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Procurement in a Nutshell – Court considers time limits for starting procurement proceedings

Last week's Nutshell considered the High Court's judgment in SRCL Limited v NHS England and its focus on the situation where it is alleged or suspected that an abnormally low bid has been made by a tenderer.

Please click here to view last week’s Nutshell and here to view the full judgment.

However, in addition to this, the judgment also provided a useful overview of the general time limits for starting proceedings, as set out by Regulation 92 of the Public Contracts Regulations 2015.

The facts

The auction which the Claimant disputed took place on 26 April 2017 meaning that the 30-day period within which proceedings must be brought under the Public Contracts Regulations expired on 25 May 2017.  However, despite this being the case, proceedings were issued by the Claimant on 30 June 2017.

As a consequence of this, in arriving at its decision the Court considered the following issues:

  • Did the Claimant commence proceedings in respect of the breaches alleged within the 30-day limitation period under Regulation 92 (2) of the Public Contracts Regulations 2015; and
  • If not, should an extension of the time be granted pursuant to Regulation 92 (4) of the Regulations?

The Regulations

Regulation 92 of the Public Contracts Regulations sets out the general time limits for any party starting proceedings.

With regard to this, Regulation 92 (2) states that:

“such proceedings must be started within 30 days beginning with the date when the economic operator first knew or ought to have known the grounds for starting the proceedings had arisen.”

Furthermore, Regulation 92 (4) clarifies that:

“the Court may extend the time limits imposed by this regulation where [it] considers that there is a good reason to do so.”

The Judgment

In respect of each of the above issues, the Court held that not only had the proceedings been brought outside of the 30-day time limit; there was “no good reason” to justify an extension of time under Regulation 92 (4).

In relation to the latter point, the judgment was particularly useful in that it stated that the following principles apply where an extension of time is sought under Regulation 92 (4):

  • There must be a good reason for extending time;
  • One of the matters that the Court will consider is whether there was a good reason for the claimant not issuing within the time required, such as an illness or something out of the claimant’s control which prevented the claimant from doing so;
  • It would be unwise to seek or limit in advance what factors should be considered to have relative weight to one another in that exercise;
  • The Court will take a broad approach in all the circumstances of the particular case;
  • The categories are not closed or exhaustively listed in the cases.  Lack of prejudice to the defendant is not a determinative factor.”

In this instance, the Court was of the opinion that none of the listed principles was applicable and as such it was not appropriate that an extension was granted.

Furthermore, the Court cited previous case law stating:

“[it is] good policy reason that it is in the public interest that challenges to the tender process of a public service contract should be made promptly so as to cause as little disruption and delay as possible.  It is not merely because the interests of all those who have participated in the tender process have to be taken into account.  It is also because there is a wider public interest in ensuring that tenders which public authorities have invited for a public project should be processed as quickly as possible.”

Why is this important?

The case is an important reminder to those looking to challenge aspects of procurement procedures of the need to comply with the strict time limits set out in the Public Contracts Regulations.  Similarly, the clear and reasoned wording of the judgment explains the situations where the Court may be willing to make an exception and the factors it will take into account when making such a finding.

If you are considering challenging the award of a contract, or would like any other procurement advice, please click here.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

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