All questions


The key procurement legislation2 applicable in England, Wales and Northern Ireland is set out in the following instruments: the Public Contracts Regulations 2015 (PCR), the Utilities Contracts Regulations 2016 (UCR), the Concession Contracts Regulations 2016 (CCR), and the Defence and Security Public Contracts Regulations 2011 (Defence Regulations), referred to collectively in this chapter as the 'procurement regulations'.3

The PCR, UCR and CCR do not apply in Scotland, which has its own procurement legislation. (The Defence Regulations apply throughout the United Kingdom.) The key procurement legislation applicable in Scotland is similar to that in the rest of the United Kingdom and comprises the Public Contracts (Scotland) Regulations 2015; the Procurement (Scotland) Regulations 2016; the Utilities Contract (Scotland) Regulations 2016; and the Concession Contracts (Scotland) Regulations 2016.

The procurement regulations were initially drafted to implement corresponding EU directives and continue to reflect this fact. However, at the end of the transition period for the United Kingdom's exit from the EU (the Brexit transition period) on 31 December 2020, the EU directives ceased to have effect in the United Kingdom (except for Northern Ireland – see below). The United Kingdom is now an independent member of the World Trade Organization Government Procurement Agreement (GPA), with its own coverage schedules. The current drafting of the procurement regulations meets the requirements of the GPA. In addition to the GPA, the EU–UK Trade and Cooperation Agreement (TCA) imposes additional procurement obligations between the United Kingdom and the EU. The TCA incorporates certain obligations of the GPA and extends the coverage beyond the GPA4 (for example, by including procurement by utilities in the private sector), as well as adding further substantive requirements relating to: use of electronic means; timing of the requirement for evidence regarding conditions for participation; non-discrimination (e.g., not requiring experience to be from within the United Kingdom); access to registration or qualification systems; ensuring genuine competition; abnormally low tenders; environmental, labour and social considerations; and ensuring there is an effective domestic review procedure for disputes.5 The TCA is given effect by the European Union (Future Relationship) Act 2020.

The PCR came into force on 26 February 2015, and the UCR and CCR came into force on 18 April 2016.6 Contracts for health services above £663,540 in value let by the National Health Service (NHS) and clinical commissioning groups can be subject to the 'light-touch' regime under the PCR (see Section V.ii). Separate procurement regulations7 specific to the health sector continue to apply (alongside the PCR) to contracts for NHS healthcare services regardless of contract value.

The Small Business, Enterprise and Employment Act 2015 (SBEE Act) gives the UK government power to make further regulations in relation to procurement.8

Domestic courts must have regard to a body of 'retained EU case law' despite the end of the Brexit transition period. Retained EU case law includes decisions of the Court of Justice of the European Union (CJEU) and the General Court that relate to retained EU law (including the procurement regulations) as it applied in the United Kingdom prior to the end of the Brexit transition period. The appellate courts can depart from EU retained case law, but it remains binding on courts below the appellate level in accordance with the usual rules of precedence. All courts may have 'regard' to relevant EU retained case law made after the end of the Brexit transition period. The position becomes more complex when considering retained EU laws that have been modified, as this looks to the 'intention of the modification' and it remains to be seen how this will function in practice.9

Below-threshold procurements no longer need comply with overriding principles of EU law (referred to as the 'Treaty principles') in England, Wales and Scotland (notwithstanding any cross-border interest in EU Member States). An exception is below-threshold procurements for goods in Northern Ireland that are of cross-border interest in EU Member States, which must be advertised and opened up to competition to the EU by virtue of Article 34 of the EU Treaty, which continues to apply to Northern Ireland (as provided for in the Northern Ireland Protocol).10

The Cabinet Office (part of Her Majesty's Treasury) has responsibility for central government procurement policy; it and the Crown Commercial Service (CCS), an executive agency of the Cabinet Office, publish guidance notes and procurement policy notes (PPNs) on a range of issues. In Northern Ireland, policy and guidance are issued by the Central Procurement Directorate, and the Welsh Minister for Finance and Government Business has issued the Wales Procurement Policy Statement. The Scottish Ministers issue guidance under the equivalent Scottish legislation.

Formal legal challenges to procurement decisions are made in the High Court. However, less formal options exist. The Cabinet Office's Public Procurement Review Service11 allows bidders to make complaints and the SBEE Act reinforces this by providing a statutory basis for its procurement investigations and enabling the investigation of procurement processes and practices of certain contracting authorities by a government minister. Bidders can also refer matters to NHS Improvement, where the contracting authority is a Clinical Commissioning Group or NHS England. NHS Improvement may use its investigation and enforcement powers under the Procurement, Patient Choice and Competition Regulations (No. 2) 2013 to prevent or remedy breaches of procurement law and can even declare arrangements for the provision of NHS healthcare services ineffective if there has been a serious breach.

