1 RELEVANT LEGISLATION
1.1 What is the relevant legislation and in outline what does each piece of legislation cover?
There are three main pieces of national legislation, which implement the EU public procurement Directives.
The European Communities (Award of Public Authorities' Contracts) Regulations 2006, SI No 329 of 2006 (the "Public Sector Regulations") implement Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (the "Public Sector Directive").
The European Communities (Award of Contracts by Utility Undertakings) Regulations 2007, SI No 50 of 2007 (the "Utilities Regulations") implement Directive 2004/17/EC coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (the "Utilities Directive").
On 28 February 2012, Ireland implemented Directive 2009/81/EC dealing with defence and security procurement (the "Defence Procurement Directive") by way of the European Union (Award of Contracts relating to Defence and Security) Regulations 2012, SI No 62 of 2012, (the "Defence Procurement Regulations").
Two separate sets of Regulations govern remedies and enforcement. These implement Directive 2007/66/EC the ("Remedies Directive") – see question 5.1 below.
At national level, procurement of public contracts below the thresholds provided for in the Directives is governed by the Department of Finance Public Procurement Guidelines (or "Green Book"), most recently revised in November 2010, and other non-legislative guidelines. Although the Green Book and other Departmental guidance is non-binding, the Code of Practice for the Governance of State Bodies (most recently revised in May 2009) states that it is the responsibility of the Boards of State bodies to ensure that the procedures set out under EU and national procurement rules are adhered to. Under the Code, the Chairperson of the Board of each State body is required to affirm compliance with the relevant procurement procedures in an annual report to the Minister for Finance. Accordingly, non-compliance with EU and national procurement rules may have corporate governance implications for State bodies and/or have implications for such bodies' relations with the Department of Finance.
The Green Book, as supplemented by Department circulars, states the general principle that a competitive process should be carried out for all public contracts, unless exceptional circumstances apply, and sets out indicative values and procedures for purchases below the EU thresholds, as follows:
- Contracts valued at less than €5,000 may be awarded on the basis of verbal quotes from one or more competitive suppliers.
- Contracts valued between €5,000 and €25,000 may be awarded on the basis of responses to specifications sent by fax or email to at least three suppliers or service providers.
- All contracts for supplies and general services with an estimated value of €25,000 and upwards must be published on the government procurement website www.tenders.gov.ie (eTenders).
- The threshold for a requirement to advertise on the eTenders site for works and related services is €50,000.
In addition, with a view to opening up smaller procurements to SMEs, all suppliers and services contracts with an estimated value of up to €125,000, and contracts for works and related services with an estimated value of up to €250,000, must be awarded using the open procedure.
1.2 Are there other areas of national law, such as government transparency rules, that are relevant to public procurement?
The Freedom of Information Acts 1997 and 2003 (the "FOI Acts") apply to a wide range of public bodies, including many contracting authorities covered by the procurement rules. The FOI Acts allow natural and legal persons to request the release of information held by public bodies subject to the Acts, including records relating to the tendering procedures of public contracting authorities. Certain records may, however, be exempt from the provisions of the FOI Acts on the grounds of confidentiality or commercial sensitivity. Tenderers are normally requested to indicate in their tenders, with supporting reasons, any information included in their tenders which they wish to be regarded as confidential. According to the Green Book, a contracting authority's deciding officer will normally consult with a tenderer before deciding on whether to disclose such information further to an FOI request. While no category of tender-related records is subject to either release or exemption as a class, and each record must be examined on its own merits, previous decisions of the Information Commissioner indicate that a distinction is likely to be made between the tender documents of successful and unsuccessful tenderers, the latter being more likely to qualify as commercially sensitive.
1.3 How does the regime relate to supra-national regimes including the GPA, EU rules and other international agreements?
As noted in question 1.1 above, the national Regulations implement the EU procurement Directives.
As the provisions of the Directives and the Government Procurement Agreement ("GPA") are closely aligned, compliance with the Directives (i.e. implementation of the Regulations) ensures compliance by Ireland with the GPA.
Regulation 26 of the Utilities Regulations expressly requires contracting entities to, in accordance with the GPA, treat economic operators in third countries no less favourably than operators in EU Member States. The Public Sector Regulations do not transpose the equivalent provision of the Public Sector Directive (Article 5), possibly because most State bodies are already covered by the GPA.
1.4 What are the basic underlying principles of the regime (e.g. value for money, equal treatment, transparency) and are these principles relevant to the interpretation of the legislation?
As noted above, the national Regulations implement the Directives and therefore the underlying principles are those derived from the Treaty on the Functioning of the European Union (the 'Treaty') – i.e. free movement of goods, freedom of establishment, freedom to provide services, non-discrimination and equal treatment, transparency, proportionality and mutual recognition.
The Green Book states that in general, a competitive process carried out in an open, objective and transparent manner can achieve best value for money in public procurement and that this is in line with EU Treaty principles and with the Directives.
In Ireland, procurement practices of public bodies (not private utilities) are also subject to audit and scrutiny under the Comptroller and Auditor General (Amendment) Act, 1993.
