Henry Brothers (Magherafelt) Ltd & Others v Department of Education for Northern Ireland

[2011] NICA 59  

It was back in Issues 96 and 101 that we fi rst reported on this case. The CA in Northern Ireland, has now fi nally decided that the High Court was correct in setting aside a framework agreement entered into by the Department of Education for Northern Ireland following breaches of the 2006 Procurement Regulations. The Department had appealed against the original decision on the grounds that the judge erred in fi nding that (1) price was a mandatory criterion in the selection process for the most economically advantageous tender, (2) the building contractors’ claim was not statute barred and (3) he had the power to set aside the framework agreement.

The case is a reminder as to how quickly the procurement landscape is changing. Since the original decision, the 2006 rules have been superseded by the Public Contracts (Amendment) Regulations 2009 which came into eff ect on 20 December 2009. The 2009 Regulations removed the previous distinction between “framework agreements” and “contracts” which was a key factor in the third issue here. If the CA had found that a framework agreement was a contract for the purpose of the 2006 Regulations, that would have prevented it from setting aside the framework agreement. Today, the regulations make it clear that a specifi c contract will not be considered to be ineff ective merely because a declaration of ineff ectiveness has been made in respect of the framework agreement. The court must consider each specifi c contract in its own right.

Further, public contracts are now governed by the Public Procurement (Miscellaneous Amendments) Regulations 2011 which were implemented on 1 October 2011, and it is interesting to see how the new legislation has changed the way that claims must proceed. Under the 2006 Regulations (prior to their amendment), the limitation time limit was 3 months not 30 days. Here, looking at 2011 case law, the CA indicated that the cause of action only arises where a breach of the 2006 Regulations is alleged. Anticipation of a breach is not suffi cient. Further the breach can consist of any infringement of the regulations which gives rise to the risk of loss or damage. Time of course runs from the date when the economic operator fi rst knew, or ought to have known, that grounds for starting proceedings had arisen.