Year in review

This year has been dominated by the covid-19 pandemic and continued impact of Brexit, with increased public interest in procurement due to particular media focus on government spending during the covid-19 crisis.12

At 11pm on 31 December 2020, the Brexit transition period expired. At this point the procurement regulations were 'preserved' in UK law as retained EU law by the European Union (Withdrawal) Act 2018 and the European Union (Withdrawal Agreement) Act 2020 and then amended13 to take account of the United Kingdom's withdrawal and new position outside the EU. More significant changes are expected within the next few years. On 15 December 2020, the Cabinet Office released a Green Paper titled 'Transforming public procurement', which set out the current thinking and proposals for a root-and-branch update of the procurement regulations. A consultation period ran until 10 March 2021 and at the time of writing the Cabinet Office is considering responses to this consultation with no set timetable for next steps.

The United Kingdom became an independent member of the GPA on 1 January 2021, with coverage schedules that largely mirror the EU schedules (which previously applied to the United Kingdom as an EU Member State). The GPA requires the United Kingdom to open up higher-value public procurement opportunities to other GPA parties (including EU Member States) in exchange for their public procurement markets being opened up in a similar way. The TCA, which, as set out in Section I, imposes further obligations as to procurement regulation between the United Kingdom and the EU, applied provisionally from the end of the Brexit transition period and came fully into force at 11pm on 30 April 2021 (UK time), following completion of formal ratification procedures.

This year has seen a number of public procurement challenges reaching trial and judgment on the substance of the claims. Those decisions have tended to support existing principles and have resulted in significant claims being dismissed, with findings that contracting authorities acted within the scope of their relevant powers and complied with the associated duties. For example, in the case of Stagecoach East Midlands Trains Ltd v. Secretary of State for Transport,14 the court found that the Secretary of State for Transport had acted in accordance with terms of the discretion afforded to it when disqualifying the claimants for non-compliance with the proposed contractual terms of the tendered contract. A similar conclusion was reached by the court in Bechtel Limited v. High Speed Two (HS2) Limited,15 where the court found that HS2 would have been entitled to have disqualified Bechtel as a result of qualifications included within Bechtel's bid. In the HS2 case the court also reinforced previous case law regarding the applicable tests when considering whether there has been any manifest error in evaluation and applying the tests for potentially abnormally low tenders. In OLM Systems v. Fife Council16 the Scottish court clarified the level of supervision an authority is required to apply to the evaluation process. In this case the claimant argued that the moderation should have been led by a set of rules, focusing on the manner in which the process was allowed to proceed and the risk that this could give rise to discrimination by not applying the evaluation criteria objectively or uniformly. The court disagreed, stating that this would be an unwarranted intrusion on the authority's wide margin of appreciation, confirming that evaluation and moderation is not a process to be micro-managed by the law. These cases tend to show a clear message that the courts will only interfere in the decisions taken by contracting authorities where the appropriate tests are met, and those tend to be high hurdles for claimants to meet.

There have been few reported cases in which the courts have assessed an award of damages following a finding of breach of the procurement regulations, as in practice many procurement challenges are settled well in advance of trial on the substantive claims. However, this year the Northern Irish case of F P McCann Ltd v. Department for Regional Development17 determined the correct measure of damages to be awarded to a successful challenging bidder. The case is insightful in detailing the court's approach to the assessment of damages in a case where the challenging bidder had suffered the loss of a chance of being awarded a contract. The court started by assessing what the appropriate overall recoverable losses would have been, which in this case required the court to consider expert evidence as to the loss of profit that the claimant would have earned had it operated the contract. The court then applied a discount to reflect the loss of chance and in this case, given the complexity of the contract structure and the possibility that the contract might not have progressed to 'phase 2', the court discounted the recoverable loss by 50 per cent of the overall loss of profit.

