proportionately but concluded that a tenderer could be rejected for purely technical non-compliance (failure to submit electronically in accordance with the tender instructions).
  • Harmon CFEM Facades (UK) Ltd v. The Corporate Officer of the House of Commons [2000] EWHC Technology 84 is a rare example of a damages award and in extraordinary circumstances where the contracting authority effectively implemented a "Buy British" policy.
  • NATS (Services) Ltd v Gatwick Airport Ltd [2014] EWHC 3133, is, again, a rare example of an automatic suspension of a contract award being maintained. In that case, the court rejected a contracting authority's application to lift an automatic suspension order to allow them to enter into the contract with the winning bidder.
  • Healthcare at Home Ltd v The Common Services Agency [2014] UKSC 49 confirmed that the standard of a "reasonably well-informed and diligent tenderer" is objective, and what the actual tenderer did or thought in relation to the provision of reasons for a contract award, is not relevant to this standard.
  • Edenred (Group UK) Limited v Her Majesty's Treasury and others [2015] UKSC 45 is the leading case on the meaning of "material variation" of a public contract.
  • Nuclear Decommissioning Authority v Energy Solutions EU Ltd [2017] UKSC 34 confirmed that the "Francovich" conditions applied to the award of damages in a procurement action.