REUTERS | Mike Blake

Public procurement case digest (July 2013)

PLC Public Sector reports:

With desks being cleared before the Summer holidays, July was a busy month for procurement case law with UK decisions on specific disclosure, limitation periods and amending claim forms and the latest from the ECJ on development agreements.

Please feel free to submit a comment below or contact us at: if you have any views on the cases covered or think that we have missed a case that should be brought to the attention of public procurement practitioners. 

Changes to claim form were new and out of time (CorelogicLtd v Bristol City Council [2013] EWHC 2088 (TCC))

In this case, the High Court refused permission for the claimant in a public procurement dispute to amend its claim form, concluding that the amendments introduced new claims. Further, the new claims were not a result of a clerical or formal error, and did not arise out the same or substantially the same facts as those in the original claim form as they related to different stages in the procurement procedure and alleged breaches of different rules.

The importance of making sure a claim that fully covers all of the grounds of challenge is obvious.  While it could be argued that the shorter limitation period makes this more difficult, in this case it is worth noting that the court also concluded that the new claims were time barred as they were raised outside the 30 day time limit under Regulation 47D of the Public Contracts Regulations 2006.

When does suspicion become knowledge and trigger the limitation period? (Nationwide Gritting Services Ltd v The Scottish Ministers [2013] ScotCS CSOH_119)

With all the discussion of the reduction in the limitation period to bring an action following the ECJ decision in Uniplex, one question that has largely been left unanswered isat what point is a tenderer deemed to have the knowledge that a breach of the procurement regime has occurred (and the clock startrunning)?  This was the question considered in this case by the Scottish Court of Session, which rejected an application by the defendant contracting authority that an action alleging breach of the Public Contracts (Scotland) Regulations 2006 had been brought out of time. The Court concluded that, on the facts in this case, at the date three months prior to bringing its action, the company only suspected that an infringement had occurred and that its suspicion was unsupported by facts. Therefore, the grounds for bringing proceedings had not arisen by that date.  While this case was brought under the old, longer limitation period, the issues of when suspicion will become knowledge will continue to be relevant.

No order for specific disclosure … yet (Pearson Driving Assessments Limited v The Minister for the Cabinet [2013] EWHC 2082 (TCC))

Since the introduction of automatic suspension, it is fair to say that contracting authorities have generally not struggled to convince the courts that suspensions should be lifted and contracts awarded.  This case is interesting as it shows what steps a claimant can take to reinforce its arguments relating to the quality of its case and also where the balance of convenience may lie. Here the claimant made an application for specific disclosure of a number of documents before the hearing of the defendants’ Regulation 47(H) application to lift the automatic suspension of contract award.

The High Court considered that there seemed to be adequate evidence to support the claimant’s argument that there was a serious issue to be tried without such disclosure. It noted, in particular, that the defendants would not be able to rely on controversial facts to justify an argument that there was no serious issue to be tried in this case. In such circumstances, the court found that it was not necessary for there to be specific disclosure prior to the Regulation 47(H) hearing.

Another failure for the claimant then?  Not necessarily;the High Court went on to note that if, during the hearing of the Regulation 47(H) application, it became clear that justice could not be done without further disclosure, then that application would have to be adjourned and some further disclosure ordered to enable the court to reach a fair decision.

Commission challenge to land development dismissed due to reliance on wrong directive (European Commission v Netherlands (Case-576/10))

The latest in a long line of ECJ cases on the relationship between the procurement regime and development agreements is most noteworthy for the failure of the Commission to bring its case under the correct legislation.  The ECJ agreed with the Advocate General and found that the applicable directive in this case was Directive 93/37 (the old Public Works Directive), rather than Directive 2004/18 because the actionable event was the municipality of Eindhoven’s approval in 2002 of the preliminary plans for a community centre to be known as the Doornakkers Centre. At the same time, the municipality of Eindhoven decided that the EU procurement rules did not apply because it was considered a sale of land, exempt from the procurement rules. The ECJ therefore concluded that the Commission’s appeal should be dismissed because it was based on an alleged infringement of Directive 2004/18 rather than Directive 93/37, which was the applicable legislation at the time of the decision.

Counterclaim that challenger lacks standing cannot automatically trump the original challenge (Fastweb SpA v Azienda Sanitaria Locale di Alessandria (Case C-100/12))

In this case, not for the first time, the ECJ was called on to look at a complexity of Italian procurement law. On this occasion it considered an Italian law that provides that if a counterclaim is brought challenging the standing of a party alleging a fault in a procurement procedure, the counterclaim must be examined before the main action is considered. The ECJ concluded that:

  • Directive 89/665 must be interpreted as precluding an action for review from being declared inadmissible as a consequence of the examination of the preliminary plea.
  • This is only in the absence of a finding as to whether the bids submitted by both the successful tenderer and by the tenderer bringing the main action for review were compliant with the tender specifications. (In this case, the Piedmont Regional Administrative Court had found that both the successful tenderer’s bid and the unsuccessful tenderer’s bid were not compliant with the tender specifications.)

European Ombudsman (EO) update

July saw the closure of two EO inquiries:

  • On 16 July 2013, it published a decision finding that there had been no maladministration by the European Commission following allegations that a tender process had been flawed due to unavailability of one expert put forward in the winning tenderer’s bid and an alleged conflict of interest affecting another.(Complaint 1717/2010/ANA against the European Commission)
  • On 3 July 2013, it announced its decision to close its inquiry into a complaint about a decision of the Publications Office of the EU to award a contract by way of negotiated procedure rather than issuing a call for tenders. The Ombudsman concluded that the Publications Office failed to meet the standard of reasoning required in order to justify the need to award the contract in question by means of a negotiated procedure, and in so doing breached Article 126(1)(b) of the Implementing Rules. This therefore constituted an instance of maladministration.  However, as the contract had been implemented in full by the time of this finding, no further substantive recommendation or solution was proposed by the EO. (Complaint 1859/2010/VIK against the Publications Office of the European Union)

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