This year has also seen a number of cases on the abandonment of procurement procedures, building on Amey Highways.18 In MSI-Defence Systems Ltd v. Secretary of State for Defence19 the court reconfirmed the wide discretion that an authority has to abandon a procurement process, but underlined the importance of the EU Treaty principles (now the principles of procurement embedded directly into the procurement regulations) in establishing that the discretion has been exercised lawfully. Key to this will be acting transparently, in line with equal treatment and by providing sufficient (and genuine) reasons. Ryhurst Ltd v. Whittington Health NHS Trust20 provides an example of where the discretion to abandon was exercised lawfully and demonstrates the high hurdle that a claimant will have to meet to challenge a decision of this kind. In this case a contract was awarded to Ryhurst Ltd, which, it later transpired, was part of the same group of companies involved in the Grenfell fire, which occurred less than two weeks after the award decision identifying Ryhurst Ltd as the preferred bidder and four months before the standstill letters were issued. Significant political pressure appeared to have been applied to the authority and Ryhurst Ltd argued that this was the primary reason for the abandonment, which was then announced (a further eight months after the standstill letters were sent). The authority provided a number of reasons for this decision, which were held to be rational and a sufficient and lawful basis on which to abandon the procurement. The court provided further guidance, stating that the authority does not need to provide 'chapter and verse' on the reasons leading to the decision. The stated reason of 'insufficient stakeholder engagement and stakeholder support' did not need to explain that this was based, partly, on political pressure (which the authority agreed was a reason) in order to satisfy the transparency obligation.

Lastly, on the policy front, the Cabinet Office and CCS have released a number of PPNs over the past year, addressing a number of issues: how public and utilities procurement is to function after the end of the Brexit transition period;21 taking advantage of new flexibilities as a result of the United Kingdom's exit from the EU;22 best practice in the procurement of outsourcing contracts and construction projects;23 the continued effect of covid-19;24 evaluating a bidder's approach to payment;25 and taking into account social value in the award of public contracts.26 Social value in particular marks an important change from previous tendering, as 10 per cent of all marks in any central government tender are now allocated purely for social value, including 'environmental, social and governance' (often referred to as 'ESG') and equality. This shows the government's commitment to using its purchasing power to drive societal change, which is a theme common to the aims expressed by the Cabinet Office in the Green Paper.

Scope of procurement regulation

i Regulated authorities

The PCR regulate most public sector entities. Many are specifically listed in the PCR (e.g., government departments); others are regulated on the basis that they are 'bodies governed by public law'.27

Contracts awarded by private firms are regulated by the PCR in limited circumstances for certain projects. Contracting authorities are required to ensure that, where they subsidise certain works and services contracts by more than 50 per cent, the subsidised contract is competitively tendered under the PCR.28 More generally in relation to grant-funded projects, a condition of the funding may in practice require grant recipients to let contracts for the project by competitive tender.

The UCR apply to utility activities carried out by the public sector entities regulated by the PCR, other bodies subject to their control (public undertakings) and utilities pursuing the relevant activity on the basis of special or exclusive rights granted by a competent authority.29 The UCR do not apply to exploration for and exploitation of oil and gas, or to the generation and supply (but not transmission) of electricity and gas, on the basis that these are competitive markets.

The CCR apply to the award of works and services concessions by the entities regulated by the PCR and the entities covered by the UCR (when pursuing a utility activity).

The Defence Regulations apply to all entities covered by the PCR and the UCR, and the equivalent Scottish regulations.

ii Regulated contracts

Generally, contracts for the construction of works, supply of goods and provision of services valued at or above specified EU financial thresholds are subject to the procurement regulations.30

The financial thresholds applying from 31 December 2020 are:

PCRUCR Defence RegulationsCCR
Goods£122,976 or 189,330†£378,660Not applicable
Services*£122,976 or 189,330†£378,660£4,733,252
* For light-touch services, the threshold is £663,540 under the PCR, £884,720 under the UCR and £4,733,252 under the CCR (there is no light-touch regime for the Defence Regulations).† Broadly, the lower threshold applies to central government and the higher threshold to all other authorities.

In England, Scotland, Wales and, except in respect of goods, in Northern Ireland the EU Treaty principles do not apply to below-threshold procurement, even if there is cross-border interest in the EU. Below-threshold contracts are also generally not subject to the procurement regulations. The PCR, however, contain limited additional provisions for below-threshold contracts that are designed to assist small to medium-sized enterprises (SMEs).31 PPN 11/20 provides guidance for contracting authorities on how to include in an open competition a reservation of the below-threshold contract to suppliers based on location or to suppliers that are SMEs or Voluntary, Community and Social Enterprises. In Northern Ireland, some form of advertisement and a fair, competitive tender procedure is required where the procurement involves the provision of goods into Northern Ireland and the EU Treaty principles apply if there is cross-border interest in the EU.32

The UCR apply only in relation to regulated utility activities,33 except in the case of concession contracts, when the CCR will apply. Procurements in relation to a utility's other activities are unregulated unless the utility is also a contracting authority for the purposes of the PCR, in which case its non-utility activities will be subject to the PCR.34

The Defence Regulations apply to the procurement of defence and sensitive security equipment, works and services. Works and services concession contracts in these fields are covered by the CCR. The most sensitive defence contracts may still be awarded outside the scope of the procurement regulations.

