When can unsuccessful bidders challenge a public sector tender decision?

You could have substantial grounds for challenging the decision if you disagree with your score, the reasons you were rejected, or the procuring authority’s reasoning behind its award decision.

Not only do public sector organisations need to award contracts for goods, services or works (depending on the value) in line with procurement legislation, they must also do this in a fair, transparent, proportionate and non-discriminatory way.

In this context, ‘public sector’ is broader than you might think. As well as central government departments, local authorities, NHS trusts, LA-maintained schools, police and fire authorities, it can also include academies, registered social housing providers and other bodies governed by public law.

As an unsuccessful tenderer, the awarding authority could, depending on the procurement procedure used, reject your tender at the pre-evaluation stage as part of the dialogue process, or once they have evaluated the tender.

At which stage in the tender process were you rejected?

The rejection notification you receive should detail the stage at which you were ruled out of the process.

If this is before evaluating the tender, you can ask the awarding authority for the reasons it rejected your bid, which must be provided by them within 15 days of your request.

Where the rejection occurred after evaluation, and the advertised contract value exceeds the relevant threshold set by the procurement regulations, the awarding authority is legally obliged to give you certain specifics in its notification letter. These include your score, the name of the successful tenderer and their score, as well as the reasons for its decision, including the characteristics and relative advantages of the winning bid.

The standstill period

For contracts valued above the relevant thresholds, the awarding authority must, once it has issued its tender award notices, enter into what is known as a standstill period. During this time, it is not allowed to start the contract.

This respite provides all bidders with an opportunity to consider their outcome, their scores, and whether they have grounds to challenge the decisions made.

Where tender award notifications are provided by email or fax, the period should be for at least 10 days from the date of a compliant award decision notice being issued to all bidders. Where notifications are sent by alternative means, it must be at least 15 days.

The notification should also be explicit on when the standstill period ends.

Challenging a tender rejection through the courts

Depending on individual circumstances, a court has various options for recompensing you if your challenge is successful. These include:

• Making an order setting aside the decision made by the awarding authority
• Awarding damages if you can show that you have suffered losses as a result of the breach
• Declaring the prospective contract ineffective where the relevant grounds are met

Don’t delay your challenge

You will have to be quick as the time limits for issuing legal proceedings are very tight. Unsuccessful bidders seeking a formal challenge have just 30 days from the date of finding out the results or ought reasonably to have known that there were grounds for challenge.

Depending on the circumstances of a case, this could mean issuing proceedings before any award decisions have been made.

Where a ‘declaration of ineffectiveness’ is being sought, depending on the circumstances, it could be possible to have up to six months from the date of the contract in which to issue legal proceedings.

The six-month limitation period does not apply in every case where a declaration of ineffectiveness is sought, and in some cases, legal proceedings would need to be issued within 30 days beginning with the date after the publication of the contract award notice, or the date of being informed of the outcome and the procuring authority’s reasoning.

If you have been told that your bid is unsuccessful, and you disagree with the reasons or the score you received, we recommend seeking legal advice as soon as possible.

Tips for contesting a public sector tender

Before submitting a tender bid familiarise yourself with the requirements and process so there are no surprises as you progress. It could be that aspects are not clear and a consultation with us at an early stage can help improve your evaluation and preparation.

There is usually a stage where you can clarify points with those running the tender process. Take advantage of this so that you can use feedback to improve your bid.

Often contracts are provided as part of the tender package with guidance around what can or cannot be changed and how much of the scoring related to the extent of your acceptance or changes to the contract terms. We can review the contract at this stage so you can make informed choices around “compliability” and related liability risks to your organisation.

If you are “teaming up” or otherwise collaborating with a sub-contractor or joint provider to make a tender bid then a “teaming agreement” with the other party is useful at an early stage to cover the arrangement around the collaboration for the tender bid. Typical points to cover (amongst others) are:

• Who is the “prime” bidder.
• Who gets to deal with the tender organisers and underlying customer during the tender process and during the negotiations for the contract if the bid is successful.
• Who takes responsibility and liability for the tender submission.
• Who owns the IP in the tender submission and other output of the collaboration to prepare and submit the tender bid.
• Whether the collaboration for the bid is chargeable or each party bears its own costs for the tender submission work.
• If the bid is successful whether the prime bidder has the option of selecting a replacement/additional collaborator for the project.