1.5 Are there special rules in relation to defence procurement or any other area?
On 28 February 2012, Ireland implemented the Defence Procurement Directive by way of the Defence Procurement Regulations, which govern the award of contracts in the field of defence and security.
The Defence Procurement Regulations provide for the protection of confidential information by allowing a contracting authority to require a commitment from the tenderer and the subcontractors identified to appropriately safeguard the confidentiality of all classified information (Regulation 20 – Security of Information). Further, Regulation 34 allows contracting authorities to withhold certain information from publication.
In addition, special rules apply in relation to the procurement of energy efficient products.
Under Directive 2009/33/EC of the European Parliament and of the Council on the promotion of clean and energy-efficient road transport vehicles (the "Clean and Energy-Efficient Road Transport Vehicles Directive"), implemented in Ireland by the European Communities (Clean and Energy-Efficient Road Transport Vehicles) Regulations 2011, SI No 339 of 2011, contracting authorities are required to ensure that public contracts for the procurement of road transport vehicles promote the least emitting and most energy-efficient road transport vehicles.
In addition, under the European Communities (Energy End-use Efficiency and Energy Services) Regulations 2009, SI No 542 of 2009 (as amended by the European Union (Energy Efficient Public Procurement) Regulations 2011, SI No 64 of 2011), contracting authorities must consider the energy efficiency guidelines published by the Sustainable Energy Authority of Ireland (SEAI) when devising assessment criteria for the procurement of goods and services.
2 APPLICATION OF THE LAW TO ENTITIES AND CONTRACTS
2.1 Which public entities are covered by the law (as purchasers)?
The Public Sector Regulations apply to "contracting authorities". A "contracting authority" is defined as "the State, a local authority or a public authority or an association comprising one or more local authorities or public authorities, or local authorities and public authorities". A "public authority" is, in turn, defined as "any body corporate, not having an industrial or commercial character, that is established for a public purpose, and – (a) is financed wholly or substantially by the State, a local or regional authority or another public authority; or (b) is subject to management supervision by such a body; or (c) has an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, a local or regional authority or another public authority". This definition is based on the concept of a "body governed by public law" under the Directives.
The Utilities Regulations apply to "contracting authorities" and "public undertakings" which are engaged in one of the activities specified in the Utilities Regulations. A "public undertaking" is one over which a contracting authority may exercise a dominant influence.
The Defence Procurement Regulations also apply to "contracting authorities" as defined in the Public Sector Regulations. The Defence Procurement Regulations also apply to public undertakings and "contracting entities", which includes a private sector entity engaged in a prescribed activity under a special or exclusive right granted by the relevant Irish competent authority.
At national level, the Green Book applies to Government departments, local and regional authorities and other State bodies.
2.2 Which private entities are covered by the law (as purchasers)?
The Public Sector Regulations do not apply to private entities. The Utilities Regulations apply to private entities only if (i) they are engaged in one of the utility activities specified in the Utilities Regulations, and (ii) they do so on the basis of special and exclusive rights granted by the State.
Under Regulation 23 of the Utilities Regulations, private utility entities will not be covered by the rules if they can demonstrate, to the satisfaction of the European Commission, that the utility activity in which they are engaged is "directly exposed to competition". However, no such exemption has yet been granted by the European Commission in respect of any regulated utility activity in Ireland.
As noted above, the Defence Procurement Regulations apply to a "contracting entity" which can include a private sector entity engaged in a prescribed activity under a special or exclusive right granted by the relevant Irish competent authority.
2.3 Which types of contracts are covered?
Both the Public Sector Regulations and the Utilities Regulations cover contracts for works, supplies and services. While the definition of works contracts, supplies contracts and services contracts broadly follow those in the Directives, the Regulations do not make any express reference to the requirement for such contracts to be "concluded in writing".
The Defence Procurement Regulations apply to contracts awarded in the fields of defence and security for: (a) the supply of military equipment, including any parts, components or subassemblies; (b) the supply of sensitive equipment, including any parts, components or subassemblies; (c) works, supplies and services directly related to the equipment referred to in paragraph (a) or (b) for any and all elements of its life cycle; or (d) works and services for specifically military purposes or sensitive works and sensitive services.
2.4 Are there financial thresholds for determining individual contract coverage?
The financial thresholds are revised by the Commission every two years and published in the Official Journal of the European Union ("OJEU"). The Regulations provide that the Minister for Finance shall inform contracting authorities in writing of any revised thresholds published by the Commission in the OJEU. The revised thresholds (most recently published in the OJEU on 30 November 2011 and effective from 1 January 2012 to 31 December 2013) automatically apply under the Regulations on publication.
The current thresholds for the application of the Public Sector Regulations (Regulation 4) are: (a) €130,000 for services or supplies procured by central government authorities such as government departments; (b) €200,000 for services or supplies procured by other public bodies; and (c) €5,000,000 for a public works contract. The equivalent thresholds for the application of the Utilities Regulations (Regulation 12) are: (a) €5,000,000 for a works contract; and (b) €400,000 for a supplies or services contract.
