The vast majority of claims about a breach of the Regulations are heard in the Technology & Construction Court (TCC). As a result, a Guidance Note on Procedures for Public Procurement Cases is set to be approved by the TCC (and annexed to the TCC Guide) for the conduct of procurement claims including how the parties should behave pre-action.
The guide was created because it was felt that public procurement cases present some unique challenges for everyone concerned; suppliers, contracting authorities, other interested parties and indeed for the Court itself. Public procurement claims must follow the particular procedures set out in Part 3 of the Public Contracts Regulations 2015 and this raises certain distinctive difficulties, as follows.
The very short time limits for bringing a procurement challenge (usually 30 days from the date that the claimant became aware of the issue complained of) creates a particular conundrum for claimants; how to obtain sufficient documentation about the contracting authority’s conduct of the procurement in order to make an informed decision on whether to proceed with a claim within that short time frame. This difficulty is only compounded by the cost of issuing a claim (which can be up to £10,000) meaning that claimants will wish to be as certain as they can be that the claim “has teeth” before they embark upon litigation.
Another unique feature of procurement claims is the power of the commencement of a claim to “automatically suspend” the contracting authority’s right to proceed with contract award. This creates the need for the Court to timetable in preliminary hearings simply to deal with the question of whether that suspension ought to be lifted before the full trial, or whether it ought to be kept in place until then. This judgment can be a delicate one, especially where a contract providing a significant service to the public is coming to an end and there is an urgent need to proceed to award of the new contract in order to maintain service continuity for users.
A remedy peculiar to procurement claims is the possibility of the Court awarding a “Declaration of Ineffectiveness” in certain situations (particularly if the contracting authority has made an illegal direct award or failed to run a compliant standstill process which has deprived a bidder of a chance to seek review). This Declaration brings the contract to an end from the date it is made, raising a host of questions for the parties and the Court to deal with around how the contractual arrangements should be unravelled and the incumbent supplier compensated.
Of course in any procurement claim, there is always the potential for a wider group of litigants to increase the complexity of proceedings. In an ordinary commercial contract claim you would probably have a couple of parties to a contract before the Court. But in the procurement context, it is not uncommon to see litigants such as a contracting authority and claimant being joined by other interested parties, such as the successful bidder and potentially other losing bidders.
And finally, procurement processes involve the submission of information that is potentially commercially sensitive by not one but several parties, creating issues around how to balance the need for disclosure of information in order to guarantee an effective review of procurement processes, as against the need to protect bidders’ rights to confidentiality.
While not mandatory, a failure to follow the guide, particularly where a contracting authority has refused to give early disclosure of documents, could lead to costs penalties if litigation arises which might have been avoided. The guide puts an emphasis on pre action conduct by both parties which is co-operative, reasonable and proportionate and which focuses on trying to resolve the dispute before it reaches a court. The aim in particular is to avoid the need for litigation to be started merely in order for the claimant to obtain disclosure of documentation. For example:
- Contracting authorities are strongly encouraged to disclose key decision materials at as early a stage as possible, where these are relevant to the claim. These are likely to include the Regulation 84(1) report, together with the documentation of the progress of the procurement and the justification for decisions made (as required by Regulations 84(7) and (8)).
- Alternative Dispute Resolution processes are recommended, both before and during any proceedings.
- The guide recommends the creation of “confidentiality rings” in order to try and facilitate the disclosure that the claimant needs in order to pursue its claim while at the same time protecting other parties’ rights to confidentiality. It suggests that proposals for the scope and limitations of any confidentiality ring should be put before the Court at the very first case management conference, together with explanations of why they are needed. Once the Court has ruled on the composition and scope of the confidentiality ring, it will order disclosure to the ring on the basis that members of the ring provide appropriate undertakings to the court around how that information will be used and confidentiality safeguarded.
While the guide is not mandatory, unless it is followed there is a real risk of being penalised on costs; in practice this will mean that compliance is necessary. Contracting authorities need to take care that their Regulation 84 information is in order as it will need to be disclosed at an early stage of a challenge or potential challenge. In the past some contracting authorities delayed responding to Freedom of Information Act requests until the last possible moment in order to take their response beyond the end of the standstill period, but this is unlikely to be a workable strategy given the requirements of the guide.
The guide is in its infancy so we wait to see how effective it is in creating a change of culture. But in theory at least, it ought to make it easier for claimants to obtain the information they need to assess whether they wish to pursue a claim, and, once a claim is started, the use of confidentiality rings ought to improve a claimant’s access to information about the procurement and how it was run.