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Wednesday, February 24, 2016

Just stand still whilst we try to sort this out

On Guam, there are time limits within which an appeal of a protest must be brought, both administratively and for judicial review. Separately, remedies available to a successful protester are significantly different depending on whether the protest is brought before the award or after the award.

This has led to a bit of hard ball, with agencies denying a protest and immediately awarding a contract, notwithstanding that protesters have about two weeks to appeal the award decision from the date of that decision. That nasty business has been held up in recent times as the Public Auditor has ruled on administrative appeal that the award must not be made until a protester's time to appeal has run. There are also moves afoot to try to make that a statutory requirement. (I have alluded to this issue before.)

But, things have already been codified in in the UK and other European jurisdictions which close the door on that treacherous behavior/behaviour, as seen in the following articles. 

The usual caveat here: I cut, rearrange, paraphrase, edit, omit (quite often very important matter), and pretty much often make a mash of articles mentioned, so to be safe and fully informed, read the whole bits at the links.

Procurement Law Jargon Buster - "Standstill Periods" and "Alcatel Letters"
The Public Contracts Regulations 2006 (the ”Regulations”) require public contracting authorities to apply a compulsory waiting period between their decision to award a contract to which the Regulations apply and the date on which the contract is signed. This is commonly called the Standstill Period. The regulations themselves apply to contracts for the supply of goods works and services, where contract values are above specified thresholds.

This requirement follows a judgement of the European Court of Justice in the Alcatel case when the ECJ decided that contracting authorities should allow a period of time to elapse between decision and signing in order to give unsuccessful bidders a chance to seek remedies if they were dissatisfied with the procurement process. To achieve this, a contracting authority must inform bidders of its decision to award the contract, commonly called Alcatel Letters.

The period kicks in from the date the authority decides to award the contract. Usually this will come towards the end of an often lengthy procurement process where bidders will have been shortlisted and finally whittled down to one, for example through a process called “competitive dialogue”. At that point, when the authority makes its selection, the Alcatel Letter is issued and the standstill period should then commence. At the end of that period the contract is signed. This is designed to give unsuccessful bidders an opportunity to challenge the award if they believe there has been a breach of the procurement rules.

The decision notice should include the criteria for the contract award and the reasons for the decision including the characteristics and relative advantages of the winning tender, the scores of the winning bid and of the party receiving the notice. The notice also must name the winning bidder and provide details of the standstill period. On receipt of the notice, unsuccessful bidders may request an “accelerated debrief”.

If the contract is awarded inside the standstill period or an Alcatel letter is not issued, under the new rules, it may be possible to get the contract declared “ineffective” with potentially serious consequences for the procuring authority.
Unsuccessful Tenderers’ Entitlement to Information: Irish Court Clarifies Position
In a significant judgment delivered on 15 February 2016, the High Court has given guidance on the level of detail that must be included in standstill letters to disappointed tenderers in a procurement process. The judgment also provides clarity as to the level of further engagement that is required subsequent to the initial standstill letter, as well as the point at which the challenge period begins to run in circumstances where further reasons are provided.

This case concerned an above-threshold competition run by Kildare County Council (“KCC”) seeking engineering consultancy services in relation to the design and delivery of the new Athy southern distributor road.1 RPS Consulting Engineers Ltd (“RPS”) was unsuccessful, despite having tendered a price that was significantly lower than that of the successful tenderer. RPS engaged in correspondence with KCC in which it alleged that it had not been given sufficient reasons in the standstill letter as to why it had not been selected. KCC responded on two occasions to the effect that it had provided all of the information to which RPS was entitled, at which point RPS instituted proceedings against KCC. The proceedings were commenced after the standstill period and after the contract had already been signed, and the Court was asked only to determine whether sufficient reasons had been given to RPS.

The Court held that KCC had breached its obligation to provide sufficient reasons for its decision, and ordered that KCC provide such reasons within 15 days of the judgment. The Court held that the reasons given by KCC had been inadequate for a number of reasons.

It is not enough to state that the successful tenderer’s response was superior to that of the addressee; rather the letter must contain reference to specific matters, respects, examples or facts which explain why the decision about relative advantage was made (eg matters which the winner’s response included, or the applicant’s response lacked, or vice versa), so that the bidder is aware of the matters of fact and law on the basis of which the decision to reject its tender was reached. In this case, the narrative in the letters to the disappointed bidders consisted only of a repetition of the criteria, a repetition of the score (but phrased in terms of “good”, “very good” etc rather than numerically) and a handful of additional words to indicate comparative quality as between the unsuccessful and successful tenderers. This was held not to be sufficiently precise as to the matters of fact and law that were relied upon by KCC in making its decision. The provision of scores alone will not suffice for qualitatively assessed criteria but may suffice in respect of price.

The reasons provided to a disappointed tenderer must be bespoke to the tenderer in question; it is in breach of the obligation to give reasons to copy and paste generic reasons that could apply to any tenderer. The Court was severely critical of the fact that formulaic reasons were included in all of the letters to unsuccessful tenderers, with the only variations being whether the addressee’s bid was “good”, “very good” etc. Reasons provided must fully explain why the marks in question were awarded; if a person unfamiliar with the process cannot readily understand from the reasons why a particular score was awarded then the reasons will be insufficient.

Contracting authorities must respond positively to requests for further reasons, after the initial standstill letter is sent. A refusal to engage was described as a “fundamental flaw”. The Court concluded that there are two separate elements to the obligation to give reasons under EU law, namely:

• a contracting authority must automatically give a summary of the reasons for its decision with the standstill letter (this is expressly transposed in the Irish Remedies Regulations); and
• the contracting authority must provide further information, within 15 days, upon receipt of a written request (under Article 41 of Directive 2004/18)
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To round out a short overview, also have a look at The five biggest standstill letter mistakes.


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