Often contracting authorities take comfort in the belief that challenges under the UK procurement rules must be brought “promptly” and in any event, “within three months from the date when grounds for the bringing of the proceedings first arose”. Under the current procurement rules, UK courts may use their discretion to dismiss proceedings as being out of time, on the basis that they were not brought ‘promptly,’ even if they were brought within the stated three month time limit.
Often contracting authorities also take comfort in the belief that the three month time limit starts to run from the point when the alleged breach occurs, or in any event, from the point when the Standstill Letter is sent out.
On 28 January 2010, the Court of Justice of the European Union (CJEU) handed down two judgments1 which fly in the face of these beliefs. The effect of the judgments is to fundamentally alter the perceived level of risk in relation to the time within which challenges may be brought
THE REQUIREMENT THAT PROCEEDINGS ARE BROUGHT “PROMPTLY”
The CJEU has held that ‘promptly’ is no longer a legitimate requirement for bringing procurement challenges because it “gives rise to uncertainty” and “does not ensure effective transposition” of the EU Remedies Directives.
In practice, the requirement to bring challenges ‘promptly’ often left aggreived bidders with little time to gather sufficient information and organise their claim. The judgment means that these aggreived bidders are no longer required to rush to court in order to bring a challenge ‘promptly’. They will now have at least three months to prepare their claims, allowing them to receive detailed legal advice and possibly complete a Freedom of Information request within the timescale.
WHEN DOES THE CLOCK START RUNNING?
The CJEU ruled that the period for bringing proceedings should start to run from the date on which the aggreived bidder knew, or ought to have known, of the alleged breach. This is likely to happen when the aggreived bidder has been fully informed of the reasons for the award decision and of the characteristics and relative advantages of the successful tenderer in relation to its tender. If the Standstill Letter fails to provide this information in full, the three month period may not yet start to run, leaving the contracting authority at risk for a longer period of time.
In both judgments, the CJEU made it clear that national courts can no longer reject cases on the basis that they have not been brought ‘promptly’. In addition, for the purpose of the three month limitation period, time starts to run from the date on which the aggreived bidder knew, or ought to have known, of the alleged breach.
New remedies provisions entered into force on 20 December 2009, meaning that a court now has the power to declare a contract ineffective. The combination of these new provisions along with the recent rulings on time limits means that the risk of a challenge and its consequences for contracting authorities continues to increase.
Meanwhile, those in the private sector may wish to amend their strategy in challenging procurement decisions, in order to make full use of the extra time available. They may now prepare more detailed and substantiated claims, and if necessary, make requests for further information. However, whilst the requirement of ‘promptly’ has been removed, it is still advisable to bring challenges in a timely fashion.