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Time for a debrief

Rule changes coming into force later this month mean that contracting authorities will have to provide more information under debriefing provisions in public procurements. Deborah Ramshaw explains what is involved.

The new Public Contracts (Amendment) Regulations 2009 come into force on 20 December 2009. The provisions will apply to all contract award procedures commenced after this date. For the purposes of the new Regulations “commencing” your award procedure means sending an OJEU notice for publication, publishing any form of advertisement seeking offers for a contract or contacting any potential provider in respect of entering into a proposed contract.

This article will focus on the changes made to the debriefing requirements and the practical implications of this for local government procurements.

The 2009 Regulations introduce a range of changes which local government procurement officers and legal advisers need to be aware.

Regulation 29A

A new Regulation 29A has been inserted. Interestingly this provision is not to be found in the Remedies Directive which these Regulations implement, rather OGC have taken the opportunity to introduce the provision which they say is necessary for the new remedies regime to function effectively. 29A introduces an explicit obligation on authorities to notify (note that this is a notification requirement only, not a duty to provide reasons under 29A) participants when they are eliminated from a procurement exercise at any point before the contract award decision. In practice, the majority of authorities will always notify those who have been unsuccessful at the various stages of procurement so this should not create any additional burden on contracting authorities.

Amended Regulation 32

The substantive changes in respect of debriefing have been made to an amended Regulation 32 (readers will find it helpful to use the unofficial consolidated text for Regulation 32 which OGC have published on their website: www.ogc.gov.uk):

  • The “Alcatel” or mandatory standstill letter has been a requirement in the UK since the 2006 Regulations came into force. These provisions remain but have been updated and supplemented such that authorities will need to review any standard documentation that they use in respect of this standstill period.
  • The letter itself must now contain more information than previously. Authorities will be aware that the letter must contain the award criteria used to select the winning bid, the score obtained by the recipient of the letter/notice, the score obtained by the winning bidder and the name of the winning bidder. In addition, the letter must now contain “…the reasons for the decision, including the characteristics and relative advantages of the successful tender…”.  (Discussed further below).
  • The letter must now also contain either (a) the precise date when the standstill is expected to end and, if relevant, how that ending may be affected by any, and if so what, contingencies; or (b) the date before which the authority will not, in conformance with the standstill requirements, enter into the contract or conclude the framework agreement.
  • The original requirements on replying to requests for feedback within 15 days from receipt of a written request remain in place but only to the extent that the information has not been given under the standstill letter already.
  • The original provisions on withholding information where disclosure would impede law enforcement, prejudice legitimate commercial interests of economic operators etc, also remains in place. This will still be relevant in terms of withholding extremely confidential information, such as a detailed price breakdown, where the disclosure of such information is likely to prejudice the commercial advantage of the winning bidder.

“Characteristics and Relative Advantages”?

The information now to be provided in the standstill letter requires more than scores to be provided. “Reasons” for the decision including the “characteristics and relative advantages” must also be provided: what does this mean in practice? It would certainly appear to mean that more than a spreadsheet of scores must be provided and that some form of narrative is also required.

The wording above was previously to be found in the old Regulation 32(4): in effect this was the information to be provided to a bidder where they asked for further information within the two working day window of the standstill period. The drafting itself is therefore not new but the requirement to now provide this information “up front” is new.

There is no guidance published by OGC or the Commission on what “characteristics and relative advantages” means but the wording is taken directly from the EU directive on public procurement.  In the context of EU law the drafting needs to be given its ordinary meaning and with a purposive approach, i.e. to ensure that the purpose of the Regulations is observed. Looking at Chambers Dictionary definitions of both “characteristics” and “relative” “advantages” leads to the former drafting dealing with a requirement to disclose the distinctive or distinguishing aspects of the winning bid. The latter would require a comparison of the losing and winning bids to be undertaken so as to analyse the areas where the winning bid was superior to the losing bid.

The requirements under the old Regulation 32(4) were examined in a recent Scottish case (Lightways (Contractors) Limited v North Ayrshire Council [2208] CSOH 91). The Court in this case said that the council had taken “a narrow view of “relative advantages” and restricted the discussion to areas where the [winning bidder] had scored higher than the defendant”. Satisfaction of the requirement may not therefore be met by simply highlighting those areas where the winning bidder scored higher than the losing bidder. The judge in this case said it was important that the information provided enabled the unsuccessful bidder to be put in a position in which it can clearly identify the reasons for rejection in order that it can defend its rights.

Conclusion

In practice this therefore means that the standstill letters sent to losing bidders will need to be much more detailed than in the past. This will be the case particularly where there is a complex evaluation methodology. Precedent letters currently used by authorities will need to be amended for all award procedures commenced after 20 December 2009 to take account of the new provisions.

Authorities should be aiming to draw up their letters at the end of the final evaluation process when they have all the information to hand. However, authorities will also need to be aware of confidentiality issues in respect of the information to be disclosed in the letters and ensure that disclosure does not leave them vulnerable to claims from the winning bidder in respect of breach of confidentiality. These new provisions, together with the rest of the 2009 Regulations, place bidders in a position where more transparency is required from authorities: failure to follow the provisions could place authorities at risk of challenge.

Deborah Ramshaw is Head of Procurement at Dickinson Dees. She can be contacted on 0191 279 9836.