The relevant domestic legislation is as follows:

• the Public Contracts Regulations 2015 (PCR 2015), which applies to public sector procurements;
• the Utilities Contracts Regulations 2016 (UCR 2016), which applies to procurements by certain regulated utility companies;
• the Concessions Contracts Regulations 2016 (CCR 2016), which applies to the procurement of works and services concession contracts; and
• the Defence and Security Public Contracts Regulations 2011 (DSPCR 2011), which applies to the procurement of certain defence and security contracts.

With the exception of the DSPCR 2011, which applies on a UK-wide basis, the above procurement legislation applies only to England, Wales and Northern Ireland. Scotland has its own procurement legislation, although it is substantively similar to the procurement rules that apply to the rest of the UK.

Unless otherwise specified, the responses below relate to the application of the PCR 2015, on the basis of which the majority of regulated contracts are awarded. Accordingly, any reference in this chapter to “the legislation” should be construed as a reference to the PCR 2015, whilst any reference to “the Regulations” should be construed as a collective reference to the procurement legislation listed above.

The Regulations (as well as Scottish procurement legislation) implement domestically EU procurement directives that regulate the award of certain contracts by public bodies and certain utilities (including certain private sector utilities). Although EU law no longer applies to or in the UK (other than in Northern Ireland in certain circumstances), the Regulations continue to constitute good law and apply domestically in an amended form (see below).

The UK ceased being a member of the EU on 31 January 2020. However, under the Withdrawal Agreement that sets out the terms of the UK’s exit from the EU, EU law continued to apply to and in the UK until the end of the “transition period” at 11pm GMT on 31 December 2020.

Impact of Brexit on Public Procurement

The Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 (the EU Exit Regulations) came into force at the end of the transition period. The primary aim of this amending legislation was to correct any deficiencies in the Regulations so as to reflect the UK’s new status outside the EU. However, in terms of substantive obligations, in most respects, the law has remained unchanged.

Other more recent developments that relate to the reform of UK procurement law are discussed in 5.4 Legislative Amendments under Consideration.

Separately, as a result of the EU treaties ceasing to have direct effect in the UK, “below-threshold” procurements no longer need to comply with "general EU treaty principles", regardless of whether these contracts would be of cross-border interest to suppliers in an EU member state. The only exception relates to Northern Ireland. By virtue of the Northern Ireland Protocol to the Withdrawal Agreement, general EU treaty principles arguably continue to apply to below-threshold procurements that are of cross-border interest and that involve the provision of goods into Northern Ireland.

The reference to “economic operators” in this chapter should be construed as a general reference to an entity providing goods or services (including works) on the market and includes an applicant that has sought or is seeking an invitation to participate in a contract award process, and a bidder that has been invited to participate in a contract award process and has submitted, or intends to submit, a tender.

The Regulations apply primarily to the award of certain contracts by “contracting authorities”, a term that is broadly defined and captures the overwhelming majority of public bodies. The term applies, for example, to government departments, local authorities, National Health Service trusts and police authorities.

In addition, a smaller group of entities that are not “contracting authorities” may be subject to procurement regulation if they operate in the water, energy, transport or postal services sectors and carry out a regulated utility activity on the basis of “special or exclusive rights” or under the “dominant influence” of a contracting authority. This type of regulated body includes private sector water utility companies, electricity network and distribution operators, and ports.

In the interest of simplicity, this chapter will use the term “contracting authority” to refer to any entity that has an obligation to carry out a procurement process under the Regulations.

In principle, the Regulations apply to the award of contracts for pecuniary interest that are concluded in writing between one or more contracting authorities and one or more economic operators, and that have as their object the execution of works, the supply of goods or the provision of services.

The term “pecuniary interest” means, broadly, consideration (whatever its nature). Judicial authorities have clarified that the provision of goods, works or services in exchange for the full, or even partial, reimbursement of costs can be sufficient for a pecuniary interest to arise.

The award of works and services concession contracts is also subject to regulation. Concession contracts involve consideration that consists, either solely or partly, in the right to exploit the works or services that are the subject of the contract and the transfer to the concessionaire of the operating risk that this exploitation entails.

The Regulations apply only where the estimated value of regulated contracts meets or exceeds certain thresholds. These thresholds are reviewed every two years by the Minister for the Cabinet Office to ensure that they align with the thresholds established in the context of the World Trade Organization’s plurilateral Agreement on Government Procurement (GPA). The most recent amendments to the thresholds (as set out below) apply to regulated contracts awarded on or after 1 January 2022.

