Legal

These regulations were signed into law on 25 March 2010 and are expressed to apply to decisions taken after that date. The regulations are to implement the changes made by Directive 2007/66/EC to the Remedies Directive 86/665/EEC and set out a number of remedies and review procedures available to eligible persons in relation to the procurement procedures of public sector bodies...

The Regulations seek to encourage increased cross-border tendering within the EU by seeking to enhance tenderers' certainty of rights and by providing a more robust review procedures for tenderers. They also seek to improve the effectiveness of review procedures at a pre-contract stage.

The regulations apply to contracts to which the European Communities (Award of Public Authorities' Contracts) Regulations 2006 apply. The review procedures set out in the regulations are available to a person who has or had an interest in obtaining the public contract in question and where they allege that they have been harmed or are at risk of being harmed by an infringement of European Communities law relating to that public contract, EU public procurement law or a law of the State transposing that law.

2. Standstill Period

The regulations provide that a standstill period applies in respect of certain public contracts. The Contracting Authority is not permitted to conclude or award the public contract during the standstill period. The standstill period begins on the day after the tenderer/candidate is sent (rather than receives) a notice of the outcome of their tender/ application. The duration of the standstill period must be at least 14 calendar days where the notice is sent by facsimile or electronic means and at least 16 calendar days if the notice is sent by any other means (i.e. by post).

• Inform the tenderer/candidate of the decisions reached concerning the award of the contract;
• State the exact standstill period which applies to the contract;
• Provide a summary of the reasons for the rejection of the tender/application. In the case of tenderers, this summary should comprise:

(i) The characteristics and relevant advantages of the tender that was selected;

(ii) The name of the successful tenderer;

In the case of an unsuccessful candidate the summary may be provided by setting out:

(i) The score obtained by the candidate concerned; and

(ii) The score achieved by the lowest scoring candidate who is considered to meet the pre-qualification requirements in respect of each criterion assessed by the Contracting Authority.

In the case of an unsuccessful tenderer the summary may be provided by setting out:

• The score obtained by the unsuccessful tenderer concerned; and
• The score obtained by the successful tenderer in respect of each criterion assessed by the Contracting Authority.

There are certain circumstances under which the Contracting Authority may withhold the information set out above.

The 30 day time limit will apply to most procurement challenges with the exception of applications for a declaration of ineffectiveness. The limitation period for those seeking a declaration of ineffectiveness will be six months from the date of conclusion of the contract. The six month time limit for ineffectiveness claims can be reduced to the 30 day period where the award notice has been published or where the procuring authority has notified each candidate of the outcome of his tender (or application to tender) and has provided summary reasons as to why the tender or application has been rejected.

The regulations provide that the rules of Court may provide for the Court to grant leave if the Court considers there is good reason to make an application for interlocutory orders after the 30 calendar day time period has expired.

In circumstances where a person applies to Court seeking interlocutory orders, the Contracting Authority is prevented from concluding the contract until:

• The Court has determined the matter; or
• The Court gives leave to lift any suspension of the procedure; or
• The proceedings are discontinued or disposed of.

Prior to making an application to Court the Contracting Authority must be informed in writing of the alleged infringement, that it is the person's intention to apply to Court and the reasons why in that person's opinion constitute the infringement.

Under the previous remedies regime, proceedings seeking judicial review had to be brought at the earliest opportunity and in any event by no later than 3 months from the cause of the action arising.

The Court has the power (depending on the circumstances) to:

• Set aside, vary or affirm the decision of the Contracting Authority;
• Declare a public contract ineffective;
• Impose alternative penalties on the Contracting Authority;
• Make interlocutory orders to correct an alleged infringement or prevent further damage;
• Suspend the operation of a decision/contract;
• Award damages as compensation as a result of loss caused by an infringement of EC/EU law or the law of the state transposing that law;

The Court can declare that a contract is ineffective in a number of circumstances including where a contracting authority has concluded a contract during the standstill period and where a contracting authority has concluded the contract after a candidate has applied to Court for a review of the contract award decision and before the Court has made its decision.

Declarations of ineffectiveness are likely to be only granted in situations where there have been significant breaches of procurement rules. In that event, all future obligations of the parties from the point that a declaration of ineffectiveness is granted will end.

The Court can decline to declare a contract ineffective if it decides that overriding reasons relating to the general interest require that the contract continue in existence. In such circumstances the Court shall impose an alternative penalty of either or both a civil financial penalty of up to 10% of the value of the contract and the termination or the shortening of the duration of the contract (the award of damages is stated not to be an appropriate alternative penalty in such general interest cases).

Obviously given the tighter deadlines that now apply to any procurement challenges, obtaining information in relation to the assessment of the tender will now be an even more urgent priority. In acting for aggrieved tenderers we have employed various strategies to seek the requisite information at the earliest opportunity. The time period for taking an action is extremely brief, given that claims in commercial tort or breach of contract cases must be brought within 6 years of the cause of action arising.

We are of the view that the new timeframes will put increased pressure on aggrieved tenderers to make a very prompt decision as to whether they wish to challenge the procurement process. Swift, firm and immediate action will be required in order to avoid any potential action becoming time barred.

LK Shields Solicitors