Are you intending to discuss challenges for below threshold procurements (ie, those covered by Part 4 of the PCR 2015)?

This session focuses on challenges to regulated procurements (ie, where the value is over the relevant threshold). The remedies/challenges regime set out at Part 3 of the PCR 2015 applies to procurements that are covered by Part 2 of the PCR 2015 (see Regulation 85 ). On that basis, the remedies regime we are discussing does not apply to below threshold procurements. If a challenge was brought alleging breach of a Part 4 requirement, then you would have to look at how the procurement had been run and whether the PCR 2015 had been adopted voluntarily. If this was the case, then in principle the same issues apply for above and below threshold procurements. However, it would heavily depend on the facts of each case.

Can an economic operator who is not participating in a procurement still challenge that procurement?

Yes. The duties owed by the contracting authority when running a PCR 2015 regulated procurement are owed to all economic operators in general, not only to those who take part in the process. See Regulation 18(1) .

Is the 30-day limitation period calculated as calendar days?

It is, but day 30 must be a working day (see Regulation 2(4) ). If it is not, the limitation period ends on the next working day.

In relation to the 30-day time limit in a direct award under CCS framework without inviting tenders, would the 30 days begin on the day the said call off contract is published on contracts finder as opposed to when it was actually entered into?

As Helen mentioned, the calculation of the 30-day period is something of a moving feast each time – as it begins on the date that the bidder had or ought to have had knowledge of the alleged breach. In your example, the court is likely to say that a diligent bidder “ought to have had” knowledge from the date the relevant information was published on Contracts Finder. Each case will turn on its own facts.

Given bidders have 30 days to challenge, what is the point of the 10-day standstill? Would it not make more sense for the standstill to be 30 days?

If the standstill period has ended with no claim being brought to “automatically suspend” the proposed contract award, the contracting authority may go ahead and award that contract. Bidders will still have some time left in which to challenge (ie, up to 30 days) but, once the contract is signed, this will be limited to a damages claim. The point of the standstill period is to give bidders a chance to actually prevent award and preserve the possibility of being awarded the contract (bidders will usually prefer to be awarded the contract or restart the procurement process than to take a chance in bringing a damages claim). If the standstill were 30 days, then there would likely be arguments that this was too long a period of standstill that would potentially disrupt service provision and leave the procurement in limbo for too long to be commercially workable.

Outside the legal need for standstill, how can you explain to non-legal or procurement staff the benefits of holding a standstill period?

The legal need is persuasive of itself, since a failure to hold it is a serious breach of the PCR 2015 and could give rise to an ineffectiveness claim. But, aside from that, the standstill period can flush out a potential challenge as it does allow bidders to raise any concerns about how the procurement has been conducted without having recourse to the court.

What is the current cost of bringing a challenge?

The fee to issue the claim in the High Court will be at least £10,000. Beyond that, likely costs vary a great deal. A claimant will incur legal costs and then of course potential payment of the other side’s costs if it loses the case. These costs can vary a good deal depending on the complexity of the case. An authority who loses will be looking at making a payment in damages to the claimant for lost profit (usually a percentage of the total, adjusted depending on how likely it would have been to win the contract). The authority will also have the cost of paying twice – a damages payment to the claimant alongside the contract payment to the contractor.

Does a signed award letter (pending completion of the contract) count as having entered into a contract?

In most circumstances, no. The award letter to the winning bidder should always make it clear that the contracting authority is not at this stage committing itself to signing the contract with the winning bidder – not least as a claim could be made during the standstill period which would suspend the authority’s right to enter into the contract, potentially for an extended period of time during which much could change, legally and commercially.

Does a claim have to be issued via a solicitor letter or can the provider issue a letter?

A claim is started by issuing a claim in the specified form (a “claim form”) in the Technology and Construction (TCC) division of the High Court, which must then be “served” (ie, notified) to the defendant authority. A solicitor will usually be involved to draft this to ensure that it is compliant with the Civil Procedure Rules and the TCC Guide .

Can a procurement challenge be legally resolved if the authority offers a "debrief"?

