Legislative frameworkRelevant legislation
What is the relevant legislation regulating the award of public contracts?
For as long as it remains a member of the European Union (EU), the UK has an obligation to implement the EU procurement directives that regulate procurement in the public sector, certain utility sectors, the award of concession contracts and certain defence and security-related contracts as well as the availability of review procedures and remedies for breaches of procurement legislation (see the EU chapter for more details). Following the June 2016 referendum result in favour of the UK leaving the EU, and the UK Government’s notification to the European Council of its intention to do so, the UK and the EU have agreed a Withdrawal Agreement. At the time of writing this has yet to be ratified, while the remaining members of the EU have agreed to the UK’s requests to delay the UK’s exit from the EU - originally set for 29 March 2019. Under these arrangements, the UK will remain an EU member until 31 October 2019 at the latest, so as to allow time for further political discussions to take place in Britain with a view to reaching a majority consensus in the UK parliament that would enable the Withdrawal Agreement’s ratification. The UK will leave the EU before 31 October 2019 if the Withdrawal Agreement is ratified by both parties before then. If the Withdrawal Agreement is ratified, this will lead to the EU law continuing to apply to, and in, the UK as it if were still an EU member during a transitional period, which will expire on 31 December 2020 (with the possibility of that period being extended for a maximum of another two years). In the absence of such ratification and any other new agreement between the UK and the remaining EU members, the UK will leave the EU without a withdrawal agreement on 31 October, in which case EU law will cease to apply to, and in, the UK.
Unless otherwise specified, this chapter describes the law as it stands at the time of writing, with the UK still a member of the EU. As noted above, EU law will continue to apply to, and in, the UK for a transitional period following the UK’s exit from the EU if the Withdrawal Agreement is ratified before 31 October. In those circumstances, procurement legislation in the UK will continue to apply as described below until the expiry of that period.
As a result of devolution, EU procurement legislation, other than in relation to defence and security, is implemented separately in Scotland. This chapter deals with the set of procurement rules that apply to England, Wales and Northern Ireland, although in general, Scottish procurement legislation is in most material respects substantively similar to the rules that apply to the rest of the UK.
In brief, the relevant legislation is as follows:
- the Public Contracts Regulations (PCR 2015), which applies to public sector procurements;
- the Utilities Contracts Regulations (UCR 2016), which applies to procurements by certain regulated utilities;
- the Concession Contracts Regulations (CCR 2016), which applies to the procurement of works and services concession contracts; and
- the Defence and Security Public Contracts Regulations 2011 (DSPCR 2011), which applies to the procurement of certain defence and security contracts.
Unless otherwise specified, the responses to the questions below relate to the application of the PCR 2015. Separately, unless otherwise specified, references to ‘the Regulations’ should be construed as references to the four sets of regulations set out above.Sector-specific legislation
Is there any sector-specific procurement legislation supplementing the general regime?
Yes. See question 1 for further details.International legislation
In which respect does the relevant legislation supplement the EU procurement directives or the GPA?
In addition to implementing EU procurement legislation, the PCR 2015 incorporate national provisions that implement the ‘Lord Young reforms’. These particular rules apply primarily to procurements that are below the value thresholds that trigger procurement obligations under EU legislation. The primary aim of these national rules is to make public procurement more accessible to SMEs. In seeking to do so, they impose, for example, a general prohibition on selection requirements for below-threshold procurements. Separately, they require information about contract opportunities to be published at a national level (even if a contract is above the relevant value threshold and must be published first in the Official Journal of the European Union (the OJEU)).Proposed amendments
Are there proposals to change the legislation?
The UK Government has published draft legislation which will amend the procurement rules in the event that the UK leaves the EU without a deal. The draft legislation is essentially concerned with making consequential amendments to the procurement rules so that these can continue to operate effectively once the UK ceases to be an EU member. For example, this provides for a new online portal (the UK e-notification service) on which contract notices will be published and which is intended to replace the current requirement for publication of such notices in the Official Journal of the EU. Other changes include the omission of the provisions that regulate joint procurements with authorities in other EU member states as well as a number of references to member states of the EU and the European Commission. More drastically perhaps, the proposed amendments to the Defence and Security Public Contracts Regulations 2011 (which regulate the award of certain defence and security related contracts) will remove the automatic access rights which suppliers from the EU, Norway and Iceland currently enjoy in relation to the award of those contracts, as well as the protection and remedies which they currently enjoy under the law.
Applicability of procurement lawContracting authorities
Which, or what kinds of, entities have been ruled not to constitute contracting authorities?
