Public Procurement

IRELAND

CASELAW TRENDS

In Ireland, the Courts have recently handed down several public procurement judgments.

Automatic Suspension

The Court will not lightly agree to the continuation of an automatic suspension, particularly in the circumstances of some cases. An example is provided by CHC Ireland DAC (applicant) v the Minister for Transport (respondent) and Bristow Ireland Ltd (notice party) [2023] IEHC 457, in which Mr Justice Twomey lifted the automatic suspension halting the award of a 10-year, €800 million contract for the provision of aviation services to support the Irish Coast Guard’s search and rescue work. Our summary of the judgment is here.

CHC Ireland followed the judgment in Glenman Corporation Ltd v Galway City Council [2023] IEHC 336, in which Mr Justice Twomey also took the opportunity to comment on the serious implications of automatic suspension, in order to underline the rationale for strict deadlines for bringing procurement challenges. Our summary of that judgment is here.

Reasons for Rejection

Anyone involved in a procurement exercise will understand the importance of giving reasons for tender rejection in a way that meets the relevant legal standard. To find out more about some of the pitfalls, or the level of detail you are entitled to expect, the judgment in Liam Ó’Dubhgáin t/a WJ Duggan (applicant) v Minister for Culture, Heritage and the Gaeltacht (respondent) [2023] IEHC 396 provides helpful examples. Our summary of that judgment is here.

Costs

Finally, what happens if you are successful in litigation but the Court considers that you should not get full costs? That is what happened in Word Perfect Translation Service Ltd v Minister for Public Expenditure and Reform [2022] IEHC 219, where the Minister successfully defended Word Perfect’s challenge, but was awarded only 50% costs. The Court of Appeal has now overturned that decision and restored clarity around the approach to awarding costs ([2023] IECA 189). Our summary is here.

Foreign Subsidies Regulation

A new Implementing Regulation made under the Foreign Subsidies Regulation sets out procedure and notification forms for foreign financial contributions in public procurement procedures. Further information is available here.

Common Procurement in Defence

A Regulation on establishing the instrument for the reinforcement of the European defence industry through common procurement is nearing finalisation, the EU institutions having agreed the final form. The objective is to foster Member State cooperation in defence procurement. Further information is available here.

Concessions Directive

The Commission has reported on the functioning of the Concession Directive throughout the EU. Further information is available here.

Public Procurement Bill

The second part of a two-part consultations on draft regulations required to implement the Procurement Bill is underway until 25 August 2023. This part focuses on the transparency provisions and notices to be used by contracting authorities to meet obligations under the new legislation. The Welsh Government has published a flowchart for new notices that will be required by the forthcoming legislation.

What is a Concession Contract?

In Dukes Bailiffs Ltd v Breckland Council [2023] EWHC 1569 (TCC), the claimant provided debt enforcement services to the respondent following a competitive procedure under a framework agreement. Following a further competition which the claimant lost, it alleged that the decision was unlawful on several grounds under the Public Contract Regulation (“PCR”).

A key question was whether the local authority was governed by the PCR or the Concession Contracts Regulations (“CCR”). The contract in question would fall within the definition of “public contract” under the PCR unless it came within the definition of “concession contract” under the CCR, in particular the definition of “services concession contract”.

The Court found that the claimant did not have a realistic prospect of success at trial on its claim in relation to breach of the PCR, and gave summary judgment in favour of the respondent. The Court found that the contract was outside the scope of the PCR, and fell within the definition of services concession contract (albeit under the CCR threshold) based on the following:

The contract fell within Regulation 3(3) of the CCR, even though there was a potential direct payment from the authority for ancillary matters.
Regulation 3(4)(a) and 3(5) also applied. Under normal operating conditions, there was ‘no guarantee’ of recouping costs or investments.
Regulation (4)(b) also applied. Whilst a fee if recovered would cover costs of enforcing a particular debt (and possibly a profit), as fee recovery averaged less than 25% from debtors overall, fees were not so high as to reduce risk to negligible potential estimated loss. The incumbent claimant was profitable and efficient, but some inefficient firms would make a loss.

Another element of the claim (breach of contract) will continue to trial. However, this judgment contains a helpful analysis of regulations and EU and UK caselaw relating to concession contracts.