UK: New Public Procurement Remedies Rules Published

Last Updated: 19 November 2009
Article by Susan Hankey and Siobhan Costello

The Public Contracts (Amendment) Regulations 2009 ("Amendment Regulations") have been published and will come into force on 20 December 2009. They implement Directive 2007/66/EC on improving the effectiveness of appeal procedures concerning the award of public contracts ("New Remedies Directive"), in England, Wales and Northern Ireland.

The Office of Government Commerce (OGC) has prepared an Explanatory Memorandum describing the changes being made through the Amendment Regulations. This includes a table illustrating how the provisions of the New Remedies Directive are transposed into the Amendment Regulations.

The New Remedies Directive applies also to utilities contracts. A separate set of utilities contracts amendment regulations will be adopted shortly. The utilities sector can in the meantime look to the Amendment Regulations to prepare for the changes coming into force in December 2009.

The New Remedies Directive both strengthens the available options for legal review of procurements and increases the range of available remedies. Member States have been given a degree of flexibility in its implementation. This is why the Office of Government Commerce (OGC) has carried out two consultations on the implementation of this Directive in the UK – see our earlier law-now.

The most significant changes introduced by the Amendment Regulations include:

  • the introduction of a new penalty of ineffectiveness, which will enable the Courts to strike down contracts that have been awarded in serious breach of the procurement rules
  • the introduction of two new penalties – civil financial penalties and contract shortening – which a Court can use as an alternative to ineffectiveness if it considers that there are important public interest reasons why the contract should continue. The Court has discretion on the size of civil financial penalties
  • the automatic suspension of a contract award procedure whenever legal proceedings are started in respect of a contract award decision.

Contractual ineffectiveness

  • Ineffectiveness will only be prospective, not retrospective meaning that it will only affect unperformed contractual obligations. Obligations that have been performed by a contractor will not therefore need to be undone
  • A civil financial penalty will be imposed at the same time as an ineffectiveness declaration
  • A declaration of ineffectiveness in respect of a framework agreement does not necessarily make specific contracts under that agreement ineffective. A separate declaration must be made in relation to each contract. However, each contract declared ineffective will not be separately subject to a civil financial penalty.

Standstill period

  • There is a new obligation to release the reasons for the award decision at the start of the standstill, rather than upon request, as is the case at present
  • There is a new obligation to allow extra time for tenderers to receive the standstill notice where the notice is sent using non-electronic means only
  • Contracting authorities must provide a precise statement as to when the standstill period is expected to end, and how the timing of its ending might be affected by any contingencies or the date before which the contracting authority will not enter into the contract/conclude the framework agreement
  • The end of the standstill period is midnight at the end of the 10th or 15th day after the relevant sending date. Where the last day of a standstill period is not a working day, the period is extended until midnight at the end of the next working day.

Commencement of proceedings

  • Proceedings are deemed to have commenced when the claim form is served in accordance with the requirements of the Amendment Regulations
  • There is no longer a requirement for a letter before action to be filed by the economic operator to inform the contracting authority of the breach and its intention to commence proceedings.

Notification of Excluded Applicants

The OGC believes that there are strong reasons for creating certainty as to the stages at which information should be given to economic operators as well as this being good practice. It has therefore included a new requirement obliging contracting authorities to notify participants when they are eliminated from a procurement process prior to contract award.

Transitional arrangements

The Amendment Regulations will not have any effect on a contract award procedure begun prior to 20 December 2009. A procedure is deemed to have commenced if:

  • a contract notice has been sent to the Official Journal
  • the contracting authority has advertised the fact that it is seeking offers or expressions of interest in a proposed contract, framework agreement or dynamic purchasing system; or
  • an economic operator has been contacted by the contracting authority looking for expressions of interests or offers, or the operator has responded to unsolicited expressions of interest or offers.

The Amendment Regulations will not apply to a specific contract awarded as part of a framework agreement or dynamic purchasing system established prior to 20 December 2009, or where a contract is awarded on or after that date following a procedure begun prior to it.

The OGC has also stated that it will publish guidance on the practical implication of the Amendment Regulations. We look forward to this with interest.

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

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 19/11/2009.

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