A “debrief” could potentially take the heat out of a challenge and avoid a formal claim being brought in the courts, if the bidder is satisfied that it has understood the decision in more detail. On the other hand, debriefs can also inflame an already disgruntled bidder. However, we do not usually recommend providing debriefs, which are not required by the PCR 2015. The standstill letter, if compliantly drafted, should already contain relative advantages and characteristics of the winning bid, such that the unsuccessful bidder can understand why it did not win. If a debrief is offered, the sharing of “new” information with the bidder will “restart the clock” on the 30-day limitation period and extend out the time during which the procurement is at risk of challenge. If a formal challenge is already under way, the bidder can choose to abandon it at any point should it feel satisfied with its understanding of how the procurement was conducted. However, this would be very rare given that it is expensive to start a claim. A bidder who has commenced litigation will likely be a bidder who feels the merits of its case are strong and is not likely to be dissuaded by an offer of a meeting from the authority.

If a there is a formal challenge before contract award and we suspend the award or final contract, what scope do we have for extending the current contract and incumbent to cover the period for the case to be finalised. If there was only a month from award decision to new contract starting, you would need further contract time with your incumbent to cover the period the case is being heard.

The effect on the current service and the impact of delay would be one of the issues that the court would consider when it was weighing factors in the balance and deciding whether to lift the automatic suspension or instead whether to keep it in place pending full trial. It is likely to take a few weeks at least for the court to hold the hearing on the automatic suspension. If the contract does only have a month to run, you are correct that you would need to make provision for the interim period. You would usually look at trying to rely on one of the exemptions in Regulation 72 to extend the term/scope of the contract with the incumbent pending resolution of the decision on the new contract. You would of course be dependent on the incumbent agreeing to work with you in this way (ideally this eventuality should have been planned for in the contract with the incumbent, which should include obligations on the incumbent to use best endeavours to assist the authority with the re-procurement and any issues arising on it).

In setting up a framework agreement – say for six awarded suppliers – if four had fully signed the framework agreement but two had not done so yet (say due to terms qualifications or some other delay) and the authority at that point became aware of a claim, would the remaining two contractors still be signed or paused?

This is a tricky scenario! Regulation 95 states that a suspension will automatically come into force if (1) the authority is aware that a claim form has been issued and (2) the contract has not been entered into. It would depend on the precise terms of the framework agreement, but our initial view is that this framework agreement would not yet have been entered into and the award of the framework agreement would be automatically suspended.

What is a “manifest error”?

It is a mistake in the procurement documents or evaluation which is clear and obvious, and which could be corrected by the court easily. A common example would be where it is clear the evaluators have simply added up scores incorrectly to give an erroneous result. We discuss the concept in our previous webinar on evaluation which can be accessed here . Another good example is in the Braceurself case that Helen mentioned. In this orthodontics procurement, the requirement was for dental patients in a wheelchair to be able to access treatment without needing to mobilise out of the wheelchair. The evaluators did not understand the difference between a stair climber (which accommodates a wheelchair) and a stair lift (which does not) and marked Braceurself down as not meeting this part of the requirement. The court was able to correct this mistake and award Bracesurself the score it would have been given, had the evaluators not misunderstood.

What is a boilerplate clause?

Commercial contracts will have many clauses which you would expect to see in all contracts – these are called “boilerplate” – another name for “standard” clauses. Typically, boilerplate clauses cover notices, disputes, governing law and jurisdiction.

What type of boilerplate clauses can be included in ITT/Contract to protect a Trust from the challenge and impact of ineffectiveness raised during the tender process?

The termination provisions could include (1) a right for the authority to terminate in the event of a declaration of ineffectiveness and (2) an agreement with the contractor around service continuity, working with a new provider, liability and exit in the event of termination due to ineffectiveness. This would be a negotiated clause with the contractor and probably would not be standard/boilerplate given that it would be bespoke to each contract.

Do you have a boilerplate clause you could share for ineffectiveness remedies?

Provisions in the contract around termination on ineffectiveness are likely to be negotiated and bespoke to each contract, so there is no real standard clause as such. See our answer to the question above for the sorts of issues that might be covered.

What is the current estimated timeframe for when the new Procurement Act will be in force?

We are currently expecting that the Procurement Act 2023 will receive Royal Assent in spring 2023, with a six-month implementation period to follow. That takes us to late 2023 when it might actually come into force (and worth noting that it could come into force in stages rather than in one go).

Dealing with procurement challenges

In this recorded webinar, some of Mills & Reeve's procurement law experts focus on a selection of key questions associated with a procurement challenge and offer some practical tips for dealing with these.

Below you can watch a video recording and read some questions and answers from the webinar.