The value thresholds under the PCR 2015 are:

• works contracts – GBP5,336,937;
• supplies and most services contracts – GBP138,760 for central government bodies and GBP213,477 for other contracting authorities; and
• contracts for social and certain other types of services – GBP663,540.

The value thresholds under the UCR 2016 are:

• works contracts – GBP5,336,937;
• supplies and most services contracts – GBP426,955; and
• contracts for social and certain other types of services – GBP884,720.

The value threshold for concession contracts under the CCR 2016 is GBP5,336,937.

The value thresholds under the DSPCR 2011 are:

• works contracts – GBP4,733,252; and
• supplies or services contracts – GBP378,660.

All of the above figures are inclusive of value added tax (VAT). Prior to 1 January 2022, the thresholds were expressed as "exclusive" of VAT, in line with the EU approach. However, following the UK’s exit from the EU, the treatment of VAT under the Regulations now reflects the standard GPA methodology.

Under the legislation, access to contract award procedures is guaranteed, and remedies for breaches of the legislation are available, to economic operators from:

• the UK;
• EU member states, but only in relation to procurements that are covered by the EU–UK Trade and Cooperation Agreement (TCA);
• a GPA state (other than an EU member state), but only in relation to procurements that are covered by the GPA; and
• other countries with which the UK has a bilateral agreement but only in relation to a procurement covered by such agreement.

While, in practice, most regulated contract award procedures in the UK are open to all economic operators, there is no obligation for a contracting authority to consider the application or the tender of an economic operator from a country that is not covered under one of the categories identified above (a third-country economic operator). In addition, if there is a breach of the legislation, a third-country economic operator would not be afforded protection (including access to remedies) under the legislation.

Where the legislation applies, contracting authorities must generally meet their contractual requirements for goods, works or services by means of an advertised competitive contract award process that is based on objective, relevant and proportionate criteria. Underlying the legislation are the key obligations to treat economic operators equally and without discrimination, and to act in a transparent and proportionate manner. These obligations are relevant even before the procurement process has commenced; for example, the carrying out of a preliminary market consultation or the design of the procurement process must be consistent with these obligations. Equally, even after the procurement process has concluded with the signing of a contract, there is a prohibition on making substantive modifications to contracts, so as not to breach the above obligations.

The steps that a contracting authority must take in carrying out an advertised competitive contract award process would depend on the procurement procedure used, but generally would include:

• advertising the contract by means of the publication of a contract notice on Find a Tender (FTS), describing the requirement and inviting expressions of interest (within the timescales set out in the notice);
• determining whether an economic operator that has expressed an interest has the necessary legal and financial standing and the relevant technical and professional abilities to perform the contract;
• inviting a shortlist of qualified economic operators, selected on the basis of objective and non-discriminatory rules and criteria, to submit tenders or carry out negotiations before submitting tenders (with potentially multiple rounds of negotiations and bidding taking place before the submission of final tenders);
• evaluating the tenders submitted on the basis of pre-disclosed objective award criteria that must be linked to the subject matter of the contract, so as to determine the most economically advantageous tender (MEAT);
• notifying the contract award decision to all economic operators that have submitted a tender (and also, in certain cases, to those who participated in earlier stages of the competition);
• observing the standstill period (or Alcatel period) of a minimum of ten clear calendar days (depending on the method used for the communication of the award decision), during which time the contract cannot be concluded;
• concluding the contract only after the expiry of the standstill period (if there is no legal challenge to the contract award decision before then); and
• advertising the contract award by means of publishing a contract award notice on FTS.

Finally, contracting authorities are subject to an express obligation not to design procurements with the intention of excluding economic operators from the scope of the legislation or of artificially narrowing competition.

Contract award procedures launched after the end of the transition period must be advertised on FTS using the online Find a Tender Service and on the national online portal Contracts Finder. National publication can only take place following publication of a contract notice on FTS. However, if the notice has not been published within 48 hours of being submitted to FTS, contracting authorities are entitled to publish at a national level. Contracting authorities must publish a notice on Contracts Finder within 24 hours of becoming entitled to do so.

The advertisement of a contract must be made using standard online forms. These generally require the publication of the following information:

• the identity, address and other relevant details of the contracting authority;
• details as to how to access the procurement documents;
• a description of the procurement and the contracting authority’s requirements, including the nature and quantity of works, supplies or services, the estimated value and the duration of the contract;
• the award criteria;
• the conditions for participation, including any legal, economic and financial, technical and professional requirements; and
• details as to the procedure, including the type of procedure, and the time limit the for receipt of tenders or requests to participate.