The current thresholds for the application of the Defence Procurement Regulations are: (a) €412,000 for supplies and services contracts; and (b) €5,150,000 for works contracts.
2.5 Are there aggregation and/or anti-avoidance rules?
Yes. Regulation 6(4) of the Public Sector Regulations implements Article 9(3) of the Public Sector Directive providing that "a contracting authority shall not subdivide a works project, or a proposed purchase of a specified quantity of supplies or specified services so as to prevent the project or purchase from coming within the scope of these Regulations". Regulation 13 of the Utilities Regulations and Regulation 6(4) of the Defence Procurement Regulations contains a similar obligation.
In addition to the express prohibition on subdivision of contracts, all of the Regulations require the aggregation of contracts for supplies or services "of the same kind" (respectively) awarded, or to be awarded within a one-year period and, subject to certain exceptions in the case of lots of low value, the aggregation of contracts being awarded at the same time in the form of separate lots.
2.6 Are there special rules for concession contracts and, if so, how are such contracts defined?
Yes. The Public Sector Regulations apply to public works concession contracts with a value equal to, or greater, than the relevant EU threshold. A public works concession contract is defined in Regulation 3(1) of the Public Sector Regulations as: "a contract of the same kind as a public works contract except that the consideration to be given for the work to be carried out under the contract consists only of (a) the right to exploit the work, or (b) that right together with the payment of money".
The obligations on public contracting authorities with respect to works concessions are limited primarily to a requirement to advertise the contract in the OJEU and to allow sufficient time (at least 52 days) for responses and the provision of additional information. In addition, Regulations 76 and 77 provide that a concessionaire that is not a contracting authority shall comply with the above obligations if awarding a works contract to a third party.
The Public Sector Regulations do not apply to public service concession contracts. These are defined in Regulation 3(1) as: "a contract of the same kind as a public service contract except that the consideration to be given for supplying the relevant service consists only of (a) the right to exploit the service, or (b) that right together with the payment of money".
The Utilities Regulations and the Defence Procurement Regulations do not apply to either works concession contracts or service concession contracts.
3 AWARD PROCEDURES
3.1 What types of award procedures are available? Please specify the main stages of each procedure and whether there is a free choice amongst them.
In line with the Directives, Regulation 28 of the Public Sector Regulations provides for the use of the open, restricted and negotiated procedures. Regulation 29 of the Public Sector Regulations also provides for use of the competitive dialogue procedure. While public contracting authorities are free to use the open or restricted procedure, the competitive dialogue and negotiated procedures can only be used in specified circumstances.
Regulation 42 of the Utilities Regulations provides for a free choice for utilities (public and private) amongst the open, restricted and negotiated procedures.
Under Regulations 23-30 of the Defence Procurement Regulations, a contracting authority may award a contract under the restricted, negotiated or competitive dialogue procedures.
3.2 What are the minimum timescales?
In line with the Directives, Regulation 46 of the Public Sector Regulations, Regulation 47 of the Utilities Regulations and Regulation 36 of the Defence Procurement Regulations set out the rules governing minimum timescales.
The Public Sector Regulations provide that when fixing the deadline for receipt of tenders or requests to participate, contracting authorities should take account of the complexity of the contract and allow sufficient time for submitting the necessary information and preparing tenders.
The main minimum time-limits, which are generally reckoned from the date of dispatch of the notice to the OJEU, are as follows.
In cases involving an open procedure, the minimum timescales are: (i) 52 days for the receipt of tenders; or (ii) no less than 22 days in circumstances where a prior information notice ('PIN') has been published.
In the case of restricted, negotiated and competitive dialogue procedures, the minimum timescales are: (i) 37 days for the receipt of expressions of interest/requests to participate; (ii) 40 days from the date of the invitation to tender for the receipt of tenders under restricted procedures; or (iii) no less than 22 days for the receipt of tenders under the restricted procedure if a PIN has already been published. Under the negotiated procedure or in competitive dialogue, the time allowed for receipt of tenders may be set by the contracting authority subject to an absolute minimum of 10 days.
The minimum times for responses may be reduced where contract notices are transmitted electronically to the OJEU and all tender documentation is made available electronically or where genuine urgency renders the standard time-limits impracticable.
Regulation 47 of the Utilities Regulations and Regulation 36 of the Defence Procurement Regulations make provision for similar timescales.
3.3 What are the rules on excluding/short-listing tenderers?
In line with the Directives, Regulation 53(1) of the Public Sector Regulations provides for the mandatory exclusion of any person who has been convicted of an offence involving participation in a prescribed criminal organisation, corruption, fraud or money laundering. Regulation 53(4) sets out the non-mandatory criteria on the basis of which a contracting authority may choose to exclude tenderers (such as bankruptcy, insolvency, professional misconduct, failure to pay social security contributions or tax, or provision of a false or misleading statement to a contracting authority).
Regulation 56(4) of the Utilities Regulations provides that where the contracting entity is a public contracting authority, the mandatory exclusion criteria in Regulation 53(1) of the Public Sector Regulations must apply.