One area that can cause particular difficulties is land redevelopment. Land redevelopment often requires cooperation between a local authority and a private developer, and these arrangements are negotiated directly between a major local landowner and the authority without a competitive process. In practice, a number of local authorities have taken such arrangements outside the procurement regulations by avoiding imposing any legally binding obligation upon the developer to build.35 A UK Court of Appeal decision36 has found that contingent legally enforceable obligations to perform works will constitute a public works contract that ought to be advertised and procured under the procurement regulations.

Special contractual forms

i Framework agreements and central purchasing

Framework agreements are extensively used. Many are multi-supplier frameworks, typically involving a mini-competition among all framework panellists at the call-off stage. The CCS frameworks for central government are an example of this. Single-supplier frameworks are also common.

Framework agreements are often established by one authority on behalf of itself and a (frequently very large) number of other authorities.

Dynamic purchasing systems are not widely used at present.

Utilities have used both framework agreements and qualification systems widely to reduce the burden of procurement processes, often establishing single-supplier framework agreements for one or two control periods (i.e., five or 10 years). Under the UCR, frameworks are limited to eight years, unless a longer period can be justified.

ii Joint ventures

Public–public JVs are common. They have typically relied on the Teckal37 or the Hamburg Waste38 exceptions for in-house and cooperation agreements in the public sector that meet certain conditions, which are not subject to competitive tender under the procurement regulations. These exceptions are codified in the PCR, UCR and CCR.39

JVs have sometimes been used in public–private partnerships (PPPs), but typically the appointment of the JV partner is advertised and tendered.

The UCR have separate rules on JVs and intra-group supplies. In practice, however, they have not been as widely used as the public sector rules embodied in the Teckal and Hamburg Waste exceptions.

The bidding process

i Notice

Above-threshold40 contracts must be advertised on the Find a Tender service (FTS). UK authorities can continue to use the Official Journal of the EU in addition to FTS. The PCR also require contracting authorities to publish details of these contracts on the government portal (Contracts Finder). Similarly, the PCR require that, where an authority advertises contracts that meet lower minimum thresholds (£10,000 or more in the case of central government authorities, and £25,000 or more for sub-central contracting authorities or NHS trusts), it must also publish information about the opportunity on Contracts Finder, regardless of any other means it uses to advertise the opportunity. This requirement does not apply to contracting authorities carrying out devolved functions in Scotland, Wales and Northern Ireland. In Scotland, contracts that meet a minimum threshold of £50,000 (for supplies and services contracts) or £2 million (for works contracts) must be advertised on the Public Contracts Scotland website.41

Voluntary ex ante transparency (VEAT) notices can be used where authorities directly award a contract without a competitive process, to seek to overcome the risk of the contract being declared ineffective because it was not properly advertised. However, a VEAT notice is unlikely to offer protection against this unless the authority, acting diligently, had a legitimate belief that the procurement regulations did not apply and has been sufficiently transparent in the VEAT notice about the proposed transaction.42

ii Procedures

For above-threshold contracts, the procurement regulations generally require use of one of the prescribed procedures. Under the PCR, these are the open, restricted, competitive with negotiation, competitive dialogue and innovation partnership procedures. The PCR also provide for the negotiated procedure without prior publication of a notice (that is, a direct award) in certain exceptional circumstances. The procedures available under the UCR are the open, restricted, negotiated, competitive dialogue and innovation partnership procedures.

The PCR and UCR include light-touch regimes43 for the award of contracts for health, social, education and other specific services.44 Subject to compliance with certain mandatory requirements (e.g., principles of transparency and equal treatment), contracting entities have significant flexibility in determining the procedures to be applied.

The PCR apply a number of procedural requirements to below-threshold contracts. In addition to the advertising requirements (described in Section V.i), these are a prohibition on including a separate pre-qualification stage in the tender process and a requirement to publish information on Contracts Finder in respect of contracts that have been awarded.

Under the CCR, contracting entities are free to decide on the procedure to be followed, subject to certain specified safeguards; even lighter requirements apply in respect of light-touch services.

The Defence Regulations offer unrestricted use of the restricted and the negotiated (with prior notice) procedures. The competitive dialogue procedure is available for particularly complex contracts and the negotiated procedure (without prior advertisement) in extremely limited circumstances.

iii Amending bids

In a number of cases, the courts have upheld an authority's refusal to allow bidders to correct defects in, or omissions from, their bid.45

The PCR and UCR contain express provisions dealing with the situation where tenders or other information or documentation submitted by bidders appears to be incomplete or erroneous.46 Although those provisions appear to allow authorities to request information or documentation to clarify or complete information or documents at tender stage (as well as pre-qualification stage), it is clear that the authority must observe the principles of equal treatment and transparency in exercising this right. Therefore any decision to allow the submission of such information must be taken with care and with regard to those principles.


i Qualification to bid

The procurement regulations set out the grounds that authorities can use to assess bidders' fitness to contract.

