Procurement Disputes - Thinking about challenging a public procurement process?


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The disappointment can be acute, particularly when much effort and cost has gone into the procurement process. Often, the disappointment quickly turns to thoughts of challenging the decision. So what are your options if this occurs? What do you need to bear in mind? Act quickly! The first thing to be aware of is that time is usually against you. If a ‘standstill period’ is in operation, there is a very short window (typically 14 calendar days) within which you must act. During this period, you are protected against the authority concluding a contract with the successful tenderer. However, once the period expires, that protection is lost (unless you issue legal proceedings which have the effect of automatically suspending the award process). Stopping contract execution is usually a priority, because once a contract is signed your chances of obtaining any meaningful remedy are significantly reduced. Therefore, always act quickly during the standstill period. If there is merit to a complaint, we often advise clients to send a comprehensive letter to the authority setting out all of the issues. This can take time to pull together properly and will often require legal input. Do not underestimate the work that needs to go into such a letter or the tactical issues that will need to be considered at this stage. This is an important opportunity to make your case fully. It is not unusual for an authority to change its mind if a good legal argument can be made. Authorities do occasionally concede that mistakes have been made; they do sometimes reverse decisions or abandon competitions (which may give all bidders a fresh shot at the opportunity). Seek an extension to standstill period If it is not possible to resolve matters to your satisfaction with the authority before the end of the standstill period, it can be a good idea to seek an extension. For example, an undertaking can be sought from the authority that it will not enter into the contract for another 7-10 days. This buys time for both sides to deal with the complaints made and consider their options. The authority may be minded to extend, particularly if it considers there to be a risk that legal proceedings will be issued against it. Beware the 30-day limitation period In public procurement, there are strict time limits within which you must lodge your complaint in Court. Once this time limit expires, the authority may object to your complaint on the grounds that it is out of time. The threat of litigation will be of concern to awarding authorities, and it can be used as leverage when seeking a particular outcome; however once the threat passes upon the expiry of the limitation period, there is less likelihood of a complainant succeeding. The time limit for initiating Court proceedings is usually 30 calendar days after you knew or ought to have known of the existence of an alleged infringement. So, for example, if your complaint relates to the legality of the award criteria, you have to lodge any legal proceedings in Court within 30 days of the date this came to your attention (or ought to have come to your attention) - you cannot afford to wait until the competition ends some months later. If a complaint is based on debriefing information in the standstill letter, you must generally lodge your complaint with 30 days of receipt of the letter; in this case, you also need to make sure that no contract is signed once the standstill period expires (see above point). Finally, be wary of authorities extending the standstill period beyond the 30-day period. A complainant can be lulled into a false sense of security by an authority undertaking not to execute the contract for a certain period; however, such undertakings do not stop the 30-day clock – when that period expires, so too does the prospect of litigation. Obtain the debriefing you are entitled to Procurement decisions should be properly explained by the contracting authority. Bidders are entitled to know the reasons why they been not been successful at PQQ and tender stages. If the reasons given do not adequately explain what was wrong with your submission, this can be cause for complaint. Look out for any indication that the authority has not adhered to its published evaluation methodology. Sometimes new criteria are revealed in the debriefing letter (which were not previously apparent from the procurement documents). Our team can assist you to ensure that you receive the correct information and to assess whether a serious error has been made by the authority during the assessment process. Procedural rules If you do have to issue legal proceedings, remember that there are important procedural rules to be followed, including the obligation to first notify the authority in writing that you intend to make a Court application. This ‘letter before action’ should be comprehensive and include all grounds of complaint. Once proceedings are issued, the legal documents must be served on the authority as soon as reasonably practicable. Automatic suspensions It will usually be the case that the issue of legal proceedings in Court causes an automatic suspension of the award process. Note that a mere letter of complaint does not stop time running or lead to a suspension. If a case is to be lodged in Court, there can be a lot of work involved. The time and cost of this needs to be factored in. The benefit of automatic suspension, from a complainant’s perspective, is that it forces the authority to do something about the complaint (which it may have sought to dismiss previously). There may be a number of options open to the authority at this stage – for example, it could apply to the Court to have the suspension lifted; it could live with the suspension and chose to fight the case; it could review the contested decision and make a fresh decision; or it could abandon the procurement entirely. Potential solutions Procurement challenges can result in a variety of outcomes any one of which may be acceptable to a complainant depending on the circumstances. Usually, disappointed bidders would like a procurement decision to be reviewed or the competition abandoned entirely; sometimes challengers (e.g. incumbents) can gain by merely delaying the award of a contract. The prospect of obtaining financial damages is usually less appealing and not of primary concern. If you do go down the legal route, it is important to appreciate that there are likely to be some ‘twists and turns’ before matters resolve. Be aware that as a challenger you can abandon your claim at any time, although there may be cost implications of doing so. Feel free to make contact with us for an initial consultation – free of charge Having advised dozens of disappointed bidders and acted in many of the leading cases that have come before the Courts in Ireland and Northern Ireland in recent years, our lawyers are ideally placed to advise any company which is aggrieved by the outcome of a procurement process. The materials on the Eversheds Sutherland website are for general information purposes only and do not constitute legal advice. While reasonable care is taken to ensure accuracy, the materials may not reflect the most current legal developments. Eversheds Sutherland disclaims liability for actions taken based on the materials. Always consult a qualified lawyer for specific legal matters. To view the full disclaimer, see our Terms and Conditions or Disclaimer section in the footer. 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Many businesses receive the unwelcome news that their PQQ application or their tender has not been successful. The disappointment can be acute, particularly when much effort and cost has gone into the procurement process. Often, the disappointment quickly turns to thoughts of challenging the decision.

