Procurement and Competition Law
Throughout the 1990s, EU procurement directives have been
implemented in the UK so as to bring most major public works and
utilities contracts within the regulatory regime of EU procurement
law. This means that contracts let in any way which breaches
specific procedural rules, or general principles of transparency
and equality, can be challenged.
The consequences for project contractors can be serious and
costly. Dissatisfied unsuccessful tenderers may be able to claim
damages for loss of the opportunity to compete fairly for the
contract or for the profit they stood to make. Projects can be
delayed by aggrieved tenderers obtaining injunctive relief to
require tender documents or procedures to be corrected.
For these reasons, public authorities and utilities often
require advice about their procurement procedures in order to
prevent breach of the regulations, or if the legality of a contract
award is challenged by a tenderer. Contractors, may want advice,
too, if they believe their position has been prejudiced by the way
in which the tender was handled.
Competition law now similarly concerns parties in the
construction and technology (and other) industries. The
Competition Act 1998 has increased the powers of the UK competition
authorities and means that all parties involved in commercial
activities must consider whether anything they do can be regarded
as unlawfully anti-competitive. Those in partnering agreements, for
example, need to know that their arrangements do not breach UK
competition law, while aggrieved parties seek advice on possible
challenges.
Keating Chambers at the Cutting Edge
The case of Harmon CFEM Facades (UK) Ltd
v The Corporation Officer of the House of Commons
ConLR 67 is one of the most important
decisions ever made by an English court on the impact of European
procurement law on the UK construction industry. It concerned
a high-profile project, Portcullis House, the recent addition
to Parliamentary accommodation at Westminster. The curtain
walling/fenestration contract was won by a British firm, although
Harmon, the British subsidiary of a French company, had submitted
the lowest tender. Harmon felt aggrieved by the way in which the
tendering process was carried out by the Parliamentary Works
Directorate (PWD) and challenged the legality of the award.
It was held that the PWD had 'deviated from the Public Works
Regulations procedures' in having 'flirted' with one particular
tenderer, and that the expressions 'overall value for money' and
'most economically advantageous' were too imprecise to be valid
criteria for declining to award on the basis of price.
Harmon were successful in their action to obtain substantial
damages from the House of Commons. Harmon were represented by
counsel from Keating Chambers in this landmark case
on procurement law.
Obtaining Advice and Other Assistance
Our involvement in procurement and competition law matters
extends beyond representing litigants in headline
cases. Members of Chambers routinely advise at early
stages of projects when the aim is to avoid the kind of
irregularities exposed in the Harmon case. Our clients include
project sponsors, lenders and contracting authorities and their
consultants.
We can also advise contractors wishing to protect their position
pending the outcome of the tendering process if they are concerned
about the procedures being followed. Unsuccessful and successful
tenderers may also require our advice on whether an award can be
challenged, while the client or commissioning institution may need
assistance in preparing itself for potential claims.
We can also help with other types of procurement matters. To
date, we have assisted in matters relating to the procurement of
goods and services such as books, stationery, energy, cleaning,
travel and maintenance. Similarly, the competition practice in
Keating Chambers, while focused on construction and engineering,
includes many other types of commercial relationship with
competition law implications.
Further Information
For further information on how our members can assist you, please contact Senior Clerk,
Nick Child in the first instance on +44 20 7544 2600. The teams of Clerks will be pleased to advise you on the member of Keating Chambers appropriate to your requirements.