There are also Cabinet Office and CCS publications on the qualification stage, which require that authorities use a standard Selection Questionnaire and have regard to associated CCS guidance on the selection stage that develops general principles, including self-certification, 'self-cleaning' and proportionality.47 The Cabinet Office and CCS have released a patchwork of PPNs that require central government departments, their executive agencies and non-departmental public bodies to test specific experience or past performance for certain contracts (most recently these relate to social value48 and payment of suppliers,49 reflecting current government policy priorities). Other authorities often have regard to these PPNs but are not required to implement them.

ii Conflicts of interest

The PCR, UCR and CCR require authorities to take appropriate effective measures to prevent, identify and remedy conflicts of interest.50 Economic operators may be excluded from participation in a procurement procedure where a conflict of interest cannot be effectively remedied by other less intrusive means.51 The provision is very wide, extending to 'financial, economic and other personal interest' that is either actual or even 'perceived' to compromise impartiality. In Counted4,52 the court noted that 'other personal interest' need not be financial but could amount to anything pertaining to the relevant individual. This has become an area of increased scrutiny by challenging both bidders and contracting authorities, as the circumstances where a conflict may arise, or an allegation of conflict could be made, are wide ranging. PPN 01/19 reminds authorities of their obligations in applying mandatory and discretionary exclusion grounds and managing conflicts of interest in public procurement.53

iii Foreign suppliers

The procurement regulations do not prevent foreign suppliers from tendering for public contracts, but utilities may (or in some cases must) reject certain bids to supply goods from third (non-EU) countries with which the EU did not have a reciprocal agreement before 31 December 2020.54

The PCR, UCR and CCR confer a right to challenge a breach of the regulations upon a person from the United Kingdom or Gibraltar.55 This right is extended to economic operators from other states meeting certain criteria. Broadly speaking this includes economic operators from: (1) a GPA signatory56 that at 31 December 2020 had agreed with the EU that the GPA applied to the type of procurement in question; (2) a country that was, at 31 December 2020, an EU Member State (and at that date the EU had agreed with any GPA signatory that the type of procurement would be covered by the GPA); and (3) any other state with which the EU was bound, on 31 December 2020, by an international agreement (other than the GPA) to afford no less favourable remedies than those given to EU economic operators for the type of procurement in question.57

The Defence Regulations only confer rights to challenge breaches of the regulations on persons who are nationals of, and established in, the United Kingdom or Gibraltar.58


i Evaluating tenders

Most contracts are awarded using award criteria implementing a blend of quality and price.59 Approaches to setting award criteria vary. Many authorities use a very detailed marking scheme with each small element of the project receiving a predefined mark (e.g., 0.3 per cent for proposals on staffing levels); others take a much broader approach, with no subcriteria and global figures for each criterion of, say, 15 or 20 per cent. Competitions that are purely price-based are also seen (i.e., where tenders only need satisfy a defined threshold or set of requirements for quality and otherwise price is used as the sole award criterion).

Under the PCR, UCR and CCR, authorities must disclose the evaluation criteria from the date of publication of the contract notice. This allows bidders to understand what is important to the authority and to decide whether to participate accordingly.60 Where the Defence Regulations apply, authorities must disclose the marking criteria, at the latest, when issuing the contract documents (e.g., in the invitation to tender).

The courts tend to uphold disclosure of the main criteria and subcriteria only, on the basis that disclosure of the finer detail would not in fact affect the content of bids.61 Nevertheless, in practice many authorities disclose full details of the marking scheme, regardless of whether this is strictly required by law.

ii National interest and public policy considerations

Under the procurement regulations, national interest can be taken into account only to a limited extent. Authorities may not favour local business. For example, while specifications may refer to British Standards, they must expressly permit equivalent standards from other GPA jurisdictions. As set out in Section I, there are also provisions in the TCA that restrict discriminatory practices.

The government has adopted a policy on how authorities should deal with businesses that have adopted certain aggressive tax avoidance measures.62

Another key government policy is securing access to public contracts for SMEs. This policy is in part implemented through the PCR63 and reinforced by CCS guidance.64 The government has acknowledged the importance of prompt payment for SMEs by requiring authorities to pay invoices to their suppliers within 30 days and to ensure that prompt payment is enforced through the supply chain. Authorities are required to publish data demonstrating compliance with these requirements at the end of each financial year.65 This is further supported by PPN 07/20, which requires certain authorities to consider suppliers' payment practices when procuring large contracts (over £5 million per annum).