This is an issue that has received only limited consideration in the UK courts. In the relatively recent case of Alstom Transport v Eurostar International Limited  EWHC 28 (Ch), it was held that on the basis of the specific facts of that case, Eurostar could not be classified as a type of entity that could be subject to procurement regulation.Contract value
Are contracts under a certain value excluded from the scope of procurement law? What are these threshold values?
The European Commission reviews, and if necessary revises, value thresholds every two years primarily so as to ensure that these continue to correspond to the thresholds established in the WTO’s Agreement on Government Procurement. The current thresholds have been in place since 1 January 2018, and will be revised on 1 January 2020.
The PCR 2015 applies when the value of a works contract meets or exceeds £4,551,413. The value threshold for supplies and most services contracts is significantly lower at £181,302 (or £118,133 for most procurements by central government authorities). The value threshold for services contracts for social, educational, cultural and certain other types of services stands at £615,278.
The UCR 2016 applies when the estimated value of a works contract meets or exceeds £4,551,413 or £363,424 for supplies and most services contracts. The value threshold for services contracts for social and certain other types of services stands at £820,370.
The CCR 2016 applies when the estimated value of a works or services contract meets or exceeds £4,551,413. The same value threshold triggers the application of the DSPCR 2011 for the purposes of works contracts. The value threshold for supplies and services contracts under the DSPCR 2011 is £363,424.
All of the above figures are exclusive of VAT.Amendment of concluded contracts
Does the legislation permit the amendment of a concluded contract without a new procurement procedure?
The Regulations (other than DSPCR 2011) incorporate provisions that regulate the modification of contracts following their award. These prohibit substantial modifications. In brief, a modification will be deemed substantial when it:
- renders a contract materially different in character from the one initially concluded;
- introduces conditions that, had they been part of the initial procurement procedure, would have allowed for the admission of other candidates than those initially selected or for the acceptance of an offer other than that originally accepted or would have attracted additional participants in the procurement procedure;
- changes the economic balance of the contract in favour of the contractor in a manner that was not provided for in the initial contract;
- extends the scope of the contract considerably; and
- involves the replacement of the original contractor (unless safe harbour provisions apply - see below).
At the same time, the Regulations incorporate certain provisions that specify the conditions that, if met, would not deem a modification to constitute a substantive modification and, as such, it would be permissible (generally referred to as the ‘safe harbour’ provisions).
These rules differ in certain respects, depending on whether the contract is subject to the PCR 2015 or the UCR 2016 or whether a concession contract is awarded by a contracting authority in the exercise of an activity that is not regulated under the UCR 2016. Briefly, modifications would not be deemed to be substantive where they:
- have already been provided for in the original procurement documents in clear, precise and unequivocal review clauses and provided these do not alter the overall nature of the contract;
- relate to the provision of additional requirements by the original contractor that are outside the scope of the original procurement but where a change of contractors is not possible for economic or technical reasons and would cause significant inconvenience or substantial duplication of costs for the contracting entity and the value of the modification does not exceed 50 per cent of the value of the original contract (this value rule does not apply to utility procurements);
- have become necessary as a result of circumstances that a diligent contracting authority could not foresee, the modification does not alter the overall nature of the contract and the value of the modification does not exceed 50 per cent of the value of the original contract (this value rule does not apply to utility procurements);
- are limited to the replacement of the original contractor with a new one in certain circumstances, including where this is the result of corporate restructuring, and the new contractor meets the original selection criteria and this does not entail other substantial modifications and is not aimed at circumventing the rules;
- are not ‘substantial’ within the meaning of the legislation; and
- are of a value that is below:
- the relevant value threshold for the application of the rules; and
- less than 10 per cent (for services or supplies) or 15 per cent (for works) of the value of the original contract, and provided there is no change to the overall nature of the contract. The value must be calculated cumulatively if there are successive modifications.
The second and third safe harbour provisions also require the publication of a ‘modification of contract’ notice in the OJEU.
Has there been any case law clarifying the application of the legislation in relation to amendments to concluded contracts?
Questions relating to amendments to concluded contracts are now regulated under the legislation, as explained in question 7. These provisions essentially codify and clarify further relevant case law of the Court of Justice of the EU (refer to the EU chapter for further details).
Separately, in England the courts have considered the question of substantive modifications in a number of cases including, R (on the application of Kim Alexander Gottlieb) v Winchester City Council  EWHC 231 (Admin), and R (Edenred (UK Group) Limited) v HM Treasury and others  EWHC 90 (QB);  EWCA Civ 326;  UKSC 45.Privatisation
In which circumstances do privatisations require a procurement procedure?