The standard form used for the advertisement of a PCR 2015-regulated contract on FTS may be found on the Find a Tender Service website.

The legislation expressly permits contracting authorities to carry out preliminary market consultations with a view to preparing the procurement and informing the market of their procurement plans and requirements. In carrying out such consultations, contracting authorities are permitted to seek or accept advice from independent experts or authorities, or from market participants. Such advice may be used in the planning and conduct of the procurement procedure, provided doing so does not have the effect of distorting competition and does not violate the principles of non-discrimination and transparency.

Where an economic operator has advised on or been involved in the preparation of the procurement process in some other way, the contracting authority is obliged to take appropriate measures to ensure that competition is not distorted as a result of the participation of that economic operator in the subsequent process. Such measures must include communicating to all other participants in the competition any relevant information exchanged with that economic operator in the context of preparing the procurement process and the fixing of adequate time limits for the receipt of tenders.

Where there are no means of ensuring the equal treatment of all economic operators, the economic operator who had been involved in the preparation of the process must be excluded from the procedure (but only after they have been given the opportunity to prove that its prior involvement is not capable of distorting competition).

The legislation provides for six procedures that may be used for the award of a contract.

Open Procedure

The contracting authority invites interested parties to submit tenders by a specified date. The process does not involve a separate selection stage, in that the tenders of all economic operators that meet the qualitative criteria for participation in the process must be evaluated and the contract awarded to the bidder with the most economically advantageous tender. Negotiations are not permitted under this procedure.

Restricted Procedure

The contracting authority considers applications from interested parties and invites a minimum of five qualified applicants (determined on the basis of objective and non-discriminatory rules and criteria) to submit tenders. The contract is awarded to the bidder who has submitted the most economically advantageous tender. Negotiations are not permitted under this procedure.

Competitive Procedure with Negotiation

The contracting authority considers applications from interested parties and invites a minimum of three qualified applicants (although two might be permissible in specific circumstances) to negotiate the contract with the contracting authority. Negotiations may involve successive bidding rounds, so as to reduce the number of tenders to be negotiated. Final tenders cannot be negotiated.

Competitive Dialogue

The contracting authority considers applications from interested parties and invites a minimum of three qualified applicants (although two might be permissible in specific circumstances) to conduct a dialogue with the contracting authority with a view to identifying the solution(s) capable of meeting its needs. A competitive dialogue may take place in successive stages to reduce the number of solutions to be discussed. There can be no substantive discussions following the submission of final tenders, although these may be clarified, specified and optimised at the request of the contracting authority. Limited (non-substantive) negotiations may also take place after the bidder with the most economically advantageous offer has been identified, with a view to finalising the terms of the contract.

Innovation Partnership

This aims to set up a partnership between a contracting authority and one or more economic operators for the development of an innovative product, service or works meeting the contracting authority's minimum requirements. At the conclusion of the innovation phase, the contracting authority can purchase the resulting products, services or works without the need for a new procurement process, provided that they correspond to the performance levels and maximum costs agreed between the contracting authority and the participants. The actual process for setting up an innovation partnership is based on the procedural rules that apply to the competitive procedure with negotiation.

Competitive Procedure without Prior Publication

In certain limited and narrowly defined circumstances, the legislation permits contracting authorities to award contracts without first having to advertise the requirement. Such cases include where there is extreme urgency (not attributable to the contracting authority) or where the requirement can only be met by a particular economic operator as a result of technical reasons or the existence of exclusive rights (see 5.2 Direct Contract Awards).

In line with all other aspects of a procurement process, the conduct of negotiations is subject to the obligation to treat economic operators equally and without discrimination. Among other things, this means that the contracting authority cannot disclose the confidential information of one bidder to the other bidders without the former’s agreement. Such agreement cannot take the form of a general waiver; consent may only be granted with reference to the intended disclosure of specific information.

Where the competitive procedure with negotiation is used, negotiations are not permitted once final tenders have been submitted. However, where the competitive dialogue procedure is used, final tenders may be clarified, specified and optimised at the request of the contracting authority. Limited (non-substantive) negotiations may also take place after the identification of the most economically advantageous tender, with a view to finalising the terms of the contract.

