Beth Price explains why it can be helpful to look behind the decision to award a contract

Whether or not to dispute the outcome of a public procurement award can be a difficult decision for charities. Failing to win a contract, and sometimes losing an existing contract, can represent a big loss of income. This disappointment is compounded when it appears that something has gone wrong in award of the contract.

However, there is often a worry that a procurement challenge may be a case of ‘throwing good money after bad’. Trustees have the difficult decision of whether to pursue a challenge or to save their resources. Challenging a procurement decision can also be a minefield of very short deadlines and complex rules, so there is little time to take action.

Learning lessons

Even if a challenge is not pursued all the way to formal court proceedings, charities may be able to use a challenge to gain important information about the procurement process and how the bid was received. This can lead to better tender preparation and greater chances of securing contracts in the future.

In one such situation we recently advised a large charitable provider of services to children and young people following the loss of a significant contract. The award of the contract appeared at odds with the scoring which had been carried out during the process; despite being scored the highest on most categories, the contract was still awarded to another provider. The charity had attempted to gain further information on the tender and the scoring from the council in question, which the council was refusing to provide.

On behalf of the charity, we were able to obtain this information before the deadline for challenging the award of the contract. With this feedback and our advice, the charity was able to make an informed decision on its preferred next steps. Whilst on the information provided the charity decided not to proceed any further with a formal challenge of the award, it did gain valuable insight into the tender put forward and how it could improve that tender in the future. In particular, the council’s feedback provided a practical insight into its priorities when reviewing tenders and the critical elements it was looking for.

Procurement processes, by their nature, involve a considerable amount of time and resources for the participants. Charities can feel at a disadvantage in this respect especially if competing against larger, commercial organisations. Challenging an unsuccessful tender can help a charity with future procurement exercises, allowing them to gain and employ invaluable knowledge and insight from previous tenders.

Key Issues

If you are concerned by a procurement decision, the key issues to keep in mind are:

  • There are very short deadlines for challenging the award of a contract. Some of these deadlines can expire even before the decision of the public body is announced.
  • Keep comprehensive and accurate records of the tender process so that you have all of the information to hand should you need it quickly.
  • Obtain advice promptly if you consider something is not right. You will not be immediately committed to legal proceedings.
  • Court proceedings are not the only outcome of a challenge; you could obtain invaluable information which will assist you in future tenders or a negotiated agreement in respect of the award.