So what are your options if this occurs? What do you need to bear in mind?

Act quickly!

The first thing to be aware of is that time is usually against you. If a ‘standstill period’ is in operation, there is a very short window (typically 14 calendar days) within which you must act. During this period, you are protected against the authority concluding a contract with the successful tenderer. However, once the period expires, that protection is lost (unless you issue legal proceedings which have the effect of automatically suspending the award process). Stopping contract execution is usually a priority, because once a contract is signed your chances of obtaining any meaningful remedy are significantly reduced. Therefore, always act quickly during the standstill period.

If there is merit to a complaint, we often advise clients to send a comprehensive letter to the authority setting out all of the issues. This can take time to pull together properly and will often require legal input. Do not underestimate the work that needs to go into such a letter or the tactical issues that will need to be considered at this stage. This is an important opportunity to make your case fully.

It is not unusual for an authority to change its mind if a good legal argument can be made.

Authorities do occasionally concede that mistakes have been made; they do sometimes reverse decisions or abandon competitions (which may give all bidders a fresh shot at the opportunity).

Seek an extension to standstill period

If it is not possible to resolve matters to your satisfaction with the authority before the end of the standstill period, it can be a good idea to seek an extension. For example, an undertaking can be sought from the authority that it will not enter into the contract for another 7-10 days. This buys time for both sides to deal with the complaints made and consider their options. The authority may be minded to extend, particularly if it considers there to be a risk that legal proceedings will be issued against it.

Beware the 30-day limitation period

In public procurement, there are strict time limits within which you must lodge your complaint in Court. Once this time limit expires, the authority may object to your complaint on the grounds that it is out of time. The threat of litigation will be of concern to awarding authorities, and it can be used as leverage when seeking a particular outcome; however once the threat passes upon the expiry of the limitation period, there is less likelihood of a complainant succeeding.

The time limit for initiating Court proceedings is usually 30 calendar days after you knew or ought to have known of the existence of an alleged infringement. So, for example, if your complaint relates to the legality of the award criteria, you have to lodge any legal proceedings in Court within 30 days of the date this came to your attention (or ought to have come to your attention) - you cannot afford to wait until the competition ends some months later. If a complaint is based on debriefing information in the standstill letter, you must generally lodge your complaint with 30 days of receipt of the letter; in this case, you also need to make sure that no contract is signed once the standstill period expires (see above point).

Finally, be wary of authorities extending the standstill period beyond the 30-day period. A complainant can be lulled into a false sense of security by an authority undertaking not to execute the contract for a certain period; however, such undertakings do not stop the 30-day clock – when that period expires, so too does the prospect of litigation.

Obtain the debriefing you are entitled to

Procurement decisions should be properly explained by the contracting authority. Bidders are entitled to know the reasons why they been not been successful at PQQ and tender stages.

If the reasons given do not adequately explain what was wrong with your submission, this can be cause for complaint. Look out for any indication that the authority has not adhered to its published evaluation methodology. Sometimes new criteria are revealed in the debriefing letter (which were not previously apparent from the procurement documents). Our team can assist you to ensure that you receive the correct information and to assess whether a serious error has been made by the authority during the assessment process.

Procedural rules

If you do have to issue legal proceedings, remember that there are important procedural rules to be followed, including the obligation to first notify the authority in writing that you intend to make a Court application. This ‘letter before action’ should be comprehensive and include all grounds of complaint. Once proceedings are issued, the legal documents must be served on the authority as soon as reasonably practicable.

Automatic suspensions

It will usually be the case that the issue of legal proceedings in Court causes an automatic suspension of the award process. Note that a mere letter of complaint does not stop time running or lead to a suspension. If a case is to be lodged in Court, there can be a lot of work involved. The time and cost of this needs to be factored in.

The benefit of automatic suspension, from a complainant’s perspective, is that it forces the authority to do something about the complaint (which it may have sought to dismiss previously). There may be a number of options open to the authority at this stage – for example, it could apply to the Court to have the suspension lifted; it could live with the suspension and chose to fight the case; it could review the contested decision and make a fresh decision; or it could abandon the procurement entirely.

Potential solutions

Procurement challenges can result in a variety of outcomes any one of which may be acceptable to a complainant depending on the circumstances. Usually, disappointed bidders would like a procurement decision to be reviewed or the competition abandoned entirely; sometimes challengers (e.g. incumbents) can gain by merely delaying the award of a contract. The prospect of obtaining financial damages is usually less appealing and not of primary concern. If you do go down the legal route, it is important to appreciate that there are likely to be some ‘twists and turns’ before matters resolve. Be aware that as a challenger you can abandon your claim at any time, although there may be cost implications of doing so.

Feel free to make contact with us for an initial consultation – free of charge

Having advised dozens of disappointed bidders and acted in many of the leading cases that have come before the Courts in Ireland and Northern Ireland in recent years, our lawyers are ideally placed to advise any company which is aggrieved by the outcome of a procurement process.

The materials on the Eversheds Sutherland website are for general information purposes only and do not constitute legal advice. While reasonable care is taken to ensure accuracy, the materials may not reflect the most current legal developments. Eversheds Sutherland disclaims liability for actions taken based on the materials. Always consult a qualified lawyer for specific legal matters. To view the full disclaimer, see our Terms and Conditions or Disclaimer section in the footer.