The legislation permits the conduct of an open or restricted procedure at the option of the contracting authority. The use of the other procedures outlined in 2.3 Tender Procedure for the Award of a Contract is only permissible where specific conditions are met.

The competitive procedure with negotiation and the competitive dialogue can be used only where one of the conditions below applies:

• the needs of the contracting authority cannot be met without the adaptation of readily available solutions;
• the contracting authority’s needs include design or innovative solutions;
• the contract cannot be awarded without prior negotiation because of specific circumstances related to its nature, complexity or financial and legal make-up, or because of risks attaching to them;
• the technical specifications cannot be established with sufficient precision by the contracting authority; or
• in response to an open or restricted procedure, only irregular or unacceptable tenders were submitted.

As noted in 2.3 Tender Procedure for the Award of a Contract, the innovation partnership, which also involves negotiations, may be used where there is a need for the development of new products, services or works, whilst the use of the negotiated procedure without prior publication is considered an exceptional procedure that can only be used in limited and narrowly construed circumstances (see 5.2 Direct Contract Awards).

The legislation generally requires contracting authorities to offer online unrestricted and full direct access to the procurement documents from the date of the publication of the contract notice on FTS (although certain exemptions apply).

The definition of the “procurement documents” in the legislation is broad and essentially captures all documents that are relevant to the carrying out of a procurement process, including the contract notice, the technical specifications, an invitation to tender or negotiate, any document that describes the requirements or the rules of the competition and the proposed conditions of the contract.

Although the wording of the legislation does not clarify this issue, it is arguable that this obligation applies only in relation to documents that are capable of publication at the start of the process. However, this interpretation has yet to be confirmed by the courts. In view of the uncertainty over this issue, it is not unusual for contracting authorities to issue some of the procurement documents as drafts at the start of the process and then reissue them in a final form at a later stage of the process.

The legislation sets certain minimum time limits, but these vary depending on which procedure is used and whether certain conditions are met.

Open Procedure

As a general rule, the minimum time limit for the receipt of tenders is 35 days from the date on which the contract notice was submitted to FTS for publication. However, this time limit may be shortened to 30 days where the contracting authority accepts the submission of tenders by electronic means, and to a minimum of 15 days in certain circumstances, including where the requirement is urgent.

Restricted Procedure and Competitive Procedure with Negotiation

The minimum time limit for the receipt of requests to participate in the process is generally 30 days from the date on which the contract notice was submitted to FTS for publication. This period may be reduced to a minimum of 15 days if the requirement is urgent. The minimum time limit for the receipt of tenders (or initial tenders in the case of the competitive procedure with negotiation) is 30 days from the date on which the invitation is sent. This limit may be shortened to between ten and 25 days in certain circumstances, including where the requirement is urgent.

Competitive Dialogue Procedure and Innovation Partnership

The minimum time limit for the receipt of requests to participate is 30 days from the date on which the contract notice is submitted to FTS for publication.

Regardless of any minimum time limits permitted by the legislation, contracting authorities have an obligation to take into account the complexity of the contract and the time required for drawing up tenders when fixing the time limits for the receipt of tenders and requests to participate.

In determining whether interested parties might be eligible for participation in a procurement process, contracting authorities may only take into account a candidate’s suitability to pursue a professional activity, its economic and financial standing, and its technical and professional ability.

The legislation sets out detailed rules as to how these criteria may be taken into consideration at the selection stage of a procurement process and the type of evidence that contracting authorities may ask applicants to provide to prove compliance with specific requirements in this regard. In this context, contracting authorities have an obligation to ensure that any selection requirements they impose are related and proportionate to the subject matter of the contract.

Separately, the legislation requires contracting authorities to consider whether applicants have committed certain offences that would normally require their exclusion from the competition (the mandatory exclusions). Contracting authorities may also exclude from the competition interested parties that find themselves in certain situations (the discretionary exclusions).

The exclusion period in relation to mandatory exclusions is five years from the date of the economic operator’s conviction, and three years from the date of the relevant event (a reference that case law has interpreted as the date when the wrongful conduct was established) for discretionary exclusions.

An economic operator that finds itself in one of the circumstances that require or permit disqualification may avoid this if it can demonstrate to the satisfaction of the contracting authority that it has taken appropriate "self-cleaning" measures.

When using a competitive procedure other than the open procedure, contracting authorities may restrict participation in a competition to only a small number of qualified applicants. The legislation requires the decision of which applicants should be shortlisted to be made on the basis of objective and non-discriminatory criteria or rules, which must be disclosed at the start of the process.

