It makes the particular observation that, contrary to many ill-advised commentators, access to review procedures can have a beneficial impact on the over-all procurement regime. On Guam, this has been shown demonstrably. Prior to changes in the law to allow de novo review of agency procurement decisions, little was achieved to obtain regularity and effectiveness in local procurement decision-making. However, once the Public Auditor was given the administrative review authority, the lid has been lifted, and GovGuam has been forced to significantly clean up or otherwise address its procurement shortcomings.
It should be remembered that, for the most part, there is no timely policing of procurement irregularities. There may be after-the-fact audits or other investigations that reveal past misdeeds, but that has not proven effective in changing anything.
Most procurement regimes, by default, rely to one extent or the other on the players in the system, and occasionally parties outside the procurement process, to police the process. (The article below suggests the UK system allows a broader class of protestor that does the US system generally.) They must be encouraged as far as possible to do so. Discouraging such criticism does nothing to enhance the efficacy of good governance or effective procurement.
Public procurement challenges: the rising use of judicial review by Rupert Choat
The EU rules which apply in the UK are some of the most detailed and strict of any of the international public procurement regimes. While much is written about the UK’s public procurement regulations, little is said about how the courts have enlarged the scope for challenges. Recognition has, though, rightly been given to the excellent, speedy, service that the courts provide in dealing with challenges.
The regulations dictate who may be challenged (essentially public and quasi-public bodies, such as utilities) and by whom. They also dictate when and how challenges may be brought, on what grounds and what relief is available.
However, the courts have developed grounds for challenges beyond those stated in the regulations. For instance, even where an authority treats bidders equally and transparently its assessments may still be challenged where it commits a “manifest error”. This allows challenges where, for example, an authority fails to evaluate a bid correctly against the relevant criteria.
Over the last year or so there are signs that the courts will permit challenges even further – beyond what the regulations expressly contemplate – in ways that had previously been thought impossible. The courts’ powers of judicial review of many public and quasi-public bodies’ decisions are being brought to bear. The use of these powers was seen last year when the courts quashed the government’s decision to halt various Building Schools for the Future projects (although the government later essentially repeated its decision by withholding funding). This was a temporary victory for authorities which are more used to judicial review being used against them.
Judicial review widens the scope for challenging contracting authorities, upon grounds such as irrationality. While authorities have a discretion as to the criteria they apply to bids (so long as the criteria and any sub-criteria and weightings are disclosed to all bidders), judicial review allows attacks upon the criteria themselves, in ways that the regulations do not envisage.
The applicant need not be an aggrieved bidder and it does not take much for them to show the necessary “standing”; for instance, a subcontractor of a bidder that loses a public tender may have the right to challenge the process (although it may be a rare case where they would in fact to do so). A much wider class of complainant is empowered than aggrieved actual or potential bidders, who are the only complainants that the regulations recognise.
Despite all this, judicial review does not increase an aggrieved bidder’s prospect of obtaining damages for wasted bid costs or lost profits on a contract that would or might have been awarded to it.
It would be wrong to suggest that the courts have only made challenges easier. For instance, the recent change to the regulations requiring authorities automatically to suspend a contract award, if it is challenged by litigation in the 10-day standstill period, has put an onus on authorities to seek court-clearance of the suspension. The courts have been forthcoming with lifting suspensions.
As for judicial review the Supreme Court’s latest addition in November questioned the lack of a coherent basis for court intervention. We may yet see a retreat.
The bases for challenging publicly procured contracts are in a state of flux.
This article underscores the fact that there is no one procurement law. There may be universal principles, and there are certainly consensus principles in most modern states, but the details of procurement procedure in each jurisdiction must be appreciated. Results will vary.
I consider this variety to be a good thing. It allows different states to experiment with alternatives and, so long as the results are reported, provide education for all of us. We have a lot to learn.
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