High Court judgment highlights need for prompt action in procurement challenges

Out-Law News | 21 Aug 2019 | 2:17 pm | 2 min. read

Operators wanting to challenge a public procurement exercise need to do so promptly or risk their claim being struck out, the High Court has reiterated.

In a recent judgment the High Court of England and Wales threw out a challenge by the Royal Cornwall Hospitals NHS Trust to a public procurement exercise carried out by Cornwall Council, saying that the proceedings should have been commenced within the statutory time limit of 30 days, starting in this case from when the NHS Trust had accessed the relevant tender documents.

He pointed to the policy considerations which “underpin” the 30 day limit for bringing a claim, which are set down in the Public Contracts Regulations (PCR), as well as a Court of Appeal decision which confirmed that challenges to procurement exercises needed to be brought promptly.

Procurement litigation expert Charlotte Evenden of Pinsent Masons, the law firm behind Out-Law, said the decision to strike out the proceedings on the basis that the claimant had evidenced no good reason for extending time reiterated the significance of procedural compliance when challenging a procurement exercise.

“Courts have regularly concluded that the power to extend time limits will be exercised very strictly, and this is a further example. It is key that parties remain alive to the confines and time sensitivities within which these proceedings must be commenced,” Evenden said.

“Bidders considering a challenge will need to move quickly as soon as they believe there may have been an infringement of the procurement rules, even if the decision has not yet been announced.  Procuring authorities, meanwhile, will pay careful attention to any potential limitation argument if there has been delay by a bidder in commencing a claim,” Evenden said.

The court also decided that economic operators which choose not to participate in procurement exercises cannot be owed enforceable duties by contracting authorities.

The NHS Trust said that because it fitted the definition of an ‘economic operator’, it was entitled to

be provided with information about the conduct of the procurement even after it had decided not to participate any further in that procurement.

The judge dismissed this argument, saying it was “extreme and contrary to the structure of the PCR which, to my mind, provide for the regulation of procurements in relation to those who wish to participate in them”.

He added that the information asked for by the NHS Trust went well beyond the scope of information which the PCR require to be provided to candidates and tenderers in a procurement exercise. Any loss suffered by the NHS Trust was due to its decision not to participate in the tender, rather than because of any breach of duty by the council.

“Although it appeared logical that only a bidder could have an actionable claim against a procuring authority, the court has clarified that this is the position; once a potential bidder has withdrawn from a procurement, the authority will no longer owe it duties under the Public Contracts Regulations going forward. A bidder who withdraws from the process before submitting a bid should now assume it would have no claim in respect of the future conduct of the procurement,” said procurement litigation expert Michael Fletcher of Pinsent Masons.

“Had the NHS Trust proceeded to participate in the tender process, then the court may have determined that the Council owed an enforceable duty of transparency and that it was required to provide further information,” Fletcher said.