Record keeping and challenge risk
Ruth Connorton and Tim Dennis consider the new reporting and documentation requirements imposed by the Public Contracts Regulations 2015 and the care required in the creation of documents throughout a procurement process due to the risk of disclosure in subsequent legal challenges.
The Current Position
Case law has firmly established that in the event of a legal challenge, aggrieved bidders will more often than not have the right to obtain copies of documentation created during a procurement process.
Applications can be made to the Court for disclosure of material relevant to the issues in dispute. Requests for documentation are also regularly made by aggrieved bidders in accordance with the procurement regulations, the Civil Procedure Rules and under the Freedom of Information Act 2000.
In many cases, the content of such disclosure is used to support, or form the basis of, a claim that the authority has failed to carry out the procurement in a complaint fashion.
The New Requirements
Reporting
Regulation 84 of the Public Contracts Regulations 2015 now requires that a written report is created by the authority in relation to each contract and framework agreement awarded (subject to some exclusions) and every dynamic purchasing system established. The report must include at least the following:
- authority details, the subject matter and value of the contract;
- where shortlisting or de-selection ( e.g. in competitive dialogue) has occurred details of who was selected and rejected and the reasons;
- reasons for rejection of any abnormally low tenders;
- the name of the winning bidder and the reasons why its tender was selected, and if known any sub-contracting levels and main sub-contractor identities;
- for competitive dialogue and negotiated procedures: the justification for the choice of procedure;
- reasons for any decision not to make an award;
- reasons why any non-electronic communication has been used for tender submission;
- any conflicts of interest detected and subsequent measures taken.
This report (or its main elements) must be communicated to the Commission, or the Cabinet Office where a request is made.
Documentation retention
Regulation 84 also requires contracting authorities to document the progress of all procurement procedures and, to that end, keep documentation for at least three years to "justify decisions taken in all stages of the procurement procedure" such as on:
- communications with bidders and potential bidders and internal deliberations;
- preparation of procurement documents;
- any dialogue or negotiation;
- selection and award of the contract.
Authorities should consider establishing dedicated systems for the creation and storage of such reports and documentation. It is sensible to consider establishing a template report as part of your procurement toolkit so that information is collected in a consistent and timely fashion and to ensure that it is quickly to hand if requested.
Most of the information included in the written report should not be contentious but care will need to be taken in the production of reports and the creation of any supporting documentation or drafts which could include comments or queries not intended for publication.
Friend or Foe?
The documentation kept to justify decisions taken will be of real interest to potential challengers as this will create a picture of how the entire process has been carried out and could be used to highlight inconsistencies between the approach outlined in the procurement documentation and the approach actually taken. Again, real care will be needed in the creation of such documentation given that it will be forensically reviewed by an aggrieved bidder's lawyers in the event of potential legal challenge.
Whilst the requirement to create and record more documentation might be onerous, authorities should see this as an opportunity to ensure that the procurement has been carried out in a compliant fashion. This process may afford the opportunity to spot errors, inconsistencies or areas of potential risk during the process and prior to award, which may mean that they can be rectified prior to any challenge being brought.
The other positive point is that the creation and retention of a clear, consistent suite of documents which reflect a compliant procurement process may well satisfy an aggrieved bidder that there are no legitimate grounds for challenging the decision despite its disappointment at not being awarded the contract.
Ruth Connorton is a partner and Head of Procurement Law and Tim Dennis is a Senior Solicitor at DAC Beachcroft. Ruth can be reached on 0191 404 4130 or This email address is being protected from spambots. You need JavaScript enabled to view it., while Tim can be contacted on 0191 404 4003 or This email address is being protected from spambots. You need JavaScript enabled to view it..