The Regulations do not regulate ‘pure’ privatisations, that is, the type of arrangement where the state chooses to sell off to the private sector an enterprise or other asset that was previously owned wholly or partly by the state. However, certain types of privatisation may constitute contracts that are subject to procurement regulation.
That might be the case, for example, in cases where the state grants the right to exploit state infrastructure to a private sector entity for a certain period of time in exchange for that entity operating the infrastructure under certain conditions, carrying out certain works to upgrade that infrastructure and sharing with the state the profits to be made in operating that infrastructure. Very often, this type of ‘build, operate and transfer’ arrangement would constitute concession contracts that would be subject to procurement regulation. Separately, outright sales of state infrastructure or other assets might also be subject to procurement regulation to the extent that they involve the buyer, for example, providing certain services to the state for payment or other pecuniary interest.Public-private partnership
In which circumstances does the setting up of a public-private partnership (PPP) require a procurement procedure?
The setting up of a PPP in itself would not normally raise obligations under the Regulations. However, when the setting up of a PPP involves assigning to the private sector partner or to the PPP a contract for the carrying out of works or the provision of services (or less likely, the provision of supplies) the whole arrangement is likely to be subject to procurement regulation.
That would be the case, for example, when the PPP arrangements on the one hand, and a regulated works, services or supplies requirement on the other, are ‘objectively separable’ in that they are capable of being awarded separately but the contracting authority chooses to award a single contract instead. In those circumstances, the award of a single contract would be subject to procurement regulation irrespective of the value of the regulated element or the question of whether the regulated element constitutes or not the main subject of the single contract.
Advertisement and selectionPublications
In which publications must regulated procurement contracts be advertised?
Regulated procurements must be advertised in the OJEU and also nationally via the contracts finder online portal. National publication can only take place following publication of a contract notice in the OJEU. However, if 48 hours elapse after confirmation of the receipt of the notice by the EU Publications Office and the notice has not yet been published, contracting authorities are entitled to publish at a national level.
Contracting authorities must publish a notice on contracts finder within 24 hours of the time when they become entitled to do so.Participation criteria
Are there limitations on the ability of contracting authorities to set criteria or other conditions to assess whether an interested party is qualified to participate in a tender procedure?
Yes, there are. For example, the PCR 2015 provides that contracting authorities may only impose selection criteria that relate to the suitability to pursue a professional activity, economic and financial standing, and technical and professional ability. The legislation also sets out detailed rules as to how these issues may be taken into account at the selection stage of a procurement process and the type of evidence that contracting authorities may ask applicants to provide to prove compliance with specific requirements in this regard. In addition, the legislation imposes an over-arching obligation that contracting authorities’ requirements at the selection stage should be related and proportionate to the subject matter of the contract.
Separately, the legislation allows, or in certain circumstances requires, contracting authorities to exclude economic operators where they have committed certain offences or find themselves in certain situations. The right or obligation to exclude is limited to a maximum of three years where discretionary grounds for exclusion apply and to five years where the grounds for exclusion are mandatory.
In addition, a supplier who finds itself in one of the circumstances that require or permit disqualification may avoid this if it can demonstrate to the satisfaction of the contracting authority that it has taken sufficient ‘self-cleaning’ measures (see question 14).
Is it possible to limit the number of bidders that can participate in a tender procedure?
In the context of the tender procedures that permit contracting authorities to invite only a minimum number of bidders to participate in a competition, the legislation requires that bidders are shortlisted on the basis of objective and non-discriminatory criteria or rules that must be disclosed at the start of the process.
In terms of the minimum number of bidders that may be shortlisted, the legislation requires the shortlisting of a minimum of five bidders under the ‘restricted procedure’ and a minimum of three under the ‘competitive process with negotiations’, the ‘competitive dialogue’ and the ‘innovation partnership’. However, where the number of bidders meeting the selection criteria and minimum levels of ability is below the minimum number set in the legislation, the contracting authority may continue the procedure by inviting the bidders who meet the minimum conditions for participation, provided that there is a sufficient number of qualifying bidders to ensure genuine competition.Regaining status following exclusion
How can a bidder that would have to be excluded from a tender procedure because of past irregularities regain the status of a suitable and reliable bidder? Is the concept of ‘self-cleaning’ an established and recognised way of regaining suitability and reliability?
The legislation provides that an economic operator who is in one of the situations that permit or require disqualification from the process may avoid disqualification to the extent that it is able to provide sufficient information that demonstrates that it has ‘self-cleaned’ in that, it has:
- paid or undertaken to pay compensation in respect of any damage caused by the criminal offence or misconduct;
- clarified the facts and circumstances in a comprehensive manner by actively collaborating with the investigating authorities; and
- taken concrete technical, organisational and personnel measures that are appropriate to prevent further criminal offence or misconduct.
