Is the tendering process at risk of being undermined by increased litigation brought by losing bidders?

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Recently, we have seen an increase in successful challenges to public procurements by aggrieved bidders. Those are just the reported cases that went to Court - many more will have settled outside. In times gone by, there was a feeling that the (OJEU) procurement rules were all very well, but rarely challenged. However, bidders are now more willing to challenge and the Courts have repeatedly shown that they will enforce bidders’ rights.

The recent cases have eroded the perceived levels of discretion enjoyed by procuring authorities. When added to Freedom of Information obligations, procuring authorities must now take great care over every decision on a procurement, particularly for major projects.

In addition, the available remedies for aggrieved bidders are soon to change and swing further in their direction. By the end of this year, the latest (2007) EU Directive on procurement remedies should be implemented across the EU. The exact detail of implementation in the UK has yet to be seen, but it will most likely include a new remedy that for up to six months after a contract has been concluded, it may be declared ineffective in cases of the most flagrant breaches of the procurement rules. Until now, the only remedy once a contract had been entered into has been damages. It is difficult to see how bidders would be unhappy with this, even if it may tend slightly towards more protracted and time-consuming tendering processes. From the authorities' perspective it invariably increases the risks associated with non-compliance, and, potentially, the costs associated with demonstrable compliance. Indeed, there may come a point where the efficiencies, which the OJEU rules were designed to bring about in the first place, are curtailed by the requirement to dedicate such heavy resources to the procurement process itself.

Tiffany Cloynes and Vincent King - Cobbetts LLP