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JUNE 2012

Legal Focus

77

positive reasons why relatively few procurement claims are recorded. It has always been the case that most cases are resolved either before proceedings start, or at least before any significant hearing. A recent attempt

to

extrapolate the number of challenges from various sources suggested that the number of challenges is probably in the low hundreds each year, even though only a dozen or so end up in reported judgments.

“Expenditure constraints on public and utilities procurement may have reduced the number of contracts, but have probably made bidders keener to pursue the opportunities available to them. There are certainly more claims arising out of the cancellation of projects and their reduction in scope at various points in the process. The changed economic situation has also had a dramatic effect upon the economics of many long-term project leading to attempts by parties to get out of existing contractual relationships, or at least to rebalance them.

Procurement law was never a traditional part of the law of any part of the United Kingdom.

It is grafted in from the EU and remains a largely private law regime enforcing

largely administrative standards

Michael added: “General challenges to the fairness and transparency of bid processes have become increasingly sophisticated, but there are always new areas of challenge coming to light. A current area of concern arises out of the powers and obligations to exclude bidders which have been involved in corruption or previous misconduct from any future process Europe-wide. The means of avoiding this "Corporate Death Penalty" is an increasingly important area.

“Public, and utilities procurement is a growing and competitive area of practice. There are a few hundred lawyers in the UK who are most involved and many are known to each other through conferences and bodies such as the Procurement

Lawyers'

Association. This group is steadily growing and as bidders, authorities and their advisers become more

“Procedural changes are probably also increasing the number of claims. As a result of changes which came into force in 2009, if a bidder serves a claim before the proposed contract is entered into, the authority is legally prevented from entering into any valid contract until a court has decided whether that "suspension" should remain in force. That combined with the shortening of the limitation period to 30 days from the date of knowledge of the relevant facts has meant that a number of claims are brought so as to "stop the clock". The obligations on authorities to provide information regarding the bid process at this stage have meant that bidders are often able to use this period to learn what their claim should be and to secure advantages from the authority.

“Some have noted that outside Northern Ireland few if any of these suspensions have been upheld. However, in nearly all of the cases in which the suspension was lifted (so that the contract could be signed), the judge decided that the challenge was weak on the available evidence. There may be arguments whether the judge was right in any given case, but in principle if a judge thinks a case is weak that seems a pretty good reason to allow the contract to be signed. On the other hand, if the case is strong it may never reach court. The authority may just correct the mistake.”

sophisticated the number and complexity of challenges will increase. The "improvements" proposed by the EU Commission in two draft directives produced just before Christmas (comprising 180 pages without annexes) will not dampen growth of this sector.” LM

contact details: Michael Bowsher Qc

Website: www.monckton.com twitter: @BowshProcureEU.

www.lawyer-monthly.com

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