It is for the contracting authority conducting the procedure to determine whether or not the self-cleaning measures taken are sufficient to justify not excluding the economic operator in question. In evaluating the sufficiency of the measures, the contracting authority must take into account the gravity and particular circumstances of the criminal offence or misconduct. If the contracting authority considers the measures to be insufficient, it must provide the economic operator with a statement of the reasons for that decision.
Separately, the legislation provides for a derogation from mandatory exclusion, where the mandatory exclusion grounds are met, on an exceptional basis, for overriding reasons relating to the public interest.
Finally, past irregularities may only lead to an exclusion within a period of five years from the date of the conviction or three years from the date of the relevant event, depending on the type of irregularity.
The procurement proceduresFundamental principles
Does the relevant legislation specifically state or restate the fundamental principles for tender procedures: equal treatment, transparency and competition?
The legislation imposes an obligation on regulated authorities to treat economic operators equally and without discrimination and to act in a transparent and proportionate manner. Similarly, a procurement must not be designed with the intention of excluding it from the scope of procurement legislation or of artificially narrowing competition by favouring or disadvantaging certain economic operators, for example.Independence and impartiality
Does the relevant legislation or the case law require the contracting authority to be independent and impartial?
While the legislation does not impose an explicit obligation on contracting authorities to be independent and impartial, not acting in this manner would be inconsistent with the explicit obligation to treat economic operators equally and without discrimination and to act in a transparent and proportionate manner.
Separately, general public law principles require that public bodies act fairly and rationally when making decisions.Conflicts of interest
How are conflicts of interest dealt with?
The legislation contains specific provisions that require contracting authorities to take appropriate measures to prevent, identify and remedy effectively conflicts of interest arising in the conduct of procurement procedures so as to avoid any distortion of competition and ensure the equal treatment of all economic operators.
According to the legislation, the concept of ‘conflict of interest’ must include at least any situation where relevant staff members have, directly or indirectly, a financial, economic or other personal interest that might be perceived as compromising their impartiality and independence in the context of the procurement procedure.
The legislation defines ‘relevant staff members’ as members of the contracting authority or a procurement service provider acting on behalf of the contracting authority, who are involved in the conduct of the procurement or who may influence the outcome of that procedure.
A conflict of interest that cannot be remedied effectively by other, less intrusive, measures constitutes a discretionary ground for exclusion under the PCR 2015 and CCR 2016 and may constitute such ground under the UCR 2016.Bidder involvement in preparation
How is the involvement of a bidder in the preparation of a tender procedure dealt with?
The legislation provides that a contracting authority must take ‘appropriate’ measures to ensure that the participation of a supplier (or an undertaking related to such supplier) who has been involved in the preparation of the procurement procedure will not distort competition.
Such measures must include the communication to all other suppliers participating in the competition of relevant information exchanged in the context of, or resulting from, the involvement of the supplier in the preparation of the procurement procedure and the fixing of adequate time limits for the receipt of tenders.
The supplier in question must only be excluded from the competition where there are no other means to ensure compliance with the duty to observe the principle of equal treatment. In addition, prior to any such exclusion, the supplier in question must be given the opportunity to prove that its involvement in preparing the procurement procedure is not capable of distorting competition.Procedure
What is the prevailing type of procurement procedure used by contracting authorities?
There are no official statistics available on this point. However, given that under the PCR 2015, the use of the open and restricted procedures is available to contracting authorities in all circumstances, it must be assumed that these two procedures are used more frequently than the other procurement procedures in the legislation that involve the conduct of negotiations (including dialogue) with bidders but that are only available when certain conditions are met.
As regards a preference between the competitive dialogue procedure and the competitive procedure with negotiation - both of which permit discussions with bidders and iterative bidding, it would appear that the former is more popular than the latter. The reason for this is that, subject to certain conditions, the competitive dialogue procedure permits some form of limited negotiations with the winner of the competition. On the other hand, there can be no negotiations following receipt of final tenders in a competitive procedure with negotiation.Separate bids in one procedure
Can related bidders submit separate bids in one procurement procedure?
The Regulations do not contain any provisions that address this issue explicitly nor has this been considered in the UK courts. However, in dealing with these situations contracting authorities must do so in compliance with their obligation to treat suppliers equally and without discrimination and to act in a transparent and proportionate manner.
