Losing a tender is never a welcome experience, especially when significant time and money has been expended on preparing your bid. In some cases, there may be good reasons to challenge the outcome legally. But what are the possible outcomes of challenging the award of a public contract?
The legal remedies available under the Public Contracts Regulations 2015 (the “Regulations”) depend on whether the public body has yet entered into the contract with the winning bidder or not:
If the contract has not yet been entered into, the court can order …
- That a document be amended or corrected eg. that criteria in the Invitation to Tender documents which breach procurement law must be amended, or mathematical errors in the evaluation documents must be corrected.
- That a decision made by a public body be set aside eg. a decision to award the contract to a particular bidder, or a decision to disqualify a particular bidder.
- That the public body should pay the unsuccessful bidder damages. Damages are usually based on the loss of profits the unsuccessful bidder would have made on the contract. In light of recent case law, damages may only be available to bidders if the breach of the Regulations the public body has committed is sufficiently serious.
If the public body has already entered into the contract with the winning bidder, the court can order …
- Damages, on the same basis as above.
- Where there has been a very serious procedural breach of the Regulations, that a contract is declared ineffective. brought to an end and treated as if it never existed. Declarations of ineffectiveness are very rarely available.
There are also some possible outcomes not catered for in the Regulations …
- The public body may decide to abandon the tender. In almost all cases the Invitation to Tender documents will reserve the right for the public body to abandon a tender and will not oblige the public body to enter into a contract with the winning bidder.
- The public body may be ordered to enter into a contract with you, the unsuccessful bidder who ought to have won, had there not been a breach of the Regulations. This is not a remedy provided for in the Regulations, but the court does have a general equitable power outside of the Regulations to grant injunctions forcing a party to do something. However, in a procurement case this power will only be exercised in exceptional circumstances.
It is important for bidders embarking upon a procurement challenge to consider the available remedies and decide whether winning the contract is vital to them, or whether they would be content with a financial remedy. This will inform the action to be taken and the deadlines to be met.