Public Procurement Q&A with Cleaver Fulton Rankin Director, Lisa BoydMay 1, 2014
Q: What is your opinion on the new rules on public sector procurement that have been approved by the European Parliament, and why?
The new procurement regulations have sought to provide clarity to the current regulations and also to codify some of the case law. They have been publicised as seeking to simplify the legislative framework however on first glance of the several hundred page document you could be excused for thinking otherwise! On a closer inspection the rules do answer some of the previous ambiguities however it is easy to identify the areas in which contracting authorities and/or economic operatives may seek judicial guidance.
Q: What consequences do you think this will bring for Europe with reference to procurement law?
The regulations have brought in a number of changes:
• In addition to the original principles of equal treatment, non-discrimination and transparency, the new regulations have added two further principles, firstly that the procurement process shall not be drafted so narrowly that it limits competition and secondly that measures will be put in place to ensure that economic operators comply with environmental, social and labour law obligations. Both new principles could perhaps be seen as extensions of other rules already in force however they are now enshrined as the principles behind the legislation.
• The time limits for some of the procedures have been shortened which will be welcomed by many authorities, particularly for “off the shelf” procurements which perhaps do not require such a lengthy tendering period.
• Previously there were procurement methods which could be made available to procuring authorities by the member states however the new rules require that all of the methods are made available to procuring authorities and in addition a new method of “innovation partnership” has been introduced. The availability of all methods will make little difference in the UK as previously contracting authorities had all of the methods open to them however it may make a difference in other EU countries where access was previously limited.
• The rules surrounding the advertising of contracts have been relaxed slightly opening up the possibility of one advert for multiple contracts and more extensive use of PINs. Whether this will have any impact will depend on the changes within contracting authorities.
• Changes have been made to the selection criteria, however of most interest is the addition of new discretionary exclusion criteria including the ability to exclude tenderers where there is concern regarding past performance. This is likely to be seen as the most controversial clarification for economic operators.
• Previously there was no time limit in respect of discretionary exclusion criteria however the new directive confirms that member states must set a limitation period which must not be more than 3 years.
• The new directive has confirmed that the qualification of companies and staff can now be utilised when applying the award criteria. This seeks to solve the uncertainty following the decision in Lianakis however does not possibly answer all of the concerns.
• The new directive also codifies the decision in Slovensko that contracting authorities have a duty to investigate abnormally low tenders.
Q: What are the trends, from a legal perspective, with regards to procurement?
Over the last few years we have seen an exponential increase in the number of procurement challenges in Northern Ireland. The reason for this is due to the heavy reliance on pubic sector contracts and also due to the economic climate, winning a tender is of even more importance. To this end we have seen an increase in the number of clients instructing us to carry out due diligence on tender documentation and drafting clarification queries to ensure that they are in the best position to tender. We have also seen an increase in the number of clients who are prepared to issue proceedings to prevent the award of a contract when they feel that the process has not been conducted properly. From that perspective, it would appear that the automatic injunctive relief introduced several years ago has succeeded in Northern Ireland in providing an effective remedy as previously clients were put off when told they had to seek an injunctive from the courts.
Q: What recent procurement cases have you been recently involved in?
To date Lisa and her team have been involved in a number of high profile cases such a Northern Irish Waste Services Limited v Northern Ireland Water Limited and the first case of a confidentiality ring in a procurement case in Northern Ireland. They have also been involved in one guise or another with waste procurements conducted by Arc21, SWaMP and NWRWMG. Lisa has also seen the team appointed as procurement lawyer to many public bodies such as Invest NI and Castlereagh Borough Council and win many new private sector client.
Q: What legal challenges arise from public procurement, and how can you navigate these challenges?
The legal challenges often arise from the tight time limits imposed by the regulations. Often it takes clients a number of days to realise that there is something more than the disappointment of loosing a tender and that there may be something capable of legal challenge. This means by the time that solicitors are instructed to challenge a tender process that there may be very little time to take action. In addition, due to the nature of the work, economic operators may have little information other than that contained within the tender documentation and it requires applications for specific discovery to obtain the information necessary to successfully challenge a tender.
Q: What are the key aspects, legally, that contractors should be aware of when bidding for a contract?
One of the key things that contractors should bare in mind is the limitation period to raise a challenge in respect of matters arising is 30 days from the date of knowledge. This therefore means that in some cases the limitation period could be before the deadline for the submission of tenders. Most tenderers are unaware of this limitation period and it may be that they only seek advice when their tender is unsuccessful in which case they could already be out of time. Tenderers should therefore take time from the outset to ensure that they are happy with the tender documentation from the outset and if in any doubt raise a clarification. Sometimes tenderers are worried that doing so may count against them but I would advise that it is much better to clarify the position in advance, firstly so that they are not out of time if they are unsuccessful and secondly so that another tenderer does not have the ability to challenge if they win!
Lisa Boyd, Director, Cleaver Fulton Rankin
If you require any further information in respect of the new procurement directive please contact our Head of Procurement, Lisa Boyd.
This item is a brief outline of the legal issues arising and is not intended to provide a comprehensive or detailed statement of the law. Specific legal advice should be sought on the circumstances of a particular case.