Cabinet Office reduces time limit for bringing procurement proceedings

As of 1 October 2011 changes have been implemented to the time limit within which procurement challenges may be brought, following confirmation by the Cabinet Office of the results of its consultation on implementing the Uniplex¹  judgment (the "Consultation").

The position under the Public Contracts Regulations 2006 (the "Regulations") had previously been that proceedings to bring a challenge against a decision of a contracting authority for breach of the Regulations should be brought "promptly and in any event within three months from the date when grounds for bringing the proceedings first arose" ². The Uniplex judgment held that, amongst other things, the requirement to being proceedings "promptly" was imprecise and inconsistent with EU law.

Following the Consultation, the time limit to bring a procurement challenge under the public procurement rules is now 30 days from the date of knowledge, being the date on which the "economic operator first knew or ought to have known that grounds for starting the proceedings had arisen" ³. The court then has discretion to extend this period up to a maximum of three months, where it "considers that there is a good reason to do so"⁴ . A decision was made not to define "date of knowledge" as it was felt that this needed to be flexible in the event further case law on the application of the Uniplex principles needs to be taken into account in the future.

The changes are implemented by the Public Procurement (Miscellaneous Amendments) Regulations 2011⁵ (the "2011 Regulations"), which came into force on 1 October 2011. The new time limit does not apply to proceedings where the date of knowledge is prior to 1 October 2011.
The Cabinet Office feels that the amendments will:

• Give the claimant sufficient time to assess the position and for alternatives to litigation to be explored;
• Prevent an aggrieved bidder from deliberately delaying starting proceedings;
• Avoid an anomaly with ineffectiveness time limits;
• Bring certainty and simplification to the process; and
• Comply with EU principles such as non-discrimination and effectiveness.

In light of the time limits for bringing a challenge being reduced, it is now more imperative than ever for bidders to act quickly if it is suspected that a contracting authority has awarded a contract in circumstances contrary to the procurement rules.

Further Amendments

As set out above, the main change introduced by the 2011 Regulations is to the time limits within which a procurement challenge must be brought. The 2011 Regulations also amend the criteria where a contract will be automatically suspended when a procurement challenge has been brought. A contracting authority must now refrain from entering into a contract where:

• A claim form has been issued in respect of the decision to award the contract;
• The contracting authority is aware the claim form has been issued and the reason behind it; and
• The contract has not yet been entered into.

Further amendments include a requirement that the claimant need only issue proceedings within the time limit, whereas previously they had to both issue and serve proceedings on the contracting authority within this time. However, the claimant must now serve the claim form within seven days of its issue on the contracting authority. The 2011 Regulations also remove the necessity for the contracting authority to send an "Alcatel" letter to a tenderer who has been "definitively excluded" from consideration at an earlier stage, but only in circumstances where the whole period within which they may bring a challenge has expired (i.e. three months). Additionally, the 2011 Regulations also update the grounds upon which a tenderer may be rejected have been updated to provide for changes in the law, such as the introduction of new offences under the Bribery Act 2010.

¹ Case C-406/08 Uniplex (UK) Ltd v NHS Business Services Authority
² Regulation 47(7), The Public Contracts Regulations 2006
³ Regulation 3, The Public Procurement (Miscellaneous Amendments) Regulations 2011
⁴ Regulation 5(4)(a), The Public Procurement (Miscellaneous Amendments) Regulations 2011
⁵ SI 2011/2053