One hot topic for public authorities is whether you need to re-advertise a contract initially tendered under the Public Contracts Regulations 2006 (regulations) and which is subsequently terminated. This can happen where the work, services or supplies provided are unsatisfactory, triggering a ground for termination. It can also occur where the provider has become insolvent.
If the remaining value of the contract is over the relevant threshold value then the contract should be re-advertised in accordance with the regulations. The Pressetext case from last year decided the substitution of a contractor is a change to one of the essential terms of the contract, meaning the contract should be treated as a new contract and re-advertised. A way round this is if substitution is provided for in the terms of the contract, such as a provision for sub-contracting.
Pressetext also attempted to define what might amount to a “material amendment” to an existing contract which would also require it to be re-advertised. This includes:
- introducing conditions which, had they been part of the initial award procedure, would have allowed for the admission of other tenderers, or would have allowed the acceptance of an alternative tender;
- extending the scope of the contract considerably to encompass services not initially covered; or
- changing the economic balance of the contract in favour of the contractor in a manner which was not provided for in the terms of the initial contract.
So you need to be careful when making changes to contract and should be particularly aware that substituting the contractor could mean the contract will need to be re-advertised.
If you are unsure of your position, taking legal advice is essential.