Regulation 42 of the Defence Procurement Regulations is similar to Regulation 53 of the Public Sector Regulations but also extends the mandatory exclusion to persons convicted of terrorist offences.
While Article 45 of the Public Sector Directive and Article 39 of the Defence Procurement Directive provide that Member States may provide for a derogation from the mandatory exclusion criteria, in the case of overriding requirements in the general interest, Ireland did not include this option in the Regulations.
As regards the short-listing of tenderers, the Public Sector Regulations, in line with the Public Sector Directive, provide that tenderers may be short-listed on the basis of criteria relating to the economic and financial standing and the technical and professional ability of the candidate. Regulation 41 extends a similar ability to authorities to short-list candidates under the Defence Procurement Regulations.
In the utilities sector, Regulation 56 of the Utilities Regulations provides that candidates may be short-listed in accordance with objective rules and criteria. In each case, the awarding authority is required to short-list a sufficient number of candidates to ensure effective competition.
3.4 What are the rules on evaluation of tenders?
The Regulations do not provide for any express rules governing the evaluation of tenders. However, the Green Book recommends that the evaluation of tenders should be carried out by a suitably competent team, including independent representation where required. Both the evaluation and the award process must be demonstrably objective and transparent and based solely on the published criteria, which is best achieved by the use of a scoring system based on all the relevant weighted criteria, indicating a comparative assessment of tenders under each criterion.
3.5 What are the rules on awarding the contract?
In line with the Directives, Regulation 66 of the Public Sector Regulations, Regulation 57 of the Utilities Regulations and Regulation 55 of the Defence Procurement Regulations state that an awarding authority shall award contracts on the basis of either the most economically advantageous tender or the lowest price tender.
Where a contract is awarded on the basis of the most economically advantageous tender, the contracting authority is required to adopt criteria linked to the subject matter of the contract, which might include, in addition to price, criteria such as running costs, servicing costs, level of after-sales service, technical assistance, technical merit, or environmental characteristics. The award criteria are required to be advised to tenderers in advance either in the contract notice or the tender documents, including the relative weighting for each criterion. Where it is not possible to indicate criteria weightings in advance, the criteria must be listed in descending order of importance.
3.6 What are the rules on debriefing unsuccessful bidders?
Regulation 6 of both the Public Sector Remedies Regulations and the Utility Remedies Regulations and Regulation 68 of the Defence Procurement Regulations require that the notice provided to unsuccessful tenderers must include a summary of the reasons for the rejection of the tender, which may be satisfied by setting out the relative scores obtained by the unsuccessful and successful tenderers respectively. Questions have been raised as to whether the latter provision fully implements the relevant provision of the Remedies Directive, particularly in light of Court of Justice case law (for example Evropaïki Dynamiki, Case T-95/05, 10 September 2008).
3.7 What methods are available for joint procurements?
In line with the Directives, Regulation 8 of the Public Sector Regulations, Regulation 31 of the Utilities Regulations and Regulation 7 of the Defence Procurement Regulations provide that contracting entities may enter into contracts through central purchasing bodies.
In 2009, Ireland established the National Procurement Service ("NPS") in order to better leverage public service buying power through aggregated contracts. In July 2013, the Government announced the launch of a new Office of Government Procurement ("OGP") to lead the reform of procurement in the public service. The OGP will centralise the procurement of common goods and services, such as ICT, fleet and professional services. The establishment of the OGP follows the recommendations of an external review ("Capacity and Capability Review of the Central Procurement Function" dated August 2012) commissioned by the Department of Public Expenditure and Reform and carried out by Accenture, which found that there is a procurement addressable spend in the Irish public sector of approximately €7 billion. The review estimated that implementation of its recommendations, over a three-year period, could yield potential annual savings in the range of €249 to €637 million.
3.8 What are the rules on alternative/variant bids?
In line with the Directives, Regulation 24 of the Public Sector Regulations, Regulation 38 of the Utilities Regulations and Regulation 17 of the Defence Procurement Regulations state that tenderers may submit variants (or alternate bids) if (i) the contract is to be awarded on the basis of the most economically advantageous tender, and (ii) the contract notice specifically authorises variants.
4 EXCLUSIONS AND EXEMPTIONS (INCLUDING IN-HOUSE ARRANGEMENTS)
4.1 What are the principal exclusions/exemptions?
Regulations 10 to 15 of the Public Sector Regulations set out the principal categories of public contracts which are excluded from the Regulations. These mirror the categories of excluded contracts provided for in the Public Sector Directive, and include, for example: contracts relating to certain telecommunications networks and services; contracts accompanied by special security measures; contracts awarded further to international agreements or procedures; contracts for the acquisition of land or existing buildings; employment contracts; contracts in relation to acquisition of broadcasting material; contracts in relation to arbitration, the provision of certain financial services or research and development; public service concession contracts; and public service contracts awarded to another contracting authority on the basis of an exclusive right.