In Case C-538/07, Assitur, the CJEU concluded that an absolute prohibition on the participation in the same tendering procedure by related bidders breaches the principle of proportionality in that it goes beyond what is necessary to achieve the objective of ensuring the application of the principles of equal treatment and transparency. Accordingly, and as recently confirmed in Case C-531/16, Specializuotas transportas, a contracting authority must allow related bidders an opportunity to demonstrate that, in their case, there is no real risk of practices capable of jeopardising transparency and distorting competition between tenderers occurring.Negotiations with bidders
Is the use of procedures involving negotiations with bidders subject to any special conditions?
Under the PCR 2015, the use of the competitive dialogue and the competitive procedure with negotiation are only available when any one of the following conditions applies:
- the needs of the contracting authority cannot be met without adaptation of readily available solutions;
- the requirement includes design or innovative solutions;
- the contract cannot be awarded without prior negotiations because of specific circumstances related to the nature, the complexity or the legal and financial makeup or because of the risks attaching to them;
- the technical specifications cannot be established with sufficient precision; or
- in response to an open or restricted procedure, only irregular or unacceptable tenders were submitted.
The use of procedures involving negotiations is not subject to any special conditions under the UCR 2016.
If the legislation provides for more than one procedure that permits negotiations with bidders, which one is used more regularly in practice and why?
See question 19.Framework agreements
What are the requirements for the conclusion of a framework agreement?
Under the Regulations, a framework agreement is an agreement between one or more contracting authorities and one or more suppliers, the purpose of which is to establish the terms governing the contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged.
Framework agreements may be awarded by following any one of the procurement procedures available under the legislation.
Under the PCR 2015, the duration of a framework agreement must be limited to a maximum of four years other than in exceptional and duly justified cases. The rules that apply to framework agreements under the UCR 2016 are more flexible and provide, for example, for a maximum duration of eight years, which again may be exceeded in exceptional and duly justified cases. There are no framework agreement provisions under the CCR 2016.
May a framework agreement with several suppliers be concluded?
Yes, contracting authorities are permitted to set up multi-supplier framework agreements. The PCR 2015 provides specific rules as to how to award ‘call-off’ contracts under such framework. In brief:
- a contract may be awarded without reopening competition where the framework sets out all the terms governing the provision of the requirements and the objective conditions for determining the framework supplier who will provide the requirement;
- where not all the terms governing the provision of the framework requirements are laid down in the framework agreement, competition must be re-opened among the parties to the framework. The legislation sets out the rules on the basis of which a call off competition must be carried out. This essentially provides for consulting framework bidders (capable of performing the contract) in writing and allowing them sufficient time to submit bids that must be assessed on the basis of the award criteria that had been disclosed in the framework procurement documents; and
- provided this possibility was set out in the framework procurement documents, a contracting authority may also reserve for itself the right to decide on the basis of objective criteria, that have been set out in the framework procurement documents, whether to award a contract without further competition (as per the first option above) or with further competition (as per the second option above).
The rules governing the award of call-off contracts under the UCR 2016 are less specific and essentially provide that contracts based on a framework agreement must be awarded on the basis of objective rules and criteria, which may include reopening the competition among the framework suppliers.Changing members of a bidding consortium
Under which conditions may the members of a bidding consortium be changed in the course of a procurement procedure?
The Regulations do not contain any express provisions on this issue. However, the view typically taken by contracting authorities is that as long as the consortium in its amended configuration still meets the original selection criteria, and the change does not lead to a distortion of competition, the consortium may be permitted to remain in the process (subject to the rules of the particular competition permitting such changes at the discretion of the contracting authority).
Separately, there is relevant CJEU case law on this issue (see question 25 of the EU chapter).Participation of small and medium-sized enterprises
Are there specific mechanisms to further the participation of small and medium-sized enterprises in the procurement procedure? Are there any rules on the division of a contract into lots? Are there rules or is there case law limiting the number of lots single bidders can be awarded?
The legislation seeks to encourage SME participation by imposing a number of obligations on contracting authorities, some of which go beyond the requirements of EU legislation. These include an obligation to:
- advertise certain procurements on the national online contracts finder portal where the value is over £10,000 for central contracting authorities and £25,000 for sub-central contracting authorities;
- the inclusion of prompt payment provisions requiring valid undisputed invoices to be paid by contracting authorities within 30 days; and
- the abolition of a pre-qualification stage for below EU threshold procurements and a requirement to have regard to guidance issued by the Cabinet Office on qualitative selection for above EU threshold procurements.
Government guidance encourages contracting authorities to divide the contract into lots. However, this is not legally mandatory. At the same time, where contracting authorities decide not to subdivide the procurement into lots, the reasons for this decision must be included in the procurement documents or documented in a report.Variant bids
What are the requirements for the admissibility of variant bids?
