Unfairly Denied A Public Contract? The Clock Is Ticking

If you fail to win a public contract following a flawed tendering exercise, you may be able to challenge the result. However, as a High Court case showed, such proceedings are subject to extremely tight time limits and those who delay seeking legal advice are at risk of stumbling at the first hurdle.

The case concerned a local authority’s award of a ten-year road services contract. A company had its bid rejected after it scored a mark of 85.48, just 0.03 lower than the successful tenderer. The company believed it should have won and launched a challenge to the outcome under the Public Contracts Regulations 2015.

The company argued that the council’s instructions as to how it should structure its bid in respect of certain staff costs were flawed and that manifest errors had been made in scoring the rival bids. The council, however, applied to strike out the proceedings on the basis that they had been issued outside the 30-day time limit prescribed by the Regulations.

In ruling on the matter, the Court noted that legal authority and the need for efficient administration of public contracts dictate a strict approach to the time limit, which starts to run when a disappointed tenderer first acquires, or ought to acquire, knowledge that it has grounds for challenging a result.

In dismissing the council’s application, however, the Court extended the time limit in respect of the manifest errors issue on the basis that a ‘standstill’ agreement had been in place between the company and the council for ten days before proceedings were issued. The agreement effectively stopped the clock during that period and it would have been unconscionable had the council attempted to go behind it.

The position in respect of the instructions issue was different, in that the time limit had expired before the standstill agreement came into force. No explanation, good or otherwise, had been given as to why proceedings in respect of that issue were not commenced in time. However, the Court found that the delay, which only extended to a few days, had resulted in no practical consequences and had caused no prejudice to the council. The company was granted extensions of time in respect of both issues, thus enabling it to pursue the entirety of its case to trial.

If you have been denied a successful tender application because of flawed procurement procedures, do not delay getting in touch. Contact our Commercial team on 020 7822 4000, or email us at enquiries@healys.old-website.shout-loud.co.uk