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Home > News > The dangers of public procurement

The dangers of public procurement

01 November 2016 | Ken McEwan

The challenges of competing in a public procurement

Broadly speaking, procurement rules ensure that the core Treaty on the Functioning of the European Union 2012/C 326/01 (TFEU) principles of equal treatment, fairness, transparency and mutual recognition (which is especially important for a non-UK bidder), are observed by public bodies purchasing goods or services from private organisations. Any well-advised public body should be keen to keep those core principles in mind, in all its activities throughout the procurement process.

This means that, as a tenderer for public services, you are entitled to expect those principles to be observed by the relevant public body. For example, if you feel that another tenderer has been granted a meeting to explain their bid but you have not, you are entitled to receive an equal opportunity to explain your bid. And you may cite either the treaty principles or the procurement rules themselves (which simply give effect to the treaty principles).

Risks

As a bidder, your main risk is ‘wasted’ bid costs, including staff time which plays a big part in bid-preparation. 

You may also run the risk of negative exposure to a potential future client, but this risk is mitigated by the opportunity for positive exposure to another future client. In other words, it could be your opportunity to shine – and to keep shining until the next time you apply. 

Remember, a public authority is bound by the procurement rules to appoint the bidder that presents the best case against the advertised criteria, so past performance or reputation cannot easily be brought into published competition criteria. This would be specific to a particular bidder, so it automatically falls foul of the ‘equal treatment’ principle. The public procurement rules work against any kind of blacklisting or preferential suppliers’ listing (sometimes to government’s frustration).

Research published in 2013 found that the public procurement process in the UK was the most expensive in Europe, with average costs of £37,200 falling on private companies tendering for contracts. This figure is an average covering high value contracts, so it is not necessarily representative of contracts in the lower bracket. But it does indicate that the costs of bid preparation and continued participation must be considered from the outset.

Legal issues

The key point to remember is that procurement rules are the principles of fairness, equal treatment, transparency and mutual recognition in practice.

If you feel that you have experienced treatment that goes against one of these principles, you may address your concern to the relevant public authority and cite the relevant treaty principle.

It is not necessarily a case of ‘do nothing or sue’. You should be able to apply varying levels of pressure or influence on the public body to make sure it is observing the procurement rules properly. We recommend seeking legal advice before addressing any specific complaint to a procuring public body.

[If you feel that there has been a clear violation of the process and you have incurred losses as a direct result, you may wish to issue a claim. We will cover this process in a separate article.]

It may also be possible to make a request under the Freedom of Information Act 2000 to look more closely at the public body’s conduct during their procurement process. Their decision-making process should be clearly audited and recorded at every step. Once again, we recommend seeking legal advice before making a request of this kind.

If you would like more information, please contact Director Ken McEwan on 0117 906 9442 or ken.mcewan@gregglatchams.com.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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