10 July 2015 #Public Procurement
The recent case of Medicure v Minister for the Cabinet Office was unusual in two key respects. First, it involved a challenge to a procurement process which was brought some seventeen months after the framework agreement had been concluded. Further, the claimant company bringing the challenge had in fact been successful in obtaining a place on the framework.
The procurement exercise concerned a framework agreement for the supply of locum doctors to various NHS trusts. Medicure submitted both an independent bid and a bid as part of the Avoca consortium. Their independent bid failed to get through the PQQ stage, but the Avoca consortium was successful in being appointed to the framework, and the framework agreement was concluded in August 2012. Medicure later became dissatisfied because, as a result of internal problems within the consortium which were unrelated to the Minister, they did not obtain any work from the framework agreement. Court proceedings were commenced in January 2014.
Medicure’s claim was based on two arguments. Firstly, they argued that their own individual bid had been wrongly excluded at the PQQ stage. This part of Medicure’s claim was decidedly rejected, both because it had no merit and because it was substantially out of time. The Regulations provide that tenderers have just thirty days from the date they believe the breach of the Regulations occurred (in this case, from the date Medicure’s bid was rejected at the PQQ stage, before the outcome of the tender had even been decided) to bring court proceedings. The court has the power to extend this deadline to a maximum of three months, but will only do so in exceptional circumstances.
The second part of Medicure’s claim was based on its appointment to the framework as part of the Avoca consortium. The particular lot for which the consortium had bid was headed “managed service provision for the supply of locum doctors” in the OJEU notice advertising the tender and in the bid documents. Medicure argued that the documents were drafted so as to require the successful tenderer to manage the supply of locum doctors only, and did not envisage or allow companies appointed to the framework to supply doctors directly from their own resources, which is what was happening in practice. Accordingly, Medicure said, the Minister was not operating the framework agreement in accordance with the tender documents. The judge however found that the tender documents did in fact permit both managing the supply of and the direct supply of locum doctors, and there was therefore no issue with the way the Minister was operating the framework. There was no breach of the Regulations and the claim was dismissed.
The decision highlights the need for unsuccessful tenderers to take urgent action if they suspect a procurement process has not been conducted fairly. The timescales imposed by the Regulations simply do not allow for tenderers to hedge their bets, as Medicure did by accepting a position on the framework as part of the Avoca consortium, and only later bringing a challenge to the rejection of their individual bid when the profits they hoped to generate from the consortium did not materialise.
Although the second part of Medicure’s claim failed on the facts, tenderers (both successful and unsuccessful) should take legal advice if they suspect that contracts, once underway, are not being operated by contracting authorities in the way they were advertised. Any significant change from what was envisaged in the tender documents may require the contract to be retendered.