Tendering changes 'will fuel disputes'

Published on Saturday 20 February 2010 14:04

MORE firms are expected to challenge the public procurement process under new rules being introduced to the tendering regime, according to a Scots lawyer.

The new rules enhance the remedies potentially available to tenderers, greatly increasing the risks facing public-sector buyers who make mistakes.

Michael Dean, partner in the EU and Competition team at Maclay Murray & Spens, said: "A greater number of UK procurement processes have been challenged in the past couple of years than all previous years put together.

"The new rules give bidders even more encouragement to challenge tender processes if they believe a contract has been awarded improperly.

"Contracts awarded in breach of the rules can attract fines and be overturned up to six months after they have been concluded, forcing re-tender."

Contracts cannot be awarded if court proceedings start within the "standstill" period, Dean added, potentially leading to long delays on major projects.

He said: "While the increased risk of ineffectiveness of already concluded contracts is largely in line with some recent case law developments, the new rules represent a definite shift to risk of non-compliant procedures being shared by successful bidders."

The main message, said Dean, was that public sector buyers had to comply with the rules when awarding contracts.

He said: "Failing that, the ramifications will be very significant, not only for purchasers – such as local authorities – but also for contractors to the public sector and financial institutions providing funding to public projects."

Stakeholders must consider how they will prepare for the new rules, said Dean, so that they can mitigate the risks and capitalise on the opportunities.