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Tenderers dissatisfied with the tendering process want to know
whether they have a claim against the party who awarded the
contract. Those who commission works in the private and
public/utilities sectors will increasingly need assistance in
scrutinising their own conduct as they face actions for damages and
injunctions in respect of their treatment of tenderers.
Keating Chambers’ involvement with procurement is not limited to
representation of litigants in headline decisions in the
courts. Its members routinely advise at early stages of
projects when the aim is to avoid the kind of irregularities
exposed in the Harmon case (see
below). Members of Keating Chambers advice is especially
sought by project sponsors, lenders and contracting authorities and
their consultants, all of whom wish to ensure compliance with the
regulatory regime.
Conversely, contractors may wish to protect their position
pending the outcome of the tendering process if they are concerned
about the procedures being followed. When the outcome is
known, both unsuccessful and even successful tenderers need to
understand the extent to which it is final or likely to be
susceptible to challenge, while the client/commissioning
institution may have to prepare to meet potential claims.
Time limits for valid challenges to award decisions are extremely
tight. Keating Chambers have specialist procurement law barristers
at all levels of seniority to ensure that timely advice is
available in all these situations, with advocacy and dispute
resolution services on call should the case demand them.
Many procurement matters previously handled by members of
Keating Chambers have related to matters from a wider scope than
just construction and engineering projects. These projects have
included the procurement of goods and services such as computers,
food, photocopiers, books, stationery, energy, cleaning, travel and
maintenance.
KEATING CHAMBERS AT THE FOREFRONT OF THE DEVELOPMENT OF
PROCUREMENT LAW
OBTAINING ADVICE AND OTHER ASSISTANCE
The case of Harmon CFEM Facades (UK) Ltd
v The Corporation Officer of the House of Commons (ConLR Volume
67) is one of the most important decisions ever made by an
English Court on the impact of European procurement law on the
construction industry of this country. It concerned a very
high-profile project, Portcullis House, the 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.
His Honour Judge Humphrey Lloyd QC 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 nebulous to be valid criteria for declining to award on the
basis of price.
Harmon were, in the end, 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
in modern procurement law.
Richard Fernyhough QC acted on behalf of Harman
In the case of BSF Group Ltd v (1)
Secretary of State for Defence (2) Purple Foodservice Ltd
[2006] EWHC 1513 (Ch), BSF, who trade as 3663, sought an
injunction to prevent the Ministry of Defence from awarding the
contract for the supply of food to UK troops worldwide to Purple
Foodservice Ltd. 3663 were the existing contractor and had tendered
for the new contract. They argued that the Ministry of Defence had
wrongfully deprived them of the opportunity to enter into a
negotiated phase of the tender and, ultimately, that they should
have been awarded the contract. 3663’s application for an
injunction was refused. The Chancery Division Judge did not accept
that 3663 had a right to enter into a negotiated phase.
The case involved consideration by a Court for the first time of
precisely what is required if an employer seeks tenders using the
negotiated procedure. The Secretary of State for Defence was
represented by leading and junior counsel from Keating
Chambers.
Paul Darling QC and Sarah Hannaford QC acted for the Secretary of State on this
case
THE IMPACT OF PROCUREMENT LAW
Procurement law is of increasing importance to the construction
and technology industries. Throughout the 1990s, EU
procurement directives were implemented in the UK by subsidiary
legislation such as the Public Works Contracts Regulations, and
Public Supply Contracts Regulations and the Utilities Contracts
Regulations. The effect was to bring most major public works,
services and supplies contracts, in addition to utilities contracts
(including water, energy and transport), within the regulatory
regime of EU procurement law. As from 31 January 2006, based
on new EU directives, the regulatory regime in the U.K. was
consolidated and updated. On that date, the new Public Contracts
Regulations 2006 and Utilities Regulations 2006 came into force, in
relation to contract award procedures commenced on or after that
date.
Contracts let in ways which breach specific procedural rules or
the general principles of transparency and equality can be the
subject of judicial challenge. Dissatisfied unsuccessful
tenderers have the opportunity to challenge proposed contract
awards either by way of injunctions or by claiming damages. In the
light of the ECJ decision in the Alcatel case, a standstill period
of 10 days has been introduced into the UK Regulations in order to
allow an aggrieved tenderer a 10 day period, after notification of
the proposed contract award, to ask for further information about
the award decision and, if appropriate, to challenge the decision
in Court, before the contracting authority may finally award the
contract. An injunction could prevent the contract being awarded to
the successful tenderer and involve the employer in huge
expenditure and delay, especially if it is required to re-tender
from scratch. Damages claims can also be very substantial:
tenderers often claim, not only their wasted tender costs, but also
loss of profit over the course of the contract.
A number of significant practical consequences flow from these
developments. Public authorities and utilities frequently
need advice on their procurement procedures, in order to prevent
breach of the regulations and also if the legality of a contract
award is challenged by a disappointed tenderer. Similarly,
contractors will often wish to obtain advice if they believe their
position has been prejudiced by the way in which the tender was
handled.
Further InformationFor further information on how our members can assist you, please contact the Senior Clerks,
John Munton and
Nick Child, in the first instance, on +44(0)20 7544 2600. They and their teams of Clerks will be pleased to advise you on the member of Keating Chambers appropriate to your requirements.