The legislation requires the shortlisting of a minimum of five applicants when using the restricted procedure and a minimum of three when using the competitive process with negotiations, the competitive dialogue and the innovation partnership.

However, where the number of applicants meeting the relevant requirements is below the minimum number set in the legislation, the contracting authority may continue with the procedure by inviting the applicants that meet the minimum conditions for participation, provided that there is a sufficient number of qualifying applicants to ensure genuine competition.

A contracting authority must award the contract to the bidder with the most economically advantageous tender, from the point of view of the contracting authority. The tender that is the most economically advantageous must be determined by reference to price or cost alone, or the best price-quality ratio, which must be assessed on the basis of criteria that are linked to the subject matter of the contract.

These may include qualitative, environmental or social aspects. The cost element may also take the form of a fixed price or cost, on the basis of which bidders then compete on quality criteria only.

The criteria must not have the effect of conferring an unrestricted freedom of choice on the contracting authority (which would be the case if, for example, the criteria are not clearly defined). The criteria must also ensure the possibility of effective competition, enabling an objective comparison of the relative merits of the tenders. They must also be accompanied by specifications that allow the information provided by the tenderers to be effectively verified in order to assess how well the tenders meet the award criteria.

The selection criteria must be disclosed at the start of the process, including the grounds for exclusion and the objective and non-discriminatory criteria or rules on the basis of which the contracting authority will determine the qualified applicants that will be invited to participate in the competition. Equally, the award criteria and their weightings must be disclosed in the procurement documents that are published at the start of the process.

Over and above the specific obligations in the legislation that relate to the disclosure of selection and award criteria, case law has clarified that a contracting authority must disclose all elements to be taken into account in the evaluation (which are likely to affect the preparation of tenders), including sub-criteria and their weightings.

In practice, and in order to limit the risk of non-compliance in this context, contracting authorities tend to disclose the full evaluation methodology at the start of the procurement process or, at the very least, well in advance of the submission of tenders, allowing a reasonable opportunity for bidders to take account of the methodology when preparing their submissions.

The legislation does not create an explicit obligation for contracting authorities to inform unsuccessful applicants of the decision to reject their application to participate in a competition and the reason for that decision in a timely manner.

Instead, the legislation provides that, where the contracting authority has not informed an applicant of its decision to reject its application and the reasons for that decision at an earlier stage in the process, it must do so before commencing the standstill period that must precede the award of the contract (see 3.4 Requirement for a "Standstill Period").

In practice, contracting authorities choose to inform unsuccessful applicants of their rejection and the reasons for it without undue delay, not least so as to limit the risk of a challenge against that decision at a later stage in the process.

Separately, the legislation provides that, where an unsuccessful applicant makes a request in writing for information about the reasons for the rejection of its request to participate in the competition, the contracting authority is required to provide this information as quickly as possible and, in any event, within 15 days of receiving the written request.

Bidders must be informed about the contract award decision as soon as possible after that decision has been made. In notifying bidders of that decision, the contracting authority must specify:

• the criteria for the award of the contract;
• the reasons for the decision, including the characteristics and relative advantages of the successful tender;
• the scores (if any) obtained by the tenderer receiving the notice and the successful tenderer;
• the name of the successful tenderer; and
• confirmation of when the standstill period (see 3.4 Requirement for a "Standstill Period") will expire.

The notice communicating the contract award decision is normally sent electronically, although facsimile and “other means” are also permissible in principle.

In certain circumstances, the contracting authority has an obligation to also notify the contract award decision to rejected applicants, and to bidders that might have been eliminated at earlier stages of the competition.

The legislation requires the contracting authority not to conclude the contract before the expiry of a standstill period following the notification of the contract award decision to bidders. The length of that period depends on the means of communication used to notify the contract award decision. Where all bidders have been notified of that decision electronically, the standstill period must be a minimum of ten clear calendar days.

Review applications are heard by the national courts of the United Kingdom – eg, the High Court in England and Wales. Decisions of the first-instance review body may be appealed to the relevant appellate court – in England and Wales, for example, this would be the Court of Appeal. In matters of public interest or matters involving a point of law of general importance, a further appeal may be permitted to the Supreme Court of the United Kingdom.

In principle, complaints may also be made directly to the European Commission in relation to alleged breaches that have occurred in procurements launched before the end of the transition period. The European Commission is not obliged to pursue the complaint but if it does, this may ultimately lead to an action against the UK government in the Court of Justice of the EU. Under the terms of the Withdrawal Agreement, the European Commission may take such action within four years following the end of the transition period.

