Tenders Direct Blog

Comment from the experts at Tenders Direct.

How do you challenge a buyer when you feel the procurement is flawed?

Posted by Gemma Waring on May 20, 2015

This blog covers the remedies directive for the public sector and when/how you can raise a challenge against a contracting authority.

The EU Remedies Directive was created in 2007 and transposed into UK law with the updated Public Contracts Regulations in 2009. The Directive brought in two very clear and important changes for suppliers to be aware of which were:

  • a right to challenge the buyer if a contract is entered into before the compulsory standstill period has ended (standstill being the minimum 10 day period where buyers notify all bidders of the intended outcome before contracts can begin); and
  • an automatic right to challenge an award decision and have the contract cancelled or modified if there has been any breach of the wider procurement rules.

In addition, the 2009 Regulations introduced a number of other changes, including:

  • An explicit duty to debrief unsuccessful bidders at the PQQ stage – not in writing specifically but some form of feedback is required,
  • A clarification of what information is required in the Alcatel letters – these are the letters issued to the unsuccessful bidders to commence the standstill period which must contain the name of the winning tender, the award criteria (including weightings), your scores, and the winning tenderer’s scores, the characteristics and advantages of the successful bid, a detailed scoring breakdown and the date the standstill is expected to end. (Will be a minimum of 10 days); and
  • The explicit inclusion of framework agreements in the regulations to notify buyers and suppliers that they were subject to the full terms of the regulations.

So what has changed with the 2015 Public Contracts Regulations?

In short nothing has changed. The Remedies as they stand have been included into the 2015 Public Contracts Regulations in Part Three, Chapter 5, Regulations 85-87.

So what can you do if a buyer doesn’t follow the rules?

Under the 2015 Public Contracts Regulations you have a right to challenge a buyer that you feel has not followed the rules during the procurement process or that has unfairly awarded the contract to another supplier.

Many suppliers we speak to are reluctant to raise challenges as they worry about the long term impact of doing so and souring the relationship with the buyer for future work. While we would agree that each situation has to be looked at individually for each business, a challenge raised in the correct way can be a positive step as it will show that a) You know how tendering works and are a serious bidder and b) could provide an opportunity for the buyer to improve practice going forward.

When to raise a challenge:

  • If your procurement procedure falls under the scope of Part Two of the regulations you are able to raise a challenge which can also be known as a ‘declaration of ineffectiveness’ in certain circumstances.
  • If possible you must raise your challenge within 30 days of noticing or becoming aware of a potential issue. This may not be until you receive the standstill letter but from October 2011 it was agreed that the onus was on the supplier to raise a challenge within 30 days of noticing the issues with the procurement (say for example if you ask a clarification question and do not receive adequate information to decide whether or not to bid for the contract) rather then from the point of the standstill notice or after contract award which was previously the case in common practice.
  • This has been codified in regulation 92 (2) with exceptions to this rule being noted in 92 (3) and 92 (5).  The exceptions are generally where the 30 days can be extended by the courts but even then they can only extend the window for challenge up to three months.
  • You must serve the buyer with your claim form within 7 days of starting the proceedings against them.

How to raise a challenge:

  • Firstly, we would always recommend you use the Q&A log to raise clarification questions with the buyer before taking a formal challenge route. Asking the right questions in a polite and professional way will give the buyer the chance to rectify what will most likely be a genuine oversight/error or provide you with the information you need. It will also act as a formal record of your attempt to rectify the issues informally if proceedings are later drawn up against the buyer.
  • If this proves unsuccessful the most important thing to do as a supplier is to formally write down your challenge and email it or send it by recorded delivery to the buyer as soon as possible. If for example your question was not answered fully on the Q&A log but you went ahead and bid anyway, only to be unsuccessful and then seek to raise a challenge based on the fact you didn’t have the information you needed it is very unlikely that your claim would be upheld as you did not go back to the buyer and request further clarification before submitting your bid.
  • Make sure your email/letter contains the following: Your contact details, a clear reference to the procurement in question, a concise run down of what your challenge is, a note of any steps taken to mitigate or solve the issue previously, any communication to date from the authority on this issue and an indication of what you feel would be a suitable resolution to the issue. For example you may want to have them restart the procurement or you may be happy to settle for a financial award.
  • From this point forward it is vital that you maintain a paperwork trail and if speaking to the buyer in question face to face or over the phone you confirm the detail of the conversation(s) in writing along with any agreements made.
  • We would always suggest that you seek proper legal advice before beginning any proceedings against a buyer so the validity of your claim and its likelihood of success can be advised.

There are other avenues to challenge a decision such as the Mystery Shopper service which we will be covering on a later blog along with less direct routes such as the general complaints department for the contracting authority if you feel your challenge would be better received by a third party.

If you require any further information on this topic please feel free to contact our training department on 0844 561 0675 or via training@millstream.eu

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4 Responses to “How do you challenge a buyer when you feel the procurement is flawed?”

  1. Dawn said

    can A PPQ result be challenged as an appeal procedure in a stage two tender?

    • Gemma Waring said

      Hi Dawn,

      Yes you can appeal at the PQQ stage in a two stage tender. The general convention is to challenge within 30 days of the breach of process so the sooner you can raise the challenge the better.

      Gemma

  2. Laura Van zyl said

    On a current framework tender we have been told that we must have an external audit carried out at our own cost prior to award. We have recently undergone an audit for another tender however they will not accept this audit. This will be at a cost of around £1,200 which is a lot to pay if we are not awarded. Is this allowed under EU Procurement Rules?

    • Dear Laura,

      You don’t specify whether this is a financial audit, or the audit of another aspect such as quality assurance, but the principles are similar in either case.

      Regulation 60 of the Public Contracts Regulations 2015, specifies the Means of Proof relating to the selection criteria and reads as follows:

      Proving economic and financial standing
      (6) Proof of the economic operator’s economic and financial standing may be provided by one or more of the following references:—

      (a)appropriate statements from banks or, where appropriate, evidence of relevant professional risk indemnity insurance;

      (b)the presentation of financial statements or extracts from the financial statements, where publication of financial statements is required under the law of the country in which the economic operator is established;

      (c)a statement of the undertaking’s overall turnover and, where appropriate, of turnover in the area covered by the contract for a maximum of the last 3 financial years available, depending on the date on which the undertaking was set up or the economic operator started trading, as far as the information on those turnovers is available.

      (7) Where the references mentioned in paragraph (6) are not appropriate in a particular case, the contracting authority may require the economic operator to provide other information to prove its economic and financial standing.

      (8) Where, for any valid reason, the economic operator is unable to provide the references or other information required by the contracting authority, it may prove its economic and financial standing by any other document which the contracting authority considers appropriate.

      There is no requirement to provide audited accounts and unless the contracting authority has reason to disbelieve the accounts information you provide this should not be used as a reason to exclude you.

      You say that they will not accept an audit which has recently been completed. Unless there are particular reasons why this audit is unacceptable this appears to be contrary to Paragraph 4 of Regulation 58 which states:

      All requirements shall be related and proportionate to the subject-matter of the contract.

      It is difficult to give you a definitive answer without some more detailed information, but I hope this is helpful?

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