When your bid doesn’t succeed: first steps in challenging a contract award

Once the award of a contract is published, the clock starts ticking. Whether you are an unsuccessful bidder or an awarding authority, you will need to take quick and decisive action if a potential challenge is on the cards.

The issue of the award decision notice starts the 10-day ‘standstill period’ within which (in applicable cases) any prospective challenger must issue proceedings if they want to benefit from the automatic suspension which stops the contract being signed. This may also be the trigger for the 30-day period within which a challenger could seek a Declaration of Ineffectiveness in an attempt to overturn the award of a contract which has already been signed or commenced.

With so little time available, what are the key considerations for a would-be challenger to a contract award? We look here at contracts awarded under the Public Contracts Regulations 2015.

1. Identify the timescales.

The standstill period expires at midnight at the end of the tenth calendar day after the date on which award decision notice was issued (where it was sent by electronic means).

The 30-day limitation period which applies to claims for a declaration of ineffectiveness runs from the point at which the unsuccessful bidder first knew, or ought to have known, that there were grounds for bringing a claim. That may well be the date of the award decision notice, but may be earlier.

Given the need to identify the potential grounds of any claim, to assess the risk of bringing a claim and to prepare the paperwork for the court within these timescales, the benefits of securing prompt and effective legal assistance are clear.

2. Are there any procedural irregularities?

You will need to review the bid documentation, the process followed and the award decision notice. For example:

• Was the contract correctly advertised and any timetable followed?
• Are there any mistakes in the bid documentation or award decision notice?
• Does the award decision notice include the required information?
• Has the awarding authority entered into a contract with the successful bidder during any standstill period?

3. Are there any other factors which might give scope for a challenge?

This requires a more subjective review, and urgent input should be sought from commercial/technical teams as well as legal advisors. There are various scenarios to consider here, for example:

• Can you identify inconsistencies in the way bids have been marked or weightings applied?
• Have the bid criteria been correctly applied?
• Have answers to mandatory questions been “failed” without apparent justification?

This assessment is often made more difficult by limitations in the information available. Engaging promptly with the awarding authority may help to fill some of the gaps, and there are some steps (such as setting up a confidentiality ring or seeking formal disclosure) which might be taken where information critical to your ability to assess the strength of any claim isn’t forthcoming.

4. Assess the costs/benefits

Whilst contract values are often very substantial, the costs of mounting a procurement challenge can be very significant. Any estimate will need to include a contingency to cover the possibility that the awarding authority may make an application to overturn any automatic stay and that other interested parties may look to play a more active role in any proceedings.

Against that cost, you need to sense check your end goal. In reality a re-run of the bid process may be unlikely. If you are challenging the marking scheme with the aim of joining a panel of successful bidders, you would need to try to gauge whether any reassessment is going to push you far enough up the queue. Be prepared for the fact that your idea of what is achievable may have to shift as the proceedings progress.

If you would like to discuss any issues arising from this note, or would like any assistance in relation to a challenge to an award of a contract by a public sector body, please contact Clare Murphy on 0121 312 4785 or at [email protected]