Understanding procurement regulations is not an easy task. With new cases being released in the UK courts that have a direct effect on how to interpret the UK law, more and more procurement professionals struggle to find reliable, regulated procurement guidance. Read the top 5 most frequently asked questions from our customers on the following themes: direct awards, remedy of ineffectiveness, open procedure, standstill period, and notification at selection stage.
Direct Awards
What do the regulations state in respect to direct call-offs under a multi-supplier framework?
Where a framework agreement is concluded with more than one economic operator, that framework agreement shall be performed in one of the following ways:
a) Following the terms and conditions of the framework agreement, without reopening competition, where it sets out:
- I. All the terms governing the provision of the works, services and supplies concerned, and
- II. The objective conditions for determining which of the economic operators that are party to the framework agreement shall perform them, which conditions shall be indicated in the procurement documents for the framework agreement
This implies that if the top scoring supplier (under the criteria for award of a call-off) were not able to supply, then you would cascade down to the next highest scoring, and so on. Leaving it open to whichever supplier you like would be risky, as this implies that you would not be in alignment with the equal treatment principle – which would require objective criteria for determining the chosen supplier for the award of the call-off under the framework.
It is often suggested that security of supply is a justifiable objective which would then allow for rotating the awards between suppliers. However, this is difficult to formulate as award criteria, and is not found in the current guidance on frameworks from the Crown Commercial Service. Furthermore, there is no decided case law that we are aware of to clarify this issue. If the value of the individual call-off is below the applicable EU threshold, then the risks are much reduced, as it is arguable that such a call-off contract is not within the scope of the regulations – rather that it is the award of framework itself that is caught by the regulations.
The safest approach would be to have defined award criteria and apply them, adopting a cascade approach where the top scoring supplier cannot supply.
Remedy of Ineffectiveness
Can a civil financial penalty be applied at the following stages of a challenge (suspension and set-aside of decision or action), or would civil financial penalties only apply following a successful damages or ineffectiveness claim?
We would advise that a civil penalty would not apply if the Procurement was suspended, however a civil penalty i.e., what we call a dissuasive fine may apply if the Court ordered the remedy of ‘Ineffectiveness’ or a set-aside of an illegal decision made by the Authority.
‘Ineffectiveness’ is only available in 3 scenarios:
- Illegal direct award
- Illegal call-off of under a multi supplier framework
- Breach of standstill when accompanied by another significant breach
This would result in the contract being cancelled or significantly shortened, together with a significant fine (designed to be dissuasive). This also means the Contracting Authority is likely to be taken to court for ‘breach of contract’ by the supplier who has their contract cancelled – so more costs to follow, as well as reputational damage.
Open Procedure
Are there any rules prohibiting the staggering of Award criteria within the Open Procedure approach?
The Open Procedure is a one stage procedure where suppliers respond to your advert with their bid, and those that pass the initial suitability section (the mandatory and discretionary pass/fail questions and the minimum capability and capacity pass/fail questions), should have the remainder of their bid assessed in line with the award criteria published in the procurement documents. The winner is the bidder that comes top against these criteria.
There is no opportunity to down select bidders or to hold a staged process in an Open procedure. Effectively you would be using this to down select bidders and to provide an additional stage in the evaluation procedure.
As an authority you can only apply minimum selection criteria, on a pass/fail basis and then exclude from further evaluation the bids of any suppliers that do not meet those criteria, but you are not able to score and evaluate. This would suggest to us that you are able to ensure in those minimum criteria questions that they have experience or ability, but it will be on a pass/fail basis only, there won’t be an opportunity to score.
This is a risk judgement that you would have to make, and we would suggest you seek legal advice.
Standstill Period
On a regulated tender I have issued an unsuccessful letter to a tenderer, and we are still in standstill. The unsuccessful tenderer has issued a request through a lawyer for an extension on the standstill period from 10 to 30 days in order to allow the parties time to correspond regarding the issues raised. If it isn’t a formal challenge, it’s just a request, do we have to grant this request?
We would advise as this is as this is not a formal legal challenge i.e., a ‘claim form’ there is no express obligation to acknowledge receipt of any informal request and extend the time period.
The only express duty is to refrain from entering into the contract on receipt of a claim form (or knowledge that one has been issued from the court).
Reg 95(1) states:
Where –
- a claim form has been issued in respect of a contracting authority’s decision to award the contract,
- the contracting authority has become aware that the claim form has been issued and that it relates to that decision, and
- the contract has not been entered into; the contracting authority is required to refrain from entering into the contract.
There is no mandatory obligation to suspend standstill or extend the timescales in the event of an enquiry (the PCR 2015 do not recognise ‘soft challenges’)
Notification at selection stage
Where in the PCRs (or a PPN) does it state the Standstill should not end on a weekend or bank holiday?
There is a general provision (Reg 2(4)) relating to time periods within the regulations which states (emphasis added):
In Parts 2, 3 and 4 (except regulation 52(4)), any reference to a period of time, however expressed, is to be interpreted subject to the requirement that where the period –
- is to be calculated by counting forwards in time from a given date or event, and
- would (but for this paragraph) have ended on a day which is not a working day, the period is to end at the end of the next working day.
However, it would be prudent to ensure all enquiries are dealt with to prevent any escalation to a formal challenge at a later stage. This maybe after the standstill period but still within the 30-day period permissible for suppliers to challenge.
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