The European Court of Justice (the Court) has ruled that a public contract awarded without prior publication of a contract notice in the Official Journal of the European Union (OJEU) cannot be declared ineffective, so long as the 'safe harbour' conditions have been met.
The ineffectiveness 'safe harbour' (Regulation 47K(3) of the Public Contracts Regulations 2006 (as amended) (PCR) refers) precludes the remedy of ineffectiveness where a contracting authority awards a public contract without prior publication of a contract notice in the OJEU, provided the contracting authority has:
- considered the contract award, without prior publication of a Contract Notice, permissible in accordance with the PCR;
- published a VEAT Notice in the OJEU expressing its intention to conclude the contract; and
- allowed at least 10 calendar days (from the day after publication of the VEAT notice) to expire before awarding the contract.
The previous Advocate General Opinion suggested a stricter reading of the 'safe harbour' provisions, which would have included consideration of the intentions and degree of ‘good faith’ of a contracting authority in directly awarding a contract without meeting the advertising and transparency requirements. The Court has effectively rejected that Opinion, in holding that it would be contrary to the wording and purpose of the 'safe harbour' provisions to allow the national courts to declare that a contract is ineffective where the three conditions set out above have been met.
In a warning to contracting authorities seeking to rely on the 'safe harbour', the Court stressed that the VEAT Notice “must disclose clearly and unequivocally the reasons that moved the contracting authority to consider it legitimate to award the contract without prior publication of a contract notice, so that interested persons are able to decide with full knowledge of the relevant facts whether they consider it appropriate to bring an action before the review body and so that the review body is able to undertake an effective review.”