09 February 2012 #Public Sector
As with all aspects of life, time passes all too quickly. The world of procurement is awash with timeframes that bidders and contracting authorities have to be aware of. The implications of missing deadlines in a procurement process are considered below from both the perspective of the bidder and the contracting authority. We also provide practical advice on how an organisation can sidestep the issues that can arise when insufficient attention is paid to deadlines.
Time and the Contracting Authority
When undertaking a procurement process in accordance with the Public Contracts Regulations 2006, as amended by the Public Contracts (Amendment) Regulations 2009, (the Regulations), a contracting authority has to comply with a number of timescales and deadlines. For example,
And the provisions go on. It is essential that the contracting authority is aware of these provisions so it does not fall foul of the Regulations.
The timeframe that contracting authorities have most control over is when to set the deadline for submission of a tender or other procurement related document, such as a pre-qualification questionnaire.
Depending on the procurement process being used, the Regulations will provide that documentation should be submitted not less than a specified period of time from the despatch of the OJEU Notice or relevant invitation. For some contracting authorities, particularly those who are up against tight deadlines in order to get contracts in place, the shortest deadline will be set, possibly with the contracting authority using the option to reduce these timescales further. The Regulations do provide for timescales to be reduced in certain circumstances, but bringing a deadline forward or compacting the procurement timetable is not always in the contracting authority’s interests.
There are a number of risks that arise where a contracting authority procures a contract in a short timescale namely,
The most effective way to ensure that your procurement processes work for the authority and bring real benefits and value for money is to set up a robust procurement strategy and properly prepare for future procurements. Contracting authorities should prepare a checklist of contracts and clearly highlight expiry dates. Contracting authorities should also consider undertaking a procurement audit which should identify ways to streamline processes (to the extent possible) and ultimately reduce costs for the contracting authority.
Time and the Bidder
Time has different connotations for the bidder. Failure to pay attention to deadlines and the contracting authority’s instructions can lead to the bidder being eliminated from the procurement process. Bidders should review the procurement documentation at the outset and diarise all important dates, particularly the deadline for tender submission. There is case law which indicates that generally, timescales for tender submission will be applied strictly by the courts, provided that the tender rules have been drawn up and applied in a transparent, fair and non-discriminatory manner. The courts will consider the principle of proportionality, and may intervene if the decision by the contracting authority not to accept a late tender submission is unjustifiable. However, it should be noted that it is only in very extreme circumstances (such as fault on the part of the contracting authority) that the application of the principle of proportionality will require a contracting authority to consider tenders received after the deadline.
Bidders should also be aware of the timescales for bringing a procurement challenge. The Regulations provide that a claim must be brought promptly and in any event within three months of the date when grounds for bringing proceedings first arose, unless the court considers that there is good reason for extending the period. However, in a recent decision the European Court of Justice held that the three month period should not start to run until the time when the applicant knew, or ought to have known about the infringement. This case has since been considered and applied by the High Court, which used its discretion to extend the limitation period to allow it to start on the date of knowledge. Following these cases, the Cabinet Office has sought to amend the time limits set out in the Regulations. The Public Procurement (Miscellaneous Amendments) Regulations 2011 came into force on 1 October 2011 and amended the Regulations to provide that the time limit for bringing a claim will be 30 days from the date of knowledge. The date of knowledge will be the date on which the economic operator first knew or ought to have known that grounds for starting proceedings had arisen. The court will have discretion to extend this period where there is good reason for doing so, up to an absolute maximum period of 3 months. Note that these new time limits will not apply where the date of knowledge is prior to 1 October 2011, in which case the old regime will continue to apply.
In light of the above, bidders should ensure that any claim is made within the relevant timeframes, and should seek independent legal advice as soon as they become aware of potential grounds for bringing a challenge.
The importance of timing in relation to any procurement should not be underestimated. Both contracting authorities and bidders should ensure that they are aware of the rules and are sufficiently organised to meet all deadlines. It will only be in very extreme circumstances that the courts will intervene to assist a bidder or an authority, and intervention is an expensive way to rectify avoidable mistakes.
If you would like to discuss a fixed fee procurement audit, please contact Kirstin Parker or Rebecca Quinn (contact details below).
JB Leadbetter and Co Limited v Devon County Council  EWHC 930 (Ch)
Uniplex (UK) Limited v NHS Business Services Authority (C-406/08) 
Sita UK Ltd v Greater Manchester Waste Disposal Authority  EWHC 680 (Ch)