Regulations 14 to 23 of the Utilities Regulations provide that, in the case of utilities, the following categories of contract are also excluded, in addition to the exclusions which apply in the public sector: works concession contracts; contracts for the purpose of resale or lease to third parties; contracts awarded by certain utility companies for the purchase of water, energy or fuel for the production of energy; contracts awarded to an "affiliated undertaking" (essentially a group company); and contracts awarded by or to a joint venture formed exclusively for the purposes of carrying out a utility activity.
Regulation 23 mirrors the exemption provided for in Article 30 of the Utilities Directive for categories of utility activity which the contracting entity can demonstrate, to the satisfaction of the European Commission, are "directly exposed to competition". No "Article 30" exemption has yet been granted in respect of any regulated activity in Ireland.
In addition, both the Public Sector Regulations and the Utilities Regulations provide for certain specific instances in which regulated contracts may be awarded by way of the negotiated procedure without the prior publication of an OJEU contract notice.
For public contracts below the EU thresholds, the "Green Book" provides for an exclusion from the general requirement to tender in the case of "justifiably exceptional circumstances".
In line with Article 13 of the Defence Procurement Directive, Regulation 9 of the Defence Procurement Regulations sets out a list of specific exclusions where the Defence Procurement Regulations do not apply to the award of contracts. Such instances include where the Government would be obliged to supply information which it considered contrary to the essential interests of the security of the State or where the contract is for the purposes of intelligence activities.
4.2 How does the law apply to "in-house" arrangements, including contracts awarded within a single entity, within groups and between public bodies?
As noted above, in the case of utilities, the Utilities Regulations make specific provision for the exclusion of certain types of "inhouse" contracts such as contracts awarded by a utility to an "affiliated undertaking" (essentially a group company) and for contracts awarded by or to certain types of joint venture.
The Public Sector Regulations and the Defence Procurement Regulations do not make any express provision for "in-house" arrangements, however it is expected that the Irish Courts would follow the general principles established in this regard by the Court of Justice in Teckal v. Comune di Viano ((1999) ECR I-8121).
5.1 Does the legislation provide for remedies and if so what is the general outline of this?
On 25 March 2010, two new sets of Regulations came into force, which implement in Ireland Directive 2007/66/EC of 11 December 2007, amending Council Directives 89/665/EEC, and 92/13/EEC, with regard to improving the effectiveness of review procedures concerning the award of public contracts (the "Remedies Directive").
The European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010, SI No 130 of 2010 (the "Public Sector Remedies Regulations") provide for remedies and enforcement procedures in respect of contracts governed by the Public Sector Regulations.
The Public Sector Remedies Regulations provide that public contracting authorities must observe a standstill period of at least 14 days if the notice to an unsuccessful tenderer is sent by electronic means, or 16 days if by other means. However, Ireland has opted to exclude contracts awarded on the basis of a framework agreement or a dynamic purchasing system from the requirement to observe a standstill period.
Under Regulation 8 an "eligible person" may apply to the Court for an interlocutory order (for example, to correct an alleged infringement or to suspend the operation of a procurement procedure or a decision of the contracting authority) or for review of a contracting authority's decision to award the contract to a particular tenderer. Regulation 9 provides that the remedies which may be awarded by the Court include: interlocutory orders; the set aside or variation of a decision of the contracting authority; a declaration that a reviewable contract is ineffective (Ireland opted to provide for prospective ineffectiveness only, such that contractual obligations already performed are not affected by such a declaration); "alternative penalties" (i.e. a civil financial penalty of up to 10 per cent of the contract value, and/or terminating or shortening of the contract duration); and/or any necessary consequential order.
The European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010, SI No 131 of 2010 (the "Utility Remedies Regulations", together with the Public Sector Remedies Regulations, the "Remedies Regulations") provide for almost identical remedies and enforcement procedures in respect of contracts governed by the Utilities Regulations. Regulations 65-76 provide for very similar remedies and enforcement procedures for contracts covered by the Defence Procurement Regulations.
A revised version of Order 84A of the Rules of the Superior Courts was brought into force on 8 September 2010 to reflect the amendments introduced by the Remedies Regulations. Order 84A provides for the procedures and format for applications to Court under the specialised form of judicial review provided for in the Remedies Regulations.
5.2 Can remedies be sought in other types of proceedings or applications outside the legislation?
For contracts which are not subject to the national Regulations, enforcement could be sought under the normal rules of judicial review.
Order 84 of the Rules of the Superior Courts provides that an application for leave to seek judicial review must be made promptly and, in any event, within three months from the date when grounds for the application first arose, or within six months where the relief sought is certiorari (a remedy whereby a decision of a public body which has been arrived at in excess of its jurisdiction is quashed). However, the Court retains discretion to extend this time period in circumstances where it is satisfied that there is good reason for doing so.
5.3 Before which body or bodies can remedies be sought?
Applications for review are made to the Irish High Court. It is possible for a complainant to apply to have proceedings transferred to the specialist commercial division of the High Court, which would involve a more fast-tracked procedure.