The PPN on supply chain visibility66 directs central government departments, their executive agencies and non-departmental public bodies tendering contracts under the PCR with a value above £5 million per annum to require the successful prime suppliers to:

  1. advertise on Contracts Finder any subcontract opportunities with a value over £25,000 that arise after contract award (although authorities may consider setting a higher threshold where the £25,000 threshold is overly burdensome to suppliers); and
  2. report on how much they spend on subcontracting and how much they spend directly with SMEs in the delivery of the contract.

Further policies include: obtaining commitments from suppliers to provide training and apprenticeships;67 guidance, a digital tool and training package to help tackle modern slavery in government supply chains;68 and responses to the impacts of covid-19.69

Information flow

During the procurement process, authorities must ensure they give bidders sufficient information to enable them properly to understand the authority's requirements and to ensure a level playing field. This is particularly important where an incumbent service provider will be in a privileged position when a new procurement is run because it has additional information. The PCR and UCR require authorities to take appropriate measures to ensure that competition is not distorted by the participation of bidders that have had prior involvement in the procurement procedure (e.g., in the preparation stage).70 Where the distortion of competition cannot be effectively remedied by other less intrusive means, bidders may be excluded from the procedure.71

Authorities may withhold information from bidders on a number of grounds such as the public interest, the legitimate commercial interest of any person or possible prejudice to fair competition between economic operators.72 Additionally, authorities must not disclose information reasonably stipulated by the bidder as confidential,73 and under the Defence Regulations an authority may impose measures to protect classified information.74

Under the procurement regulations, authorities are required to notify bidders and supply certain information when they make an award decision. They must then 'stand still' for a minimum of 10 calendar days before signing the contract.75 This period allows unsuccessful bidders time to bring a legal challenge to prevent the contract award if they consider that the award decision is unlawful, provided that the bidders are otherwise within the limitation period for procurement claims. The standstill requirement often proves to be onerous for authorities, which must supply scores and a narrative of the characteristics and relative advantages of the winning bid to each unsuccessful bidder.

Many authorities consider that best practice is to give fulsome details of their reasons in the standstill notice, so as to be seen to be transparent, to flush out any complaints as soon as possible, to seek to ensure that the time for bringing a challenge in the courts is running on any complaints (see Section IX.i) and to reduce the risk of delay where a bidder asks for more information and claims that the standstill notice is defective. Authorities should also be mindful of the need to provide standstill information to all bidders, even those who have previously been disqualified, unless the disqualification has been upheld by a court or the full extended limitation period for any challenge stemming from that disqualification has passed.

Challenging awards

The EU rules on challenging procurement decisions, some of which are optional, were implemented in the procurement regulations and remain largely in this form, although they are the subject of proposed reform (as set out in the Cabinet Office's Green Paper). The main options that have been adopted are that courts are not to make declarations of ineffectiveness where overriding reasons relating to the general interest require the contract to be maintained and that, in certain circumstances, courts may shorten the contract instead of declaring it ineffective.76

The courts may agree to expedite procurement cases at the parties' request, which means that a typical first instance judgment may be handed down within a number of months of commencement of proceedings. Nonetheless, because of the cost, delay and inherent litigation risk in proceedings, many cases are settled without a full trial. Expedition can be key to the success of any procurement challenge by an unsuccessful bidder; it significantly increases both the likelihood of maintaining the automatic suspension (as such a suspension would only be in place for a short time pending a full expedited trial)77 and the ability to adhere to a timetable, which means obtaining judgment on a mid-tender challenge before any contract is awarded.78

Procurement challenges often necessarily require the establishment of confidentiality rings to protect bidders' commercially sensitive and confidential information. The authority will need to have recorded and be able to evidence its evaluation process or face possible legal challenge and criticism by the court if it fails to do so.79 Disclosure of key information may be anticompetitive, prevent a fair and equal re-tender or negatively affect the commercial interests of a bidder. The recent approach has been for contracting authorities to adopt a neutral position on disclosure, as Merseytravel did in Bombardier v. Merseytravel,80 so that the real focus of any dispute as to confidentiality is between the successful and challenging bidders who are often competitors in the same market. However, the court in that case ruled that costs will be payable by a successful bidder (even if it is a non-party) if it does not permit the authority and challenging bidder to agree sensible and reasonable disclosure directions.

The Technology and Construction Court in England and Wales published guidance in the summer of 2017 on confidentiality rings in procurement proceedings, disclosure and pre-action conduct in an annex to the Technology and Construction Court Guide.81 The protocol also seeks to encourage the use of alternative dispute resolution to resolve cases. While the protocol is not binding, failure to follow the protocol may lead to a party being penalised in costs and is often cited by the courts in procurement challenge cases.

