Whatever you do, don’t be late. No matter how big or serious your claim as a disappointed tenderer might be, missing the time limit for challenging an award procedure may be fatal, as the case of Sita UK Ltd v Greater Manchester Waste Disposal Authority very clearly shows.

Sita headed a syndicate that unsuccessfully tendered for what was said to be the UK’s largest PFI waste disposal project. The awarding authority, the Greater Manchester Waste Disposal Authority, awarded the contract, worth £3.8 billion, to the other tenderer on 8 April 2009 but the Sita syndicate was not happy with the process. It raised a number of compliance objections in correspondence and eventually commenced proceedings against GMWDA on 27 August 2009.

There was, however, a problem. Regulation 32(4) of the Public Services Contract Regulations 1993, amongst other things, says that proceedings may not be brought under the regulation unless they are brought promptly:

“...and in any event within three months from the date when grounds for the bringing of the proceedings first arose unless the Court considers that there is good reason for extending the period within which proceedings may be brought.”

GMWDA unsurprisingly asked the court to strike out Sita’s claim, alternatively to give summary judgment, saying that the proceedings were started too late and that the Regulation 32(4) discretion to extend the time should not be exercised.

But when did that three month period start to run? The Court of Justice of the European Union has recently ruled that the time limit should run from the date on which the claimant knew, or ought to have known, of the infringement (see note that follows). So what was the appropriate date of knowledge? And as Sita said that it only knew about facts which demonstrated breach in July 2009, did the three month clock only start to tick when Sita had sufficient detail?

The judge concluded that:

It cannot sensibly be the case that a claimant has to have great detail of how any breach came about before he has knowledge for present purposes...the grounds for bringing proceedings refers to the general basis of overall breach rather than the particular blow by blow errors which led up to the infringement.”

Sita knew of the infringements in its correspondence between April and June 2009, and, although it did acquire further knowledge of earlier infringements during the correspondence, this did not materially change the picture. The three month clock therefore started to tick on, or shortly after, 8 April 2009 and expired shortly after 7 July 2009, some weeks before the proceedings were started at the end of August 2009. But were there any reasons for extending that time?

Sita was aware of a time limit as it obtained GMWDA’s agreement to extending the three month period but it started its proceedings outside the agreed extension period and the court found that there was no reason to extend it further. Any delays were attributable to Sita itself and unavailability of senior personnel was not sufficient reason to exercise the discretion.

An appeal is currently scheduled for late 2010 or early 2011 but, whatever the outcome, make sure that your claim is in time because being late could be very bad news.