Public Procurement

EU

Corrections to EU procurement legislation

The EU published minor corrections to the Public Contracts Directive 2014/24/EU, available here, and the Utilities Directive 2014/25/EU, available here.

Defence

A new Regulation (EU) 2023/2418 on establishing an instrument for the reinforcement of the European defence industry through common procurement (EDIRPA) is in force. It establishes a short-term instrument for reinforcement of the European defence industry through common procurement for the period 27 October 2023 to 31 December 2025.

Social impact

The European Parliament has produced a study on the social impact of public procurement. It considers the possibilities offered by EU public procurement law to achieve social goals and how these have been transposed into national law and implemented by contracting authorities. It also aims to identify obstacles in existing provisions and make recommendations for change.

IRELAND

Corrections to public tender documents

The Office of Government Procurement published corrections to the Public Works Contracts and Invitations to Tender, available here.

Whole life costs

The Office of Government Procurement published Cost Control Templates incorporating the International Cost Management Standard 3 for a range of project types. Use in contracts going to tender is currently optional but use will become mandatory for projects commencing Stage (i) of the Capital Works Management Framework in January 2024.

Court of Appeal upholds decision in CHC Ireland DAC v the Minister for Transport and Bristow Ireland Ltd

We previously considered the judgment in 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 briefing on that judgment is available here.

A further High Court judgment [2023] IEHC 581 dealt with costs. The High Court awarded Bristow the costs not just of providing affidavit evidence in support of the respondent’s case (which CHC accepted Bristow would be entitled to) but also the costs for appearing at the hearing. Bristow was not awarded costs for written legal submissions (which were similar to those of the respondent).

The Court of Appeal has now upheld the High Court’s decision to lift the automatic suspension ([2023] IECA 229). The issue for consideration was whether the balance of justice favoured the lifting or retention of the suspension and the crucial issue was where the greatest risk to life lay. The Court of Appeal considered that the risk that Bristow may not be ready to commence provision of the service on 1 July 2025 was far outweighed by the risk that it may not be lawful for the Minister to extend the existing contract with the incumbent CHC for an indefinite period of time (which would lead to a situation where there would be no lawful means of providing any service after 30 June 2025 for a very considerable period of time). The Court outlined other practical aspects of the case which led it to conclude that securing the provision of life-saving services supported the lifting of the suspension.

UK

New public procurement regime

The Procurement Act 2023 is enacted, bringing a new legal framework for public procurement into law in the UK. Much of the Act needs to be brought in by Regulations as set out at section 127.

The Act extends to England and Wales, Scotland and Northern Ireland. A Northern Ireland department may only exercise a power under the Act for the purpose of regulating: (a) contracting authorities that are transferred Northern Ireland authorities; (b) contracting authorities that are public undertakings or private utilities that are not transferred Northern Ireland authorities, but for the purposes of this Act, are to be treated as transferred Northern Ireland authorities; or (c) procurement under a transferred Northern Ireland procurement arrangement. Definitions of these terms are elaborated at sections 112 and 114.

When section 119 is commenced, the following will be revoked: the Defence and Security Public Contracts Regulations 2011; the Public Contracts Regulations 2015; the Concession Contracts Regulations 2016; and the Utilities Contracts Regulations 2016.

Recent explanatory notes on the Act are available at this page.

New Thresholds

The Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations 2023 update the thresholds in UK procurement legislation. For the Public Contracts Regulations 2015, they are (inclusive of VAT): £5,372,609 for public works contracts; £139,688 for public supply contracts and public service contracts awarded by central government authorities; and £214,904 for public supply contracts and public service contracts awarded by sub-central contracting authorities.

Cyber Essentials Scheme

The UK Government published PPN 09/23: Updates to the Cyber Essentials Scheme. Since 2014, the UK Government has required suppliers bidding for certain types of public contracts to hold Cyber Essentials or Cyber Essentials Plus certification (or demonstrate that equivalent controls are in place).

Irremediable losses suffered by wider group argument fails

The High Court in England and Wales granted an application to lift an automatic suspension in Teleperformance Contract Ltd v The Secretary of State for the Home Department [2023] EWHC 2481 (TCC). It was not disputed that there is a serious issue to be tried. The Court decided that damages would be an adequate remedy for the claimant should it succeed, but not for the respondent should it succeed, and that the balance of convenience lay in lifting the suspension.

The claimant in this case argued that damages would be an inadequate remedy for irremediable losses suffered by its wider group company. The Court identified the relevant principles in relation to granting injunctive relief at paragraph 41. These included that there may exceptionally be circumstances in which injury to third parties caused by the violation of rights may be considered relevant.

The Court decided that it was not appropriate to consider losses suffered by the wider group for the reasons set out at paragraph 42. The group organised its business through a network of SPVs. As noted in Circle Nottingham Limited v NHS Rushcliffe Clinical Commissioning Group [2019] EWHC 1315 (TCC), such arrangements come with advantages and disadvantages. A disadvantage may be that losses which otherwise would have been sustained in the claiming business are sustained by a third-party entity with no right of action and to whom no duty is owed. Further, the primary loss of a commercial contract will be the loss of profits sustained by the losing bidder, irrespective of whether it is an SPV, and the loss of profits will generally be capable of assessment by way of damages. Further, the other SPVs in the group were not economic operators with any standing to make their own claim and there was insufficient nexus between the losses caused to the various SPVs and the claimant’s losses.