The Office of Government Commerce (OGC) has published its second consultation document on its approach to implementing the new European Directive on Remedies in Public Procurement which can be accessed here. Attached to the consultation document are draft regulations that must be implemented by 20 December 2009. OGC is welcoming comments, which must be received by 24 July 2009.

The main aim of the legislation is to improve the effectiveness of the review procedures once an award of a public contract has been made. The Directive has two main ways of achieving this, as set out below.

Firstly, the Directive harmonises the mandatory standstill period that applies between the notification of the contract award decision and formal conclusion of the contract (ie, the period introduced to allow the award decision to be challenged). Previously this was based on case law and so was implemented differently in different EU countries. When contrasted with the current position in the UK, the new Directive introduces some new timescales that apply where the notification to bidders is not sent by facsimile or electronic means.

Secondly, the Directive introduces a new remedy of ineffectiveness of contracts if those contracts have been awarded directly in breach of the procurement rules. This effectively means that in certain circumstances set out in the regulations a court will be able to set aside contracts entered into between a public contracting authority and a supplier. Under the regulations, orders to shorten the length of contracts and the imposition of financial penalties are also possibilities.

In summary, this legislation further increases the risks relating to procurement challenges by widening the scope of the remedies available to aggrieved suppliers. It will, therefore, make compliance with the procurement rules even more critical.