The losing litigant is generally required to pay 60 to 70 per cent of the other party's legal costs, in addition to all its own legal costs, and in procurement cases this can extend to meeting the majority of the legal costs of the successful bidder if the presiding judge feels the successful bidder has, as an interested party, assisted the court.82 Further guidance as to when a successful bidder may be entitled to such costs was provided in the recent costs decision in Bechtel Limited v. High Speed Two (HS2) Limited83 in which the court made clear that a successful bidder must ordinarily be able to show that there is a separate issue on which the bidder was entitled to be heard and an order of the court clearly stating the extent to which an interested party is entitled to participate in the proceedings.

The trend continues towards increased challenges. Pre-action correspondence challenging a decision is frequently written and can be successful. In England, it is still rare for a bidder to be successful in a court challenge. However, there have been more bidder-friendly decisions in recent years, particularly on upholding the automatic suspension, as in Lancashire Care,84 Bristol Missing Link85 and Counted4,86 but that is still the exception rather than the norm and normally only achievable where a challenger is the incumbent provider. Northern Ireland is perceived by some to be more bidder-friendly, although the most recent decision, in Lagan Construction Ltd v. Northern Ireland Water,87 resulted in the automatic suspension being lifted on the basis that damages would be an adequate remedy for the claimant, but not for the authority. However, as with the courts in England, in reality much turns on the specific facts and merits of the cases that have actually proceeded to a hearing or trial (and the appetite of the specific bidders and authorities to fight or to settle challenges). The case of Lowry Brothers88 shows that the authority can succeed in Northern Ireland.

i Procedures

Procurements can provide their own complaints mechanisms, but High Court litigation is the main method of challenging awards.

Each High Court jurisdiction (England and Wales, Northern Ireland and Scotland) is separate and has its own case law, save that the Supreme Court is the highest appellate court for all UK jurisdictions. Each court will have regard to relevant case law from the other jurisdictions.

The reason that challenges tend to be brought in the High Court stems largely from the very short time limit set for commencing these proceedings. At 30 calendar days (from when the claimant knew or ought to have known of grounds for bringing a claim), the limitation period for procurement claims is the shortest in English law. It can be extended (up to three months) where the court determines there is good reason. The trend in England has been to uphold the limitation period strictly;89 however, the case of Amey Highways90 provides an example of a case in which the court was prepared to extend time, albeit just for a few days.91 In Northern Ireland the courts are more flexible.92

There is an increasing trend for parties to a potential procurement claim to reach an agreement to extend both the standstill period and any applicable limitation period. It was previously considered extremely risky to enter into any agreement that would 'standstill' the 30-day limitation period, given the operation of the regulations and strict application of time limits, even though such standstill agreements are routinely used across the jurisdiction for other claims. However, there has been a softening on this position in recent years, since the Amey Highways93 case noted above, in which the court allowed a short extension of time on the basis of an agreement between the parties. Such agreements are now being used to provide more time for parties to exchange information and consider their positions before proceedings become unavoidable.

Claims under the procurement regulations can be brought in the High Court by economic operators, including contractors, suppliers and service providers.

ii Grounds for challenge

Claims may be brought for breach of a duty owed to the bidder under the procurement regulations if the bidder either suffers or risks suffering loss. Examples include:

  1. undisclosed evaluation criteria and weightings, in breach of the obligations in the procurement regulations, or the duty of transparency under the Treaty on the Functioning of the European Union, or both;94
  2. manifest error in evaluation;95 the error must be obvious and expert evidence is not permitted to prove it;96
  3. failure to exclude abnormally low tenders;97
  4. unlawful abandonment of procurement;98 and
  5. post-award substantial changes to contracts, in reliance on the codification of pressetext Nachrichtenagentur99 in the procurement regulations.
iii Remedies

The procurement regulations provide three main remedies: suspension, ineffectiveness and damages.

The 'automatic' suspension, which is unique to procurement challenges, arises when a claim form is issued before the contract is entered into and does not require a court hearing. Once in place, the authority cannot enter into the contract until the court ends the suspension or the parties end it by agreement or a consent order.100 The suspension also applies to the decision in fact challenged by the issue of proceedings. If an authority rewinds a procurement process and makes a new decision, the automatic suspension will not apply to that new decision unless that decision is also challenged.101