Contracting authorities may authorise or required bidders to submit variant bids that are linked to the subject matter of the contract, provided they indicate their intention to do so at the start of the process. Where the submission of variant bids is permitted, contracting authorities must set out the minimum requirements that variants must meet and any specific requirements for their presentation. There is also an obligation to ensure that the chosen award criteria can be applied equally to variant bids as well as to ‘conforming’ bids.
Must a contracting authority take variant bids into account?
Where the contracting authority has indicated that variants will be considered, it will be obliged to take into account variant bids that satisfy the minimum requirements set out in the contract notice and that are not excluded. If the contracting authority does not indicate that variants are permitted then such variants cannot be taken into account and evaluated.Changes to tender specifications
What are the consequences if bidders change the tender specifications or submit their own standard terms of business?
The PCR 2015 and UCR 2016 provide that where the information or documentation submitted by a bidder is incomplete or erroneous, contracting authorities may, subject to national implementing legislation requirements, request the bidder concerned to submit, supplement, clarify or complete the relevant information or documentation within an appropriate time limit, provided that such request is made in full compliance with the principles of equal treatment and transparency.
The question of what would be the most appropriate action in this kind of circumstance must be determined on a case-by-case basis. For example, where the rules of the competition prohibit bidders from changing the tender specifications or submitting their own standard terms of business, the most appropriate course of action would be disqualification from the competition.Award criteria
What are the award criteria provided for in the relevant legislation?
The PCR 2015 and UCR 2016 provide that procuring authorities must award a contract to the bidder who has submitted the most economically advantageous tender, from the point of view of the contracting authority. Which tender is the most economically advantageous must be determined by reference to price or cost, or best price-quality ratio, which must be assessed on the basis of criteria that are linked to the subject matter of the contract in question. These may include, qualitative, environmental or social aspects.
The cost element may also take the form of a fixed price or cost on the basis of which suppliers will compete on quality criteria only.Abnormally low bids
What constitutes an ‘abnormally low’ bid?
The legislation does not define an ‘abnormally low bid’. Instead, procuring authorities are effectively invited to take a view as to whether the price or cost of a bid appears to be abnormally low in relation to the works, supplies or services that constitute the requirement.
What is the required process for dealing with abnormally low bids?
Where a contracting authority considers a tender to be abnormally low, it requires the relevant bidder to explain the price or costs proposed in the tender. The PCR 2015 and UCR 2016 provide a list as to the type of explanations that may be sought in this context and that may relate, for example, to the economics of the manufacturing process, any exceptionally favourable conditions available to the bidder or the possibility of the bidder having obtained state aid.
The contracting authority must then assess the information provided by consulting the bidder. The contracting authority may only reject the tender where the evidence supplied does not provide an adequate explanation for the proposed low price or costs. If the contracting authority establishes that the tender is abnormally low because it does not comply with certain applicable obligations (for example, environmental, social and labour laws) then it must reject the tender. Where the tender is rejected because the tenderer obtained state aid then the contracting authority will need to inform the Commission.
Review proceedingsRelevant authorities
Which authorities may rule on review applications? Is it possible to appeal against review decisions and, if so, how?
Review applications are heard by the national courts of the United Kingdom, for example the High Court in England and Wales. Decisions of the first instance review body may be appealed to the relevant appellate court, for example, in England and Wales this would be the Court of Appeal. In matters of public interest or matters involving a point of law of general importance, a further appeal may be permitted to the Supreme Court of the United Kingdom.
Complaints may also be made directly to the European Commission. The European Commission is not obliged to pursue the complaint but if it does, this may ultimately lead to infraction proceedings, under article 258 TFEU, against the UK government.
If more than one authority may rule on a review application, do these authorities have the power to grant different remedies?
Not applicable.Timeframe and admissibility requirements
How long do administrative or judicial proceedings for the review of procurement decisions generally take?
The time taken for the proceedings to come to a full hearing will vary significantly depending upon the circumstances. It would not be unusual for it to take between 270-450 days for a claim to reach a full hearing. In urgent cases, the Court may order that the claim be expedited, in which case the period from issue of a claim form to judgment can be less than 90 days.
What are the admissibility requirements?
Any economic operator (essentially any entity having or having had an interest in obtaining a particular contract) from a relevant state is able to bring proceedings under the Regulations if it suffers or risks suffering loss or damage as a result of the contracting authority’s breach of the Regulations. Relevant states for these purposes include the member states of the EEA, signatories to the GPA (but only where the GPA applies to the procurement) and signatories to any other applicable bilateral agreement.