Economic operators who have suffered loss or damage as a consequence of a breach of the Regulations may be awarded damages to compensate them for such loss. In order to recover damages, the relevant economic operator must establish that there has been a breach of the Regulations and that the breach has caused the economic operator to suffer loss or damage.

The Supreme Court decision in Nuclear Decommissioning Authority v Energy Solutions EU Ltd clarifies that damages will only be available if the relevant breach of the Regulations is "sufficiently serious". For these purposes, a breach will be sufficiently serious if it has an impact on the outcome of the procurement process. Separately, issuing a claim in the courts against the contracting authority’s award decision has the effect of automatically suspending the procurement process, thereby preventing the conclusion of the contract, provided the contracting authority has become aware that a claim has been issued against its award decision before the contract’s conclusion (see 4.3 Interim Measures).

Without prejudice to any other powers of the court, the legislation provides that, where the contract has not been concluded, the court may also order the setting aside of the unlawful decision or action, or order the contracting authority to amend any document.

Where the contract has been concluded, the court may award damages to an economic operator that has suffered loss or damage as a consequence of the breach. In addition, the court must make a declaration of “ineffectiveness” (unless there are general interest reasons for not doing so) in certain limited circumstances, including where:

• the contract was awarded without the prior publication of a contract notice, in circumstances where one was required; or
• there has been a breach of the automatic suspension or standstill obligations, depriving the claimant of the possibility to pursue pre-contractual remedies and this is combined with an infringement of the Regulations that has affected the claimant's chances of obtaining the contract.

Where a declaration of ineffectiveness is granted, the contract is prospectively ineffective as from the time when the declaration is made, so that any outstanding contractual obligations must not be performed. In such circumstances, the court must also impose a civil financial penalty on the contracting authority of an amount that it considers to be "effective, proportionate and dissuasive".

Declarations of ineffectiveness are rare, with only two examples of such a declaration being granted in the UK at the time of writing, the most recent being by the English Court of Appeal in the case of Faraday Development Ltd v West Berkshire Council [2018] EWCA Civ 2532.

As noted in 4.2 Remedies Available for Breach of Procurement Legislation, issuing a claim against a contracting authority’s award decision has the effect of automatically suspending the procurement process and preventing the conclusion of the contract, provided that the contracting authority has become aware that the claim has been issued before the contract’s conclusion.

In response, the contracting authority can apply to the court for an order to "lift" the automatic suspension, so that it may conclude the contract despite the outstanding claim. When considering whether to lift an automatic suspension, the court will consider whether the claim raises a serious issue to be tried, whether damages would be an adequate remedy for the claimant if the suspension remained in place but the claim succeeded at trial (if not, would damages be an adequate remedy for the contracting authority), and whether the balance of convenience favours maintaining or lifting the suspension.

In essence, the court will consider whether it is just in all the circumstances to confine a claimant to a remedy of damages and, if there is any doubt as to the adequacy of damages for either party, it will decide where the balance of convenience lies in the circumstances. As a condition of maintaining the suspension, the court will normally require the claimant to give a cross-undertaking in damages (essentially a promise to pay the contracting authority damages for any loss it may suffer as a result of the suspension being maintained, if the claim is unsuccessful).

Separately, an economic operator may seek a court order to suspend the procurement process in relation to which it alleges that there has been a breach, or the implementation of any decision or action taken by the contracting authority in the course of such process. In determining whether or not to grant such interim order, the court will consider the issues set out in the previous paragraph.

A breach of the legislation is actionable by any economic operator that is owed a duty under the legislation and, in consequence of the alleged breach, suffers, or risks suffering, loss or damage. As noted elsewhere in this chapter, a contracting authority owes a duty of compliance with the legislation to economic operators from the UK, an EU member state, a GPA state (other than an EU member state), or a country with which the UK has a bilateral agreement, but in relation to the latter three only to the extent that the procurement in question is covered by the TCA, the GPA or the bilateral agreement, respectively.

The time limits will depend on the type of remedy being sought. The Regulations require a claim seeking the remedy of “ineffectiveness” to be made within six months starting from the day following the date of the conclusion of the contact. Where the contracting authority has published a contract award notice on FTS, or has informed the relevant economic operator of the conclusion of the contract and provided a summary of the reasons leading to the award of that contract, the period for bringing a claim is shortened to 30 days from the date of publication of the contract award notice, or the date on which notice of the conclusion of the contract (together with a statement of reasons) was provided to the relevant economic operator.

