Recently we have had several queries from clients and users of our procurement portal around the requirement at regulation 112 to publish contract award notices on Contracts Finder even where the contract is below the threshold.
This will be an additional layer of administrative burden for contracting authorities and understandably our readers are wondering whether it is really strictly necessary. (Of course the obligation to publish contract award notices on Contracts Finder also applies where the contract is over the threshold, thanks to regulation 106, but given that this information must be published in the OJEU anyway, this is perhaps less of a burden.)
When is the obligation to post contract award information for below-threshold contracts onto Contracts Finder actually triggered? It will apply, from 1 April 2015, if the contract is below the relevant EU threshold for that contract type but above the de minimis lower threshold. This lower threshold is £10k for central government bodies and £25k for sub-central government bodies and NHS Trusts. Note that Academies and maintained schools (as defined) are exempt, as is the procurement of “health services” for the purposes of the NHS (Procurement, Patient Choice and Competition)(No.2) Regulations 2013.
There is no absolute requirement to advertise one of these contracts on Contracts Finder; regulation 110 merely states that, if you choose to advertise, then you must advertise/also advertise on Contracts Finder. However, regulation 112 requires contract award information to be posted on Contracts Finder, regardless of whether the below-threshold contract was initially advertised there or not.
It also sets out the minimum information requirements that must be included, which, in addition to information about the contractor and the contract value, must also contain a note on whether the winning bidder is an SME or a value-driven non-governmental not-for-profit organisation. Further details are available in the Crown Commercial Service’s recent guidance. Also worth a look, for more guidance on some of the technicalities of using Contracts Finder, are the CCS’s Q and As on the topic.
What happens if we don’t?!
It is not entirely clear what the consequences of a failure to publish a contract award notice for a below-threshold contract might be. Regulation 91 states that a bidder can bring an action in the High Court for a breach of the duty set out at regulations 89 or 90. When you look at regulations 89 and 90, they state that the scope of that duty is limited to the provisions of Part 2 and any other EU obligation in relation to an over-threshold contract covered by Part 2. On that basis, our view is that the “applications to court” regime at regulations 88-104 does not apply to the Part 4 requirement at regulation 112 to post contract award details to Contracts Finder for below-threshold contracts (although of course this has not yet been tested in the courts!)
We suspect that litigation over this is very unlikely because a bidder would have to show that it had somehow suffered a loss as a result of the contracting authority’s failure to publish contract award details on Contracts Finder; a scenario that is difficult to immediately envisage. Also, theoretically at least, new court fees have come into effect which have increased the fee for issuing proceedings to 5% of the damages claimed up to a ceiling of £10K so, if that legislation stands, then it would simply be uneconomic to bring this kind of claim. Note too the statement at regulation 114 that a material failure to comply with Part 4 will not of itself affect the validity of a contract once it has been entered into. However this provision of course stops short of preventing, for example, a claim by a bidder for damages.
Notwithstanding this, there could be a reputational risk of failing to comply with regulation 112; allegations of a lack of transparency and a place in the “bad books” of the Crown Commercial Service (including perhaps a mention in its quarterly “Mystery Shopper” reports). As such, least risky approach is of course to try to meet the below-threshold Contracts Finder requirements rather than to fail to do so.