National remedies rules do not make any provision for an application to be made to the contracting authority for review (although an informal internal review procedure may sometimes be provided for by certain contracting authorities).
5.4 What are the limitation periods for applying for remedies?
Under Regulation 7 of the Remedies Regulations and Regulation 69 of the Defence Procurement Regulations, an application for an interlocutory order, or for review of a contracting authority's decision to award a contract, must be made within 30 calendar days after the applicant was notified of the relevant decision or after the applicant knew, or ought to have known, of the infringement alleged. The 30-calendar-day period is a substantial reduction of the time period which previously applied (which was three months from the date when grounds for the application first arose, as for normal judicial review procedures) and poses a significant challenge to parties who wish to challenge an award decision. Order 84A of the Rules of the Superior Courts allows the Court to extend this period if the Court considers there is good reason to do so.
Regulation 8(2) of the Remedies Regulation and Regulation 70 of the Defence Procurement Regulations provide that if a person applies to Court (and the contract has not yet been concluded) the award procedure is automatically suspended until either the case has been determined or terminated or the Court specifically grants leave to lift the suspension. In QDM Capital Limited v. Athlone Institute of Technology, (3 June 2011) the High Court considered for the first time a (successful) application by a public contracting authority to lift the automatic suspension period.
An application for the remedy of ineffectiveness must generally be made within six months after the conclusion of the relevant contract. However, this period may be reduced to 30 calendar days in certain cases (see question 5.5 below).
5.5 What measures can be taken to shorten limitation periods?
An application seeking the remedy of ineffectiveness must generally be made within six months after the conclusion of the relevant contract.
However this period is shortened to 30 calendar days, in cases where: (i) the contracting authority has published an award notice in the OJEU and where, in the case of a contract awarded without prior publication of a contract notice in the OJEU, the award notice sets out the justification for not publishing such notice; (ii) the contracting authority has notified each tenderer or candidate concerned of the outcome of the tender process, and that notice contained a summary of the reasons for the rejection of their tender in accordance with the requirements of the Remedies Regulations; and (iii) a contract is based on a framework agreement or a dynamic purchasing system and where the contracting authority notified each tenderer or candidate concerned of the outcome of the tender process in accordance with the requirements of the Remedies Regulations.
5.6 What remedies are available after contract signature?
Under both the Remedies Regulations and the Defence Procurement Regulations, the Court must declare a concluded contract ineffective where: (i) the contracting authority has concluded the contract without first publishing the required contract notice in the OJEU; (ii) the contracting authority has concluded the contract in breach of its obligation to observe either the standstill period or the automatic suspension of the award procedure (which applies on the issue of proceedings – see question 5.4) and such breach was combined with another infringement of the procurement Regulations; and (iii) the contracting authority has infringed the rules on the award of a contract under a framework contract or a dynamic purchasing system and where the value of such contract equals or exceeds the current relevant threshold values – see question 2.4 above. A contracting authority can avoid the mandatory application of the remedy of ineffectiveness in case (i) above by, publishing a voluntary ex ante transparency notice in accordance with Commission Regulation 1150/2009 and voluntarily observing a standstill period, and in case (iii) above, by informing tenderers of the results of the award process in accordance with the requirements of the Remedies Regulations and voluntarily observing a standstill period.
It is not clear under the Irish rules whether the Court may make a declaration of ineffectiveness outside the mandatory categories listed above, although it appears that the Remedies Regulations are drafted broadly enough to allow it to do so.
The Remedies Regulations and the Defence Procurement Regulations allow a Court discretion to decline to declare a contract ineffective, even in the mandatory categories listed above, if it finds that overriding reasons relating to a general interest require that the contract should be maintained. In such cases, the Court is obliged to impose an "alternative penalty" – i.e. either or both, a civil financial penalty of up to 10 per cent of the value of the contract, or order the termination or shortening of the duration of the contract.
Finally, it appears that other penalties (e.g. damages) may also be awarded after contract signature, although an award of damages is not considered sufficient to constitute an "alternative penalty" where the Court declines to apply the remedy of mandatory ineffectiveness.
5.7 What is the likely timescale if an application for remedies is made?
In a standard case, an application under the Remedies Regulations may be expected to take up to two to three years. As noted above, however, where a case is transferred to the commercial division of the High Court, it is normally heard within a period of 6 to 12 months.
In cases where an application is made for interim measures, such as an interlocutory injunction, however, the issue is likely to be heard within a matter of two to three days.
5.8 What are the leading examples of cases in which remedies measures have been obtained?
Some of the leading cases on remedies/enforcement before the Irish Courts are set below:
SIAC Construction v. Mayo County Council  IESC 39 – this case considered, inter alia, the degree of discretion allowed to a contracting authority in public procurement decisions. It found that the appropriate test, similar to that applied to a Community institution in a comparable situation, is that a contracting authority enjoys a "wide discretion" as to the criteria by which it will judge tenders, and that its decisions will be annulled only if a "manifest error" can be demonstrated.