Claims seeking a remedy other than “ineffectiveness” must be brought within 30 days, beginning with the date on which the claimant first knew or ought to have known that grounds for starting the proceedings had arisen. The court has the power to extend this period to up to three months where it considers that there is a good reason for doing so.

The time taken for the proceedings to come to a full hearing will vary significantly depending on the circumstances, including the complexity of the case. It would not be unusual for a claim to take between nine and 12 months to reach full hearing. In urgent cases, the court may order the claim to be expedited, in which case the period from issuing a claim to judgment may be around three months.

The number of procurement law cases with reported UK court judgments is low compared to most EU jurisdictions (very broadly, around ten reported cases per year). It is often said that the comparatively low number of cases does not reveal the true level of challenges to UK contract award procedures, with a larger number of claims being settled out of court before judgment.

For a case that includes a claim for damages over GBP200,000, the cost of issuing proceedings is GBP10,000. An additional fee of GBP569 will be payable if the claim includes a claim for non-monetary relief, such as a declaration of ineffectiveness or an order setting aside a decision to award a contract.

Additional fees will be payable at various stages of the claim, such as if an application is made for an interim order for specific disclosure or if the matter proceeds to a hearing. Total fees, including legal fees, will vary depending on the nature and complexity of the issues in dispute. Fees ranging from tens to hundreds of thousands of pounds are not uncommon.

To the extent that a claimant is successful, it may be able to recover a proportion of its fees from the contracting authority. Typically, a successful claimant would hope to recover in the region of 65% of its total costs from the defendant. If the claimant is unsuccessful, it would usually expect to pay a similar proportion of the defendant’s total costs.

The Regulations (other than the DSPCR 2011) incorporate provisions that regulate the modification of contracts following their award. These prohibit substantial modifications. In brief, a modification will be deemed substantial when it:

• renders a contract materially different in character from the one initially concluded;
• introduces conditions that, had they been part of the initial procurement procedure, would have:
1. allowed for the admission of other candidates than those initially selected;
2. allowed for the acceptance of an offer other than that originally accepted; or
3. attracted additional participants to the procurement procedure;
• changes the economic balance of the contract in favour of the contractor in a manner that was not provided for in the initial contract;
• extends the scope of the contract considerably; or
• involves the replacement of the original contractor (unless "safe harbour" provisions apply – see below).

Safe Harbour Provisions

At the same time, the Regulations (other than the DSPCR 2011) incorporate certain provisions that specify the conditions that, if met, mean a modification would not be deemed to constitute a substantive modification and, as such, would be permissible (generally referred to as the "safe harbour" provisions).

These rules differ in certain respects, depending on whether the contract is subject to the PCR 2015 or the UCR 2016, or whether a concession contract is awarded by a contracting authority in the exercise of an activity that is not regulated under the UCR 2016. Briefly, modifications would not be deemed to be substantive where they:

• have already been provided for in the original procurement documents in clear, precise and unequivocal review clauses, provided these do not alter the overall nature of the contract;
• relate to the provision of additional requirements by the original contractor that are outside the scope of the original procurement but where a change of contractor is not possible for economic or technical reasons and would cause significant inconvenience or substantial duplication of costs for the contracting entity, and the value of the modification does not exceed 50% of the value of the original contract (this value rule does not apply to utility procurements);
• have become necessary as a result of circumstances that a diligent contracting authority could not foresee, and the modification does not alter the overall nature of the contract and the value of the modification does not exceed 50% of the value of the original contract (this value rule does not apply to utility procurements);
• are limited to the replacement of the original contractor in certain circumstances, including where this is the result of corporate restructuring, and the new contractor meets the original selection criteria and this does not entail other substantial modifications and is not aimed at circumventing the rules;
• are not "substantial" within the meaning of the legislation (as described above); and
• are of a value that is below:
1. the relevant value threshold for the application of the rules; and
2. 10% (for services or supplies) or 15% (for works) of the value of the original contract, and provided there is no change to the overall nature of the contract. The value must be calculated cumulatively if there are successive modifications.

The second and third safe harbour provisions also require the publication of a “modification of contract” notice on FTS.

