Delaying Challenging a Public Tender Award – Don’t Lose Your Rights!

Timing is critical to the success of a challenge to a public tender.

Typically, an unsuccessful bidder will receive a letter from the contracting body notifying them that they have not won the tender, what their scores were and what the scores of the successful bidder(s) were.  Assuming it is an above threshold tender, they will also be told that the contracting body will allow a ten-day standstill period before they enter into the contract with the winning bidder.   That is ten actual days, rather than ten working days. So, once you have taken into account weekends and bank holidays, the actual time available could be five working days or possibly less.

In that short period, the unsuccessful bidder has to deal with the disappointment of losing, review in detail exactly why it lost and why the successful bidder won and decide whether to challenge the tender award.  The law on procurement challenges is not straightforward and this will often require the unsuccessful bidder to take legal advice.  Allowing time for all that to happen can take you to the very end of the ten-day standstill period.  That is not necessarily a problem as it is usually possible to agree an extension to the standstill period with the contracting authority to allow them time to review and respond to your procurement challenge, rather than heading straight to Court.

However, there is a very important deadline which all bidders must keep firmly in mind throughout this period – the 30-day rule.  Regulation 92(2)  of the Public Contracts Regulations 2015 states that “… proceedings must be started within 30 days beginning with the date when the economic operator [i.e. the bidder] first knew or ought to have known that grounds for starting the proceedings had arisen”.

If 30 days passes from the date of you receiving the Contract Award Letter (or otherwise first becoming aware of the ground of challenge) and you have not taken action to preserve your claim, such as issuing court proceedings, it is likely to be very difficult for you to avoid your claim being statute barred.

The importance of reacting and taking legal action without delay has been re-emphasised by the Court in the recent case, Riverside Truck Rental Limited v Lancashire County Council (2020 EWHC 1018). In that case, Riverside Truck received notification from Lancashire County Council on 29 November 2019 that they had been unsuccessful in the tender for supply of tractor cabs and trailers and, in fact, had been disqualified. A few days later, on 2 December 2019, Riverside Truck wrote to the Council disputing the tender outcome and saying they would legally challenge the award if their bid was not considered.  After further correspondence, the Council agreed to extend the standstill period, but only until 12 December 2019 (i.e. from 9 December 2019).

The matter was not resolved, and Riverside Truck issued Court proceedings but not until 24 January 2020.  The 30-days under Regulation 92(2) had expired on 30 December 2019 at the latest, so the proceedings were issued over three weeks after the deadline had expired.

Riverside Truck made an application to the Court for an extension of time to allow them to sue the Council after the 30 days had expired and provided multiple arguments as to why the application should be granted.  Unfortunately for Riverside Truck, all were rejected by the Court.  The unsuccessful arguments included:

1. The 30-day period coincided with the Christmas and Holiday period which made issuing in time more difficult.
2. Riverside Truck had acted reasonably in spending the first week of the 30-day period trying to reach an amicable resolution with the Council so should be allowed more time to issue proceedings
3. Riverside Truck did not have all the information it needed to fully formulate its challenge until 10 January 2020. The missing information was the winning bidder’s contract price which Riverside Truck say they needed to determine whether they would have won the challenge. The Court held that time started to run for the claim when they first became aware that the Council had breached the Regulations, not when they had all the information they needed to fully present their case.
4. The Council should have realised that Riverside Truck were mistaken in believing they had longer than the 30 days under Regulation 92(2) to issue legal proceedings and should have told them. The Court held there was no obligation on the Council to point out legal mistakes made by Riverside Truck.
5. That there was a public interest in allowing the claim to proceed to ensure that the Council obtained best-value for money and awarded the contract to a local company. If Truck Rentals bid had won, their contract price was £1million lower than the successful bidder. The Court held that a procurement challenge is a private claim by the bidder rather than a public challenge, such as a judicial review, and that this was not outweighed by the public interest in protecting the rapid process for the award of public contracts which a strict enforcement of time limit would support.

The Court rejected all of Riverside Truck’s arguments meaning that their procurement challenge is now statute-barred.

Although timing is critical when challenging a tender award, there is always sufficient time for a well-organised bidder to take the necessary action to overturn and correct an incorrect tender award or any other mistake made by a contracting authority.

If you receive a letter notifying you that your bid has been unsuccessful, the following practical tips are advisable:

Review the contract award with your bidding team to establish whether your bid (and the winning tenderer’s bid, as far as possible) has been evaluated correctly. Points to check included:

1. Has the contracting authority understood the answers and information given in your bid correctly?
2. Has the contracting authority applied the marking scheme correctly?
3. Have you lost marks for failing to address issues which were not included in the tender questions?
4. Basic mathematical errors in the calculation and weighting of marks?

Assess whether you have all the information you need from the contracting authority to determine whether they have correctly evaluated your bid.

Given the short time available, consider taking legal advice at the outset.

Present your challenge in writing, including requesting further information and seeking an extension to the Standstill Period if necessary.

Don’t delay and keep a careful eye on deadlines!

Clarkslegal’s procurement team has considerable experience in advising clients on challenges to tender awards and is often able to resolve mistakes in the evaluation process through correspondence with the public body without the need for expensive legal proceedings.