Recorded on 12 January 2023. The next session in our series of “Five in Twenty Five” webinars focuses on the topic: 'Dealing with Procurement Challenges'. In this webinar, Helen Prandy (Principal Associate), Shailee Howard (Principal Associate) and Jenny Beresford-Jones (Senior Legal Advisor) look at some of the key questions associated with a procurement challenge and offer some practical tips as to how you might go about dealing with these.

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Helen Prandy

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Our collection of webinars where our procurement experts address public procurement in the UK, focussing on topics that those working with public procurement need to consider.

Key questions and answers

A number of questions were raised during the session, which we have anonymised and answered below. Within this information, “PCR 2015” refers to the Public Contracts Regulations 2015, as amended and references to numbered regulations are to the PCR 2015.

Please note that the responses provided represent the general views of the public procurement team at Mills & Reeve, however they should not be relied on or treated as a substitute for specific advice relevant to a particular scenario/matter. If you require specific legal advice, our procurement team would be happy to discuss this further with you.

Below threshold challenges

Are you intending to discuss challenges for below threshold procurements (ie, those covered by Part 4 of the PCR 2015)?

This session focuses on challenges to regulated procurements (ie, where the value is over the relevant threshold). The remedies/challenges regime set out at Part 3 of the PCR 2015 applies to procurements that are covered by Part 2 of the PCR 2015 (see Regulation 85). On that basis, the remedies regime we are discussing does not apply to below threshold procurements. If a challenge was brought alleging breach of a Part 4 requirement, then you would have to look at how the procurement had been run and whether the PCR 2015 had been adopted voluntarily. If this was the case, then in principle the same issues apply for above and below threshold procurements. However, it would heavily depend on the facts of each case.

Who is entitled to challenge?

Limitation periods

Is the 30-day limitation period calculated as calendar days?

It is, but day 30 must be a working day (see Regulation 2(4)). If it is not, the limitation period ends on the next working day.
In relation to the 30-day time limit in a direct award under CCS framework without inviting tenders, would the 30 days begin on the day the said call off contract is published on contracts finder as opposed to when it was actually entered into?

As Helen mentioned, the calculation of the 30-day period is something of a moving feast each time – as it begins on the date that the bidder had or ought to have had knowledge of the alleged breach. In your example, the court is likely to say that a diligent bidder “ought to have had” knowledge from the date the relevant information was published on Contracts Finder. Each case will turn on its own facts.

Standstill period

Given bidders have 30 days to challenge, what is the point of the 10-day standstill? Would it not make more sense for the standstill to be 30 days?

If the standstill period has ended with no claim being brought to “automatically suspend” the proposed contract award, the contracting authority may go ahead and award that contract. Bidders will still have some time left in which to challenge (ie, up to 30 days) but, once the contract is signed, this will be limited to a damages claim. The point of the standstill period is to give bidders a chance to actually prevent award and preserve the possibility of being awarded the contract (bidders will usually prefer to be awarded the contract or restart the procurement process than to take a chance in bringing a damages claim). If the standstill were 30 days, then there would likely be arguments that this was too long a period of standstill that would potentially disrupt service provision and leave the procurement in limbo for too long to be commercially workable.
Outside the legal need for standstill, how can you explain to non-legal or procurement staff the benefits of holding a standstill period?

The legal need is persuasive of itself, since a failure to hold it is a serious breach of the PCR 2015 and could give rise to an ineffectiveness claim. But, aside from that, the standstill period can flush out a potential challenge as it does allow bidders to raise any concerns about how the procurement has been conducted without having recourse to the court.

Issuing a claim and automatic suspension

What is the current cost of bringing a challenge?

The fee to issue the claim in the High Court will be at least £10,000. Beyond that, likely costs vary a great deal. A claimant will incur legal costs and then of course potential payment of the other side’s costs if it loses the case. These costs can vary a good deal depending on the complexity of the case. An authority who loses will be looking at making a payment in damages to the claimant for lost profit (usually a percentage of the total, adjusted depending on how likely it would have been to win the contract). The authority will also have the cost of paying twice – a damages payment to the claimant alongside the contract payment to the contractor.
Does a signed award letter (pending completion of the contract) count as having entered into a contract?

In most circumstances, no. The award letter to the winning bidder should always make it clear that the contracting authority is not at this stage committing itself to signing the contract with the winning bidder – not least as a claim could be made during the standstill period which would suspend the authority’s right to enter into the contract, potentially for an extended period of time during which much could change, legally and commercially.
Does a claim have to be issued via a solicitor letter or can the provider issue a letter?