Danninger v. Bus Atha Cliath  IEHC 29 – the High Court held that there is no prohibition on a State body requesting a "best and final" offer from qualified tenderers in a restricted procedure, however the requirement of equal treatment and transparency requires that prospective tenderers be notified that a "best and final offer" may be sought. In this case, the possibility that "best and final offers" might be required was included in the conditions of tendering.
Advanced Totes Ltd. v. Bord na gCon  IESC 17 – the Supreme Court held that a contract entered into between Bord na gCon and a tenderer for the provision of totalisator services in greyhound racing stadia operated by Bord na gCon was null and void by reason of non-compliance with the Directives. The Court held that the complainant was prejudiced by the fact that the criteria applied in awarding the contract differed significantly from the award criteria set out in the invitation to tender, and stated that the procedure was "seriously lacking" in the necessary transparency.
Following the quashing of the original decision to award the contract in the first Bord na gCon case, in Advanced Totes v. Bord na gCon (no.2) 2006 IEHC 161, the complainant objected to an interim contract entered into by Bord na gCon with the original tenderer. The complainant argued that this interim arrangement would essentially lead to continuation of the original (illegal) contract and give an unfair advantage to the original tenderer as it had already installed its IT equipment in the stadia. The Court held that it would not be appropriate to grant a mandatory injunction to remove the equipment from Bord na gCon's premises as this would effectively determine the substantive issue. The Court stated, however, that a prohibitive injunction prohibiting the use of this equipment may be granted until either the tender complied with EU law or the hearing of the main action.
In Ryanair v. Minister for Transport  IEHC 171, the High Court considered Regulation 2408/92, which allows Member States to impose a public service obligation in respect of scheduled air services, upon certain conditions being met. In relation to tenders for such contracts, the High Court held that a failure on the part of a successful tenderer to execute a contract does not conclude the tender process and require the contract to be put out to tender afresh. The case also established that only material amendments to the contract, following the withdrawal of the successful tenderer, required a new invitation to tender. As a result, a minor change to the contract did not necessitate a new tender and the award of the contract to the second placed bidder Aer Arann was not outside the terms of Regulation 2408/92.
In Smart Telecom Plc v. Radio Teilifis Eireann  IEHC 176, the High Court held that there is no requirement to communicate an answer to a question from one bidder to all interested parties, where the answer was merely a reiteration of the existing terms and did not alter in any way the original offer. The Court held that there was no obligation to re-tender the contract in these circumstances.
In Release Speech Therapy Ltd v. HSE.  IEHC 57, the applicant, which was the sole tenderer for a contract for the provision of speech therapy services to the Health Services Executive, challenged the contracting authority's decision to not to award a contract. The High Court refused judicial review of the decision on the grounds that the contracting authority was entitled to conclude that the applicant was not qualified. The Court rejected the applicant's argument that the contract requirements section of the Invitation to Tender was misleading on the basis that the appropriate test of the obligation of transparency was whether a "reasonable well informed and normally diligent tenderer" would have understood the Invitation to Tender as requiring both individual and group therapy, such that those offering group therapy only were excluded. The Court placed emphasis on the expert evidence provided on behalf of the Health Service Executive as to the interpretation of the Invitation to Tender. The Court was further influenced by the fact that the applicant had been given the opportunity to expand the services it was willing to provide at a tender evaluation meeting, but had declined to amend its application in the circumstances.
In two recent cases QDM Capital Limited v. Athlone Institute of Technology [unreported, High Court, 3 June 2011 and 6 July 2011] and QDM Capital Limited v. Galway City Council  IEHC 534, the High Court considered the rules for determining whether "mixed" contracts e.g., works/services or works/supplies contracts should be deemed to be works, supplies or services contracts for the purposes of applying the financial thresholds for mandatory publication of an OJEU Contract Notice. In both cases, the Court approved and applied the "main purpose" test, citing with approval a number of leading Court of Justice cases.
5.9 What mitigation measures, if any, are available to contracting authorities?
Following the introduction of the remedy of mandatory ineffectiveness in the Remedies Regulations, contracting authorities are increasingly seeking to insert terms into tender documents which seek to limit or exclude their liability to a successful tenderer in the event that the contract were to be set aside at a later date.
6 CHANGES DURING A PROCEDURE AND AFTER A PROCEDURE
6.1 Does the legislation govern changes to contract specifications, changes to the timetable, changes to contract conditions (including extensions) pre-contract award? If not, what are the underlying principles governing these issues?
The Regulations do not provide expressly for changes to contract specifications, timetable or contract terms and conditions pre-contract award. The underlying principles governing these issues are the Treaty principles of non-discrimination, equal treatment, transparency, and proportionality, as interpreted by decisions of the European and Irish Courts.
6.2 To what extent are changes permitted to final tenders (pre- and post-contract award)?
Changes are not generally permitted to be made to final tenders prior to the award of the contract. Limited exceptions to this general rule may arise (subject to compliance with the principle of equality of treatment) in the context of the negotiated or competitive dialogue procedures or where an awarding authority has reserved the right to seek better and further offers (BAFOs).