In England, in cases where authorities have applied to lift the automatic suspension, they have usually been successful (although much turns on the merits of those cases in which applications are actually made). Traditionally, it has been extremely difficult to maintain the suspension in contracts in the health and social care sector, where patient wellbeing and safety are paramount, but in Lancashire Care,102 Bristol Missing Link103 and Counted4104 the courts were persuaded to do so. The most recent cases show that it is still more often than not that the suspension is lifted, particularly where significant procurements with large-scale impact or national importance are concerned, such as in Alstom Transport UK Ltd v. Network Rail Infrastructure Ltd,105 Bombardier v. Hitachi Rail106 and DHL Supply Chain.107 In Circle Nottingham v. NHS,108 the court lifted the suspension where the claimant faced potential damage and loss of the sort discussed in Bristol Missing Link109 and Counted4110 and where doing so would likely result in 'paying twice' for the same service by virtue of a damages claim. This judgment thereby refines the rule laid down by Coulson J in Covanta Energy,111 which stated this 'could not be in the public interest': where there is a breach of procurement legislation that is sufficiently serious to justify an award of damages then paying twice was, where the cost was not unduly high, 'a price worth paying in order to achieve proper compliance' and this was in the contemplation of the legislatures when drafting the PCR. It appears now that while the prospect of paying twice remains a factor militating against lifting a suspension, the value of that payment is to be considered and weighed in the judicial scales.

In Northern Ireland, suspensions have generally been maintained.112

Under the procurement regulations, the court may also set aside the decision or amend a document.

A declaration of ineffectiveness may be made when one of the grounds for ineffectiveness is satisfied. For the PCR,113 these are:

  1. awarding a contract illegally without advertisement in FTS where this is required;
  2. awarding a contract in breach of the standstill period or automatic suspension with another breach of the procurement regulations; and
  3. awarding a specific contract under a framework agreement when the requirements relating to the reopening of competition are not followed or when tendering procedures are not followed in a dynamic purchasing system.

Ineffectiveness means that a contract is prospectively, but not retrospectively, ineffective from the date of the declaration. The court can deal with matters consequent on the contract being declared ineffective. It must also impose penalties and may award damages. Some contracting authorities and utilities make contractual provision for the parties' rights and responsibilities in the event of a declaration of ineffectiveness (as expressly permitted by the procurement regulations114 and encouraged by government guidance).115

The first-ever successful claim in the United Kingdom for a declaration of ineffectiveness was in Scotland in the Lightways Contractors case.116 The court found that a call-off contract under a framework had been awarded to an economic operator not on the original framework. In the absence of any other valid procurement process, the award was unlawful and the contract declared ineffective. Faraday117 is the first case in England and Wales in which the court has made a declaration of ineffectiveness. This followed upon its decision that where a developer of land has an option to and does draw down land and, in doing so, comes under an obligation to develop that land, that contingent obligation to carry out works is sufficient to amount to a public works contract caught by the PCR (and, therefore, should have been advertised and competed in accordance with those regulations). The courts have, however, made clear that, where a competition is held, it will be difficult for economic operators to later allege that the contract concluded was so different from that advertised that the remedy of ineffectiveness should be granted. The courts have confirmed, in AEW Europe v. Basingstoke and Dean Borough Council,118 that the relevant test is to determine whether there was an effective contract notice capable of being related to the procedure and the contract awarded; using this 'mechanistic' test, regard should be had to the fact that the contract notice 'sparked the competition' that led to the contract being awarded. Where a competition of some kind has been held, this is therefore a relatively low hurdle for an authority or utility to reach to avoid a declaration of ineffectiveness on grounds of a failure to advertise a competition.

Unless grounds for ineffectiveness exist, damages are the only remedy that can be awarded under the procurement regulations after the contract has been entered into. Claims for damages are usually for wasted bid costs or loss of profit or opportunities. The EnergySolutions119 case requires that an authority's breach of the procurement regulations be sufficiently serious before damages can be awarded. It remains to be seen whether this will have a material impact upon the ability of claimants to recover damages and the development of the Alstom120 case (above) will be one to watch.


The future shape of UK procurement law will depend primarily on the international agreements it chooses to make with the EU and other countries. The TCA is an example of this. As a signatory to the GPA, but outside the EU, the United Kingdom has more freedom to set its own procurement policy than it did as an EU Member State, although many of the basic principles remain the same. The Green Paper on Transforming Public Procurement released on 15 December 2020 sets out a number of reforms that are being explored, although much of this does not involve fundamental change. More widespread reform is expected in the medium term in NHS procurement (which is being dealt with separately from the Green Paper and is subject to a number of sector-specific consultations) and the development of wider health reform in the proposed NHS bill.

The Green Paper proposals largely relate to procedural (reducing the choice of procedures to three and consolidating the procurement regulations into one instrument) and policy issues (mandatory and discretionary exclusion grounds and simplification of the regulations together with reliance on guidance), while the foundations of the procurement regulations will remain substantially the same. Potentially the largest change we may see is in relation to how disputes are handled, with tribunals, timescales and remedies all being explored, including a cap on any damages a bidder can seek from an authority.