The legislation permits a contracting authority to award a contract without having to advertise the requirement on FTS and conduct a competitive tender process in certain limited circumstances, including where:

• no tenders, no suitable tenders, no requests to participate or no suitable requests to participate have been submitted in response to an open or restricted procedure, provided that, among other things, the initial conditions of the contract are not substantially altered;
• the requirement can be met only by a particular economic operator as a result of technical reasons or the existence of exclusive rights;
• it is strictly necessary to make the direct award for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, and the time limits for the open, restricted or competitive procedure with negotiation cannot be complied with;
• insofar as is strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, it is not possible to comply with the time limits for the open or restricted procedures or the competitive procedures with negotiation; and
• additional supplies are necessary and a change of supplier would oblige the contracting authority to acquire supplies with different technical characteristics that would result in incompatibility or disproportionate technical difficulties in operation and maintenance, and where certain other conditions are met.

In Adferiad Recovery Ltd v Aneurin Bevan University Health Board [2021] EWHC 3049 (TCC), the High Court granted the defendant’s application for summary judgment in relation to a challenge brought by an unsuccessful bidder against a below-threshold contract award decision.

In granting the summary judgment, the court held that the claimant had no real prospect of success in its claim that the defendant had breached procurement law obligations, given the below-threshold nature of the contract.

As the contract award related to a below-threshold contract the defendant did not breach any obligations, nor did it owe any duty to the claimant, under the PCR 2015. Even though the claimant contended that the actual value of the procurement was GBP488,000 (and not GBP122,000 as stated in the procurement documents), the main subject matter of the procurement fell within the scope of social and other specific services for which a higher threshold of GBP663,540 applied (as of the date of the procurement).

The claim also failed on the basis that the court did not find there to be a breach of a retained EU law obligation by the defendant. In reaching this conclusion, the court held that the EU law obligations that apply to certain below-threshold contracts of cross-border interest no longer applied to such contracts after the UK’s withdrawal from the EU (although it should be noted that these obligations could still apply to certain contracts pursuant to the Northern Ireland Protocol). The court also ruled out the argument that these EU law obligations would apply where below-threshold contracts are of cross-border interest within the UK internal market.

Finally, the claimant was unsuccessful in arguing that the tender documentation gave rise to an implied contract as, among other issues, the documentation was considered not to contain any intention on the part of the defendant to enter into voluntary contractual obligations.

In Access for Living v London Borough of Lewisham [2021] EWHC 3498 (TCC), the High Court considered whether the claimant’s procurement challenge against the defendant had been brought within the relevant limitation period under the PCR 2015. The claimant (the incumbent provider) had been unsuccessful in a “call off” competition under a framework agreement for the provision of adult learning supported living services.

The defendant had agreed to extend the standstill period but, ultimately, the claimant issued a claim 32 days after being notified of the award decision and the reasons as to why it was unsuccessful. The defendant subsequently applied to strike out this claim and sought, in the alternative, a summary judgment on the basis that the claim was issued after the expiry of the limitation period, despite having been issued before the end of the extended standstill period.

Although the court has the discretion to extend the limitation period for up to three months where there is good reason to do so, it did not consider that this was the case here, and that there was no good reason as to why the claimant could not have commenced proceedings earlier. The fact that the extension sought was short or that the delay was caused as a result of confusion over the extension of the standstill period and a standstill for the purposes of limitation was insufficient. Accordingly, the court issued a summary judgment in favour of the defendant. The case is consistent with earlier court judgments and demonstrates the importance of issuing a claim within the “standard” 30-day limitation period, as the courts would only consider that there is good reason to extend that period in very limited circumstances.

As explored in the Introduction of this Guide, the Cabinet Office is in the process of overseeing the UK government’s proposed procurement law reforms in the wake of the UK’s withdrawal from the EU.

Among other things, the proposed reforms will seek to accelerate and simplify procurement processes in the UK. Whilst it is expected that these reforms will lead to UK procurement law deviating in many respects from the EU procurement directives, a degree of overlap will remain in light of the UK’s public procurement obligations pursuant to international treaty obligations such as the GPA and the TCA.

The Cabinet Office’s response to the Green Paper consultation (published on 6 December 2021) envisages that draft legislation to give effect to the procurement reform proposals will be brought forward during 2022, with the new regime coming into force in 2023. The Cabinet Office has also confirmed that it intends to provide a six-month lead-in period, during which contracting authorities and suppliers will have the opportunity to participate in a number of initiatives aimed at ensuring familiarisation with, and the effective introduction of, the new procurement legislation.