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Do you deal with procurement? Want to challenge a decision?

09 June 2016 | Ken McEwan

The limitation period during which a bidder may challenge a public procurement award is very short, so you better act quick! 

If the aim is to secure a re-run of the bidding process, proceedings must be issued within the standstill period. That is 10 days from the date of the announcement of the contract award.

The issue and service of proceedings in these circumstances will prevent the contract being awarded pending judicial determination, but inevitably the decision to issue proceedings at such an early stage is likely to take place at a time when all relevant facts are not to hand. Always a high risk strategy!

Even if the unsuccessful bidder is content to limit its claim to damages, it must issue proceedings within 30 days from the date when it first knew, or ought to have known, that grounds for starting proceedings had arisen.

What effect will the failure to challenge the award of the contract during the standstill period have on the bidder’s claim for damages?

In the recent case of Energy Solutions EU Ltd v Nuclear Decommissioning Authority, the Court of Appeal held:

  1. An unsuccessful bidder can still be awarded damages for a breach of the Public Procurement Regulations, even if the challenge is brought after the standstill period has expired.
  2. If the losing bidder suffers loss as a result of a breach of the Regulations, an award of damages is not discretionary. Therefore if the bidder can prove the breach and that it has suffered a quantifiable loss it should recover damages.
  3. To be entitled to damages, the bidder does not have to show the breach of the Regulations was serious.

This decision is a welcome one for bidders as they can now restrict their claim to one, based upon loss suffered, without having to be worried that failure to challenge the award during the standstill period will negate its claim for damages.

To discuss your particular situation contact 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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