Other parties may apply for judicial review of the decision, for example, if they allege bias or serious procedural irregularity in relation to the decision-making process, but they must be able to demonstrate they have a sufficient interest in the outcome of the procurement. This can be a difficult hurdle to overcome.
What are the time limits in which applications for review of a procurement decision must be made?
This will depend on the type of remedy being sought. The Regulations require a claim seeking the remedy of ‘ineffectiveness’ to be made within a period of six months starting from the day following the date of the conclusion of the contact. Where the contracting authority has published a contract award notice in the OJEU, or has informed the relevant economic operator of the conclusion of the contract and provided a summary of the reasons leading to the award of that contract, the period for bringing a claim is shortened to 30 days from the date of publication of the contract award notice, or the date on which notice of the conclusion of the contract (together with a statement of reasons) was provided to the relevant economic operator.
Claims seeking a remedy other than ‘ineffectiveness’ must be started within 30 days beginning with the date on which the claimant first knew or ought to have known that grounds for starting the proceedings had arisen. The Court has the power to extend this period to up to three months where it considers that there is a good reason for doing so.Suspensive effect
Does an application for review have an automatic suspensive effect blocking the continuation of the procurement procedure or the conclusion of the contract?
Issuing a claim challenging the decision of a contracting authority triggers an automatic suspension that has the effect of preventing the conclusion of the relevant contract provided the contracting authority has become aware that a claim has been issued and the relevant contract has not already been entered into.
The contracting authority can apply to the Court to lift this suspension. When considering whether to lift an automatic suspension, thereby allowing the contracting authority to continue to conclude the contract, the Court will consider whether the claim raises a serious issue to be tried, whether damages would be an adequate remedy for the claimant, and whether the balance of convenience favours maintaining or lifting the suspension. In essence, the Court is considering whether it is just in all the circumstances to confine a claimant to a claim in damages. In England, the courts have recently considered the question of the adequacy of damages in the context of Lancashire Care NHS Foundation Trust and Blackpool Teaching Hospitals NHS Foundation Trust v Lancashire County Council  EWHC 200 TCC.
Approximately what percentage of applications for the lifting of an automatic suspension are successful in a typical year?
While there are no official statistics available as to the percentage of applications to lift the automatic suspension that are successful, it appears that overall a clear majority of such applications are, in fact, successful.Notification of unsuccessful bidders
Must unsuccessful bidders be notified before the contract with the successful bidder is concluded and, if so, when?
Prior to the conclusion of the contract, the contracting authority must notify each candidate and tenderer of its decision to award the contract. The notice must contain information in relation to the criteria, the reasons for the decision (including characteristics and relative advantages of the successful tenderer and the scores awarded to the recipient and the successful tenderer) and the name of the tenderer to be awarded the contract. This information must be provided at least 10 days before the contract is concluded, assuming the information is provided by electronic means. If the information is not provided by electronic means, the contracting authority must wait at least 15 days before concluding the contract.Access to procurement file
Is access to the procurement file granted to an applicant?
There are no express provisions in the Regulations on this point. Claimants may request early disclosure of relevant documents or make an application to the Court seeking an order requiring the disclosure of such documents. Courts are likely to require the early disclosure of key documents relevant to a claimant’s complaint at an early stage in proceedings, subject to issues of proportionality. The recent High Court decision in Bombardier Transportation UK Limited v Merseytravel  EWHC 726 (TCC) demonstrated the willingness of the UK courts to order the disclosure of documents that would allow an unsuccessful tenderer to investigate the contracting authority’s comparative treatment of its tender, either to confirm existing unequal treatment concerns, or to establish new freestanding allegations.
Courts are also aware of the commercial sensitivity of many documents relevant to procurement processes and will, where relevant, order that disclosure is made subject to agreed confidentiality undertakings. Also relevant in this context is the fact that in July 2017, the Technology and Construction Court published a guidance note on procedures for public procurement cases. Among other things, this encourages contracting authorities to provide their key decision-making materials at a very early stage of proceedings or during any pre-action correspondence.Disadvantaged bidders
Is it customary for disadvantaged bidders to file review applications?
No it is not. Although the practice of making claims seeking reviews of public procurement processes has become more prevalent in recent years, the number of such claims continues to be small in comparison with most other EU jurisdictions. It is often said that these low numbers do not reveal the true level of challenges to UK contract award procedures as a number of claims are settled out of court.Violations of procurement law
If a violation of procurement law is established in review proceedings, can disadvantaged bidders claim damages?
