On 15 November, the European Commission adopted the Commission’s proposal for a new directive to amend the existing public procurement Remedies Directives. Member States have two years from publication of the new directive to implement it in national law and once this is done there will be a significant increase in the remedies available to, aggrieved potential suppliers. This is likely to lead to an increased number of procurement challenges in the UK.
A degree of protection is already available to bidders under the current Remedies Directives and as a result of the Alcatel decision, embodied in the UK in the Public Contracts Regulations 2006 (s32(1) and 32(3)) and the Utilities Regulations 2006 (s33(1) and 33(3)). There has, however, been some uncertainty as to how these provisions apply in practice and considerable criticism of the fact that these provisions do not address some of the most serious breaches of procurement law such as the illegal direct award of public contracts without competition and the misuse of framework agreements.
The new Directive addresses some of these issues, giving aggrieved bidders more opportunities to challenge award decisions and to obtain injunctive relief. As a result, contracting authorities will need to be particularly careful to ensure that they are properly complying with the procurement rules on transparency and competitive tendering.
What are the main points proposed in the new Directive?
In summary, the new Directive provides that:
Contracting authorities in fully regulated, competed procurements will continue to have to wait for at least 10 days after deciding who has won the public contract before the contract can actually be awarded (although Member States may make certain derogations from this requirement).
This regime will also apply for call-off contracts under frameworks, although, again, Member States may make certain derogations.
Where a contracting authority considers that it is allowed to award a public contract over the thresholds directly without prior transparency and prior competitive tendering it should:
adopt an award decision which has no contractual effect and which is amenable to review
and shall publish a notice ensuring a sufficient degree of publicity (for which purposes a standard contract award notice is adequate).
Such a contract may only be concluded after at least 10 calendar days following the publication of such notice.
If the standstill period has not been respected, the Directive requires the national review bodies under certain conditions to set aside the signed contract, by rendering the contract “ineffective”. This may include the retrospective cancellation of all contractual obligations – Member States may provide for exceptions (a limitation period of at least six months and/or national interest grounds).
Minimum information should be given to bidders in contract award notices such as reasons for the award and the appropriate standstill period.
Where general interest exceptions prevent a contract being rendered ineffective, Member States are to ensure there are “effective, proportionate and dissuasive” alternative penalties. Typical remedies may include large fines or shortening the duration of the contract.
More information on the background to these changes can be found at:
For more information about this Directive or how it might impact your procurement, please contact Peter Elliott or Liz Upton on 0207 415 6000 or firstname.lastname@example.org or email@example.com.
Bird & Bird plan on holding a detailed seminar on this Directive in 2008, please register here if you would like more details about this: firstname.lastname@example.org.
Bird & Bird are a registered legal service provider on the Office of Government Commerce’s Catalist framework.
 Directive 89/665 (for Public Sector Contracts) and Directive 92/13 for utility contracts.
 Case C081/98 Alcatel Austria and Others  ECR 1-7671