Procurement Rules

The public procurement rules will change from 1 October 2011. New time limits for bringing claims for breach of the rules are amongst the most important changes.

Time Limits For Bringing Claims

The time allowed for claimants to bring claims for breach of the Public Contracts Regulations 2006 and the Utilities Contracts Regulations 2006 (the "Regulations") will change on 1 October 2011 .

Prior to 1 October 2011, aggrieved bidders had to bring claims "promptly" and in any event within three months of when the grounds for the claim first arose unless the court considered that there was a good reason for extending the time limit. The Government was forced to review these time limits after the Court of Justice of the EU held that the time limits were not compatible with the EU public procurement rules .

The UK Government was required to amend this time limit because:

  • Aggrieved bidders may not have an effective remedy if they could not be expected to know of the grounds for their claim at the time that the grounds arose. The time period should commence from when the bidder knew, or ought to have known, of the infringement (the "date of knowledge").
  • The requirement to bring claims promptly was unclear. As the court had the discretion to dismiss an application if it was not brought "promptly" (even if brought within three months), the rules were uncertain. The requirement to bring claims "promptly" should be replaced with a clear minimum time limit for bringing claims.

The new time limits for bringing a claim are set out in the Public Procurement (Miscellaneous Amendments) Regulations 2011 (the "2011 Regulations"), and will come into force on 1 October 2011.

New Time Limits

The new time limits are:

  • If the date of knowledge is after 1 October 2011, aggrieved bidders must bring a claim
  • within 30 days of the date of knowledge. If the court considers that there is a good reason for doing so, it may extend the time period up to three months from the date of knowledge.
  • If the date of knowledge is before 1 October 2011, aggrieved bidders must bring a claim within three months of the date of knowledge. This period can be extended if the court considers that there are good reasons to do so.

Automatic Suspension Of Contract Award Procedure

Under the Regulations, a contracting authority (including a utility under the Utilities Contracts Regulations) may not enter into a contract with a successful bidder once proceedings have been commenced in respect of the authority's decision to award that contract. This is known as the 'automatic suspension' of the contract award procedure. Due to a drafting oversight in the Regulations, prior to the 2011 Regulations coming into force, the contract award procedure was only suspended two days after the aggrieved bidder sent the claim form to the contracting authority.

Therefore, in theory, a contracting authority could sign a contract with the successful bidder during the two days immediately after the claim form was sent, even if the authority had received the claim form in less than two days.

The 2011 Regulations change the automatic suspension provisions so that suspension occurs when the contracting authority is aware that the claim form has been issued.

Other Changes In The 2011 Regulations

There are a number of other changes resulting from the 2011 Regulations. These include:

  • from 1 October 2011, the Office of Government Commerce will cease operations. Its functions will be transferred to the Cabinet Office; and changes to the criteria for rejecting bidders under r.23 of the Public Contracts Regulations and r.26 of the Utilities Contracts Regulations. In particular, the contracting authority will only be required to exclude a bidder for corruption or the offence of bribery if the bidder was involved in active corruption.

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