Economic operators who have suffered loss or damages as a consequence of a breach of procurement law may be awarded damages to compensate them for such loss. In order to recover damages, the relevant economic operator must establish that there has been a breach of the Regulations and that the breach has caused the economic operator to suffer loss or damage. The recent Supreme Court decision in Nuclear Decommissioning Authority v Energy Solutions EU Ltd clarifies that damages will only be available if the relevant breach of the Regulations is ‘sufficiently serious’. For these purposes, a breach will be sufficiently serious if it has an impact on the outcome of the procurement.
May a concluded contract be cancelled or terminated following a review application of an unsuccessful bidder if the procurement procedure that led to its conclusion violated procurement law?
The Regulations set out the limited circumstances in which a Court may make a declaration of ineffectiveness in relation to a concluded contract. These include where:
- the contract was awarded without the prior publication of a contract notice, in circumstances where one was required; and
- there has been a breach of the automatic suspension or standstill obligations depriving the claimant of the possibility to pursue pre-contractual remedies and this is combined with an infringement of the Regulations that has affected the chances of the claimant to obtain the contract.
Where a declaration of ineffectiveness is granted, the contract is prospectively ineffective as from the time the declaration is made. Accordingly, it will be illegal to perform any obligations that are outstanding at the time when the declaration is made. This remedy is rarely granted, with only two examples of such a declaration being granted in the UK at the time of writing, the most recent being by the English Court of Appeal in the case of Faraday Development Ltd v West Berkshire Council  EWCA Civ 2532 (a decision relating to a land development agreement between a local authority and a developer).Legal protection
Is legal protection available to parties interested in the contract in case of an award without any procurement procedure?
Awarding contracts covered by the Regulations without any procurement procedure would constitute a breach of the Regulations (unless an exemption permitting direct negotiations applies) and would entitle affected economic operators, subject to limitation periods, to seek a declaration of ineffectiveness or damages.Typical costs
What are the typical costs of making an application for the review of a procurement decision?
For a claim that includes a claim for damages, the cost of issuing a claim form will depend on the amount of damages being claimed. For any claim over £200,000 the cost of issuing a claim form will be the maximum £10,000. An additional fee of £528 will be payable if the claim includes a claim for non-monetary relief, such as a declaration of ineffectiveness or an order setting aside a decision to award a contract. Additional fees will be payable at various stages of the claim, such as if an application is made for an interim order for specific disclosure or the matter proceeds to a hearing. Total fees, including legal fees, will vary depending upon the nature and complexity of the issues in dispute. Fees ranging from tens to hundreds of thousands of pounds are not uncommon. To the extent that a claimant is successful, it may be able to recover a proportion of its fees from the contracting authority. Typically a successful claimant would hope to recover in the region of 65 per cent of its total costs from the defendant. If the claimant is unsuccessful, it would usually expect to pay a similar proportion of the defendant’s total costs.
Update and trendsRecent developments
Are there any emerging trends or hot topics in public procurement regulation in your country? In particular, has the scope of applicability of public procurement law been broadened into areas not covered before (eg, sale of land) or on the contrary been restricted?
The Faraday Court of Appeal judgment (see question 44) has clarified further the law as regards the circumstances in which land deals, which are in principle exempt from procurement legislation, may trigger obligations under the procurement rules. More specifically, in order to benefit from the land exemption, agreements for the transfer of interests of land should not provide (including as a result of the possible exercise of an option) for directly enforceable obligations to develop the land in accordance with plans approved by the relevant contracting authority. If such possibility forms part of the arrangements agreed, the arrangements would constitute a mixed contract, consisting partly of obligations for the carrying out of works or services, which are, in principle, subject to procurement regulation, and the grant of rights relating to land, which are not. In line with the legal principles that regulate mixed contracts, whether the whole arrangement would then be subject to procurement regulation would depend on whether the two elements of the transaction are objectively separable. If they are objectively separable, but the authority, nevertheless, wishes to combine the two elements, the entire transaction would, in principle, be governed by the relevant procurement regulations. If the obligations to develop the land are not objectively separable from the grant of the interest in land, whether or not procurement regulations would apply would be determined by reference to the ‘main subject matter of the contract’.
The government has published draft amending legislation that will come into effect in the event that the UK leaves the EU without a deal. These amendments are essentially concerned with ensuring that the procurement legislation continues to operate, despite the UK no longer being an EU member. In the longer term, the extent to which post-Brexit procurement legislation might be amended substantively will depend partly on the type of trade agreement that the UK and the EU ultimately reach. Relevant in this context is also the fact that the UK’s application to accede to the WTO’s plurilateral Agreement on Government Procurement (GPA) as an individual party, once the country exits the EU, has now been accepted by the other parties to that agreement. Accordingly, any future amendments to domestic procurement legislation will also need to remain consistent with GPA obligations.