The recent case of Letting International Ltd v London Borough of Newham illustrates how vulnerable public sector can be to challenges to contract award decisions if they fail to stick to the onerous and complex public procurement rules.
No one wants to be seen as a bad loser. Its just not cricket to show dissent when the umpire has made his decision. In the business world companies who depend on the public sector for much of their business, are reluctant to get a reputation for causing trouble. Challenges to noncompliance with public procurement rules in the UK are relatively rare. It is open to question whether this is due to the public sector’s careful regard to the rules and skilful management of the procurement process or bidders understandable reluctance to rock the boat, once a decision is made.
The public procurement process is of course intended to be totally transparent and fair for all bidders. In complex projects however, the award decision must in part at least be effected by subjective considerations. Moreover, when submitting an initial bid, how many bidders (or public sector customers for that matter) really know exactly the basis on which they will be scored.
The recent case of Letting International Limited v London Borough of Newham shows how vulnerable the public sector can be to challenge once an award decision is made. Any failure to comply with the procurement rules, which in themselves are complex and based on an interpretation of broadly worded European directives, can result in a successful challenge. Arguably, to reduce the risk of any challenge, the awarding authority would have to rely heavily on advice from specialist lawyers who are up to date on the latest European case law, as regards the correct interpretation of the rules. A brief review of the relevant case law, quickly shows that even the learned judges are feeling their way and having some difficulty in working out exactly how the procurement legislation should be interpreted and executed in practice.