Changes may be made to final tenders post contract award only where such changes are in favour of the awarding authority (e.g., a further price reduction by the tenderer).
6.3 To what extent are changes permitted post-contract signature?
There are no express rules regarding post-contract changes provided for in the Regulations. However, the Irish Courts have indicated that they will follow Court of Justice precedent in this area, including the leading decision in Pressetext (C-454/06, 19 June 2008). In Copymoore (discussed in section 8 below), the High Court found that changes made by means of administrative decision to the terms of a framework agreement after contract signature were inconsistent with the EU procurement rules, including the Pressetext case.
7 PRIVATISATIONS AND PPPS
7.1 Are there special rules in relation to privatisations and what are the principal issues that arise in relation to them?
There are no special rules in relation to privatisations under Irish law. There have been a large number of privatisations in Ireland and compliance with State aid rules is the principal issue which arises in relation to them. In this regard, the Code of Practice for the Governance of State Bodies (see question 1.1 above) requires that the disposal of assets of State bodies, or the granting of access to public property or infrastructure, should be by way of auction or competitive tendering process where the value of the assets/property is at or above €70,000.
7.2 Are there special rules in relation to PPPs and what are the principal issues that arise in relation to them?
There are no special national rules in relation to PPPs. Ireland is, however, obliged to note the Interpretative Communication on the application of Community law on Public Procurement and Concessions to Institutionalised Public-Private Partnerships (IPPP) adopted by the European Commission on 5 February 2008.
8.1 Is there a culture of enforcement either by public or private bodies?
While in the past, there have been only a small number of enforcement actions, in more recent times there has been an increased focus on public sector compliance with the procurement rules, given increased competition for contracts in the current economic climate and following a number of high-profile audits and investigations by the Comptroller and Auditor General. The latter were followed in some cases by additional investigations by the Committee of Public Accounts, a standing committee appointed to examine and report to Dáil Eireann (the Irish Parliament) on Comptroller and Auditor General Reports.
The Irish Competition Authority ("Authority") has also been involved in pursuing a number of cases of alleged bid-rigging.
8.2 What national cases in the last 12 months have confirmed/classified an important point of public procurement law?
In O'Kelly Brothers Civil Engineering Company Limited v. Cork City Council & Another (22 February 2013), the High Court refused an application by O'Kelly Brothers for an interlocutory injunction to suspend the performance of a below-threshold contract for the demolition of 66 unoccupied dwellings as part of the Cork City North West Regeneration Project. The High Court confirmed that the legal test for deciding on an interlocutory injunction for suspension of a public contract was that established in the leading case of Campus Oil v. Minister for Industry and Energy  IR 88 (namely, (i) is there a fair issue to be tried? (ii) would damages be an adequate remedy? and (iii) where does the balance of convenience lie?). The Court indicated that, in procurement cases, damages are generally an adequate and appropriate remedy and also found that the balance of convenience favoured the contract being allowed to continue, given the strong public interest in the project. Interestingly, the High Court suggested that the contract might have attracted cross-border interest (and therefore the application of the EU Treaty principles) notwithstanding its relatively low value (€500,000).
On 29 May 2013, the High Court gave judgment in Copymoore Limited and others v. The Commissioners of Public Works. The Court found that a circular issued by the Minister for Public Enterprise and Reform mandating the use of certain framework agreements (but published after the award of the framework agreements) was incompatible with EU law, where the tender documents had stated that public sector purchasers would not be bound to purchase services exclusively under the framework agreements. Hogan J noted that the issue created was novel as it amounted to a de facto amendment of the terms of a tender by way of Government circular.
Finally in two cases decided on 16 July 2013, Baxter Healthcare v. HSE and Fresenius Medical Care v. HSE, the High Court confirmed that the standard of review in procurement cases is that of manifest error. The Court indicated that public bodies would be given a wide margin of appreciation in the evaluation of tenders. Peart J stated that the Court must not lightly interfere in the tender process, including the result, and should do so only where a manifest error has occurred – in other words, a clear error, which prompts the Court to ask itself could this possibly be correct and to answer that question in the negative. The Court noted that the duty is on the tenderer to expressly put before the contracting authority all relevant information and that the contracting authority is not obliged to seek out additional information by way of clarification. The Court also found that there was a distinction to be made in relation to the application of the general principles of equal treatment and transparency, depending on whether the contract under review was an Annex IIA contract or an Annex IIB contract.
9 THE FUTURE
9.1 Are there any proposals to change the law and if so what is the timescale for these and what is their likely impact?
In December 2011, the Commission published proposals to reform the current Public Sector Directive and Utilities Directive and to adopt a third Directive to regulate the award of concession contracts.
In July 2013, provisional agreement on the text of the new Directives was reached between the EU Council, the Commission and the Parliament. The EU Parliament is expected to review and approve the three proposals before the end of 2013. Once adopted, Ireland will have two years to implement the Directives into national law.
This article appeared in the 2014 edition of The International Comparative Legal Guide to: Public Procurement; published by Global Legal Group Ltd, London.
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