UK: UK to improve bidders’ ability to challenge faulty procurements

The UK’s Office of Government Commerce has launched a consultation on proposed changes to the procurement rules, which are designed to improve a disgruntled bidder’s options for challenging a defective procurement procedure.

The proposals come about as a result of the judgment in the European Court of Justice (ECJ) decision in the case of Alcatel. The ECJ held that there must be a gap between the decision to award a contract and the start of that contract in order to allow for challenges to be made.

The OGC proposes that the UK rules will be changed to introduce a 10-day mandatory standstill period between the notification of the award decision and the date of contract conclusion. That should serve to encourage appeals against procurement procedures in the UK. Under the existing rules a simultaneous award and execution of contract leaves a disgruntled contractor with a damages claim as his only potential remedy. Damages claims are cumbersome and complex. Under the new rules disgruntled contractors will have a guaranteed window in which to seek an injunction to prevent the contract being entered into – with the possibility of obtaining a re-run of the procurement as a more attractive remedy.

This development is likely to increase the number of challenges to procurement procedures - it represents an opportunity for contractors who feel they have not been playing on a level playing field and a corresponding risk to utility companies and public sector bodies going out to tender.

The OGC’s consultation paper can be found by clicking on the following link:

http://www.ogc.gov.uk/embedded_object.asp?docid=1004104

The consultation closes on Monday 10 October.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 13/09/2005.