21 February 2017 #Public Procurement
Useful guidance has been given by the courts on the management of procurement challenges where the complaint relates to the tender documents themselves.
Bidders involved in regulated tenders have only a 30 day period in which to bring legal proceedings alleging a breach of the Public Contracts Regulations 2015 (the Regulations). In the case of challenges to the design of the tender, this usually means that proceedings must be issued before the outcome of the tender is known. This can present unique case management difficulties for the courts.
In Joseph Gleave v Secretary of State for Defence, the Ministry of Defence (MOD) was procuring 6,000 product lines of hand tools for the military. The tender documents set out the relevant product lines by reference to a particular manufacturer’s part number. The claimant alleged that this was a breach of Regulation 42 of the Regulations, which provides that technical specifications should not generally refer to specific products, makes or trademarks which may have the effect of favouring certain bidders or eliminating others. If reference to a particular product is essential, then the reference should be accompanied by the words “or equivalent”.
As the claimant’s complaint related to the tender specification, the 30 day time limit began to run when the tender documents were published in October 2016. The procurement is however ongoing and the contract is not due to be awarded until May 2017. The claimant’s bid is still under consideration by the MOD and the contract may yet be awarded to it.
How then should the courts deal with such a challenge? The MOD argued that if the contract is awarded to the claimant, it will have suffered no loss. It said that the claim should be stayed until May 2017 when the outcome of the procurement is known.
The claimant on the other hand said the trial of its claim should be expedited so that it is decided before the outcome of the tender. The courts do have the power to order expedited trials in appropriate cases, and have done so in a number of procurement claims, typically where a challenge is holding up the award of an essential contract.
The court decided that in the particular circumstances of this case, there was no way the parties could be ready for trial before the contract is due to be awarded. The nature of the challenge would require technical evidence to be given on 6,000 different products, and the expedition of the trial would inconvenience other court users whose trials had already been listed. The court therefore agreed to the MOD’s request that the claim should be stayed until after May 2017 when the contract is due to be awarded.
The court confirmed however that in some circumstances an expedited trial will be appropriate. This would include where a challenge is based on a straightforward but important requirement in the tender documents, which, if the challenge is successful, would lead to a significant correction of the documents at an early stage, saving time and wasted costs for both the authority and other bidders.
The decision on whether to bring a claim challenging the design of a tender will always be a difficult one for bidders who still hope to be awarded a contract. Bidders should always consider taking early legal advice where they have concerns about a provision or requirement in the tender documents. Many potential challenges can be resolved by the public body voluntarily amending the tender documents, without the need for legal proceedings.