Public Sector Procurement and the Remedies Directives

11 December 2003

Hazel Grant

The European Commission consults on challenges to public sector contract award decisions

Under current UK law a public contract once entered into cannot be set aside by the UK courts on the grounds of procurement law breach. This has tended to limit bidders' effective remedies for breaches of procurement law. The Commission is consulting on possible changes in this area. This is of significance to both customers and bidders in public procurement.

Public sector procurement accounts for around 16% of the EU’s GDP. Such a significant sector needs to operate fairly and in accordance with the law. Public procurement law aims to increase competition and transparency so that businesses get more opportunities, public bodies get value for money and ultimately tax payers get better services.

EU law in this area includes the Remedies Directives, which require Member States to have effective and rapid remedies for businesses who believe that public bodies have not complied with their procurement law obligations. The Commission is concerned that businesses may have difficulties using national review procedures to challenge decisions made by public authorities when awarding contracts.

The Commission has therefore launched an internet consultation on the legal and practical problems which have been encountered by businesses and their advisers. The Commission hopes that the consultation will inform the planned revision of the Remedies Directives which is scheduled to take place in the second half of 2004.

The Internal Market Commissioner, Frits Bolkestein, said “I would urge all businesses, associations and lawyers with an interest in public procurement to respond to this consultation … we can only know where things are going wrong and, where necessary, take measures to put them right, if those on the front line tell us about their experiences.”

The questions in the consultation cover a number of issues including:

  • querying the procedure where a public authority may sign a contract and then make public its decision, thereby preventing a disappointed bidder from stopping the award. To avoid this the consultation asks
  • whether there should be a period of time (up to 30 days) between the notification of a decision to award to a particular business and the signing of a contract; whether a national authority (i.e. an independent body similar to OFWAT (e.g. “OFPROC”)) should have the power to bring matters before the court;
  • asking whether the obligation to inform the public body of the complaint, prior to taking formal steps, is helpful in resolving issues; and
  • asking whether any damages have ever been sought or obtained.

The consultation closes on 15 December 2003 and the results will be published in March 2004 on the Commission’s “Your Voice in Europe” internet site.

You can find the consultation (and the results) at The Commission estimates it will take 15 minutes to fill out the questionnaire.

For more information on the consultation or on public procurement law, please contact Hazel Grant on +44 (0) 20 7415 6000.