A claim is started by issuing a claim in the specified form (a “claim form”) in the Technology and Construction (TCC) division of the High Court, which must then be “served” (ie, notified) to the defendant authority. A solicitor will usually be involved to draft this to ensure that it is compliant with the Civil Procedure Rules and the TCC Guide.
Can a procurement challenge be legally resolved if the authority offers a "debrief"?

A “debrief” could potentially take the heat out of a challenge and avoid a formal claim being brought in the courts, if the bidder is satisfied that it has understood the decision in more detail. On the other hand, debriefs can also inflame an already disgruntled bidder. However, we do not usually recommend providing debriefs, which are not required by the PCR 2015. The standstill letter, if compliantly drafted, should already contain relative advantages and characteristics of the winning bid, such that the unsuccessful bidder can understand why it did not win. If a debrief is offered, the sharing of “new” information with the bidder will “restart the clock” on the 30-day limitation period and extend out the time during which the procurement is at risk of challenge. If a formal challenge is already under way, the bidder can choose to abandon it at any point should it feel satisfied with its understanding of how the procurement was conducted. However, this would be very rare given that it is expensive to start a claim. A bidder who has commenced litigation will likely be a bidder who feels the merits of its case are strong and is not likely to be dissuaded by an offer of a meeting from the authority.
If a there is a formal challenge before contract award and we suspend the award or final contract, what scope do we have for extending the current contract and incumbent to cover the period for the case to be finalised. If there was only a month from award decision to new contract starting, you would need further contract time with your incumbent to cover the period the case is being heard.

The effect on the current service and the impact of delay would be one of the issues that the court would consider when it was weighing factors in the balance and deciding whether to lift the automatic suspension or instead whether to keep it in place pending full trial. It is likely to take a few weeks at least for the court to hold the hearing on the automatic suspension. If the contract does only have a month to run, you are correct that you would need to make provision for the interim period. You would usually look at trying to rely on one of the exemptions in Regulation 72 to extend the term/scope of the contract with the incumbent pending resolution of the decision on the new contract. You would of course be dependent on the incumbent agreeing to work with you in this way (ideally this eventuality should have been planned for in the contract with the incumbent, which should include obligations on the incumbent to use best endeavours to assist the authority with the re-procurement and any issues arising on it).
In setting up a framework agreement – say for six awarded suppliers – if four had fully signed the framework agreement but two had not done so yet (say due to terms qualifications or some other delay) and the authority at that point became aware of a claim, would the remaining two contractors still be signed or paused?

This is a tricky scenario! Regulation 95 states that a suspension will automatically come into force if (1) the authority is aware that a claim form has been issued and (2) the contract has not been entered into. It would depend on the precise terms of the framework agreement, but our initial view is that this framework agreement would not yet have been entered into and the award of the framework agreement would be automatically suspended.

Manifest error

What is a “manifest error”?

It is a mistake in the procurement documents or evaluation which is clear and obvious, and which could be corrected by the court easily. A common example would be where it is clear the evaluators have simply added up scores incorrectly to give an erroneous result. We discuss the concept in our previous webinar on evaluation which can be accessed here.

Another good example is in the Braceurself case that Helen mentioned. In this orthodontics procurement, the requirement was for dental patients in a wheelchair to be able to access treatment without needing to mobilise out of the wheelchair. The evaluators did not understand the difference between a stair climber (which accommodates a wheelchair) and a stair lift (which does not) and marked Braceurself down as not meeting this part of the requirement. The court was able to correct this mistake and award Bracesurself the score it would have been given, had the evaluators not misunderstood.

Contractual protection against ineffectiveness

What is a boilerplate clause?

Commercial contracts will have many clauses which you would expect to see in all contracts – these are called “boilerplate” – another name for “standard” clauses. Typically, boilerplate clauses cover notices, disputes, governing law and jurisdiction.
What type of boilerplate clauses can be included in ITT/Contract to protect a Trust from the challenge and impact of ineffectiveness raised during the tender process?

The termination provisions could include (1) a right for the authority to terminate in the event of a declaration of ineffectiveness and (2) an agreement with the contractor around service continuity, working with a new provider, liability and exit in the event of termination due to ineffectiveness. This would be a negotiated clause with the contractor and probably would not be standard/boilerplate given that it would be bespoke to each contract.
Do you have a boilerplate clause you could share for ineffectiveness remedies?

Provisions in the contract around termination on ineffectiveness are likely to be negotiated and bespoke to each contract, so there is no real standard clause as such. See our answer to